February 20th 2018. By Alex Smith.

Part exchange your boat

If you want a quick, reliable and safe boat sale, part exchange could well be the way forward.

When the time comes to sell your boat, things don’t necessarily happen overnight. In fact, it’s perfectly common for a year to pass before a boat sale reaches a successful conclusion – and that’s time during which you continue to incur costs related to moorings, storage, insurance, tax, maintenance and depreciation. The longer the saga goes on, the lower your price tends to drop and that’s an issue that can become even more acute if you’re selling your boat because you’ve found a new one that needs financing. In such circumstances, a great many sellers refuse to let the opportunity pass them by and end up owning two boats, doubling their overheads and their stress at a stroke.

Now you could of course simplify the whole process by using a broker to sell the boat on your behalf. As you might expect, professional experience of how to sell in a given marketplace often enables a broker to make much better progress than a private seller but, even then, neither the price nor the time frame can be guaranteed – and that’s exactly where part exchange comes in…

Six key benefits of part-exchange

  1. You won’t find yourself stuck as the owner (and bill payer) of two boats at the same time.
  2. With no gap between sale and purchase, you will never be without a boat.
  3. You incur no brokerage fees on the sale of your boat.
  4. You spend far less time on advertising, correspondence and viewings.
  5. You reduce your ongoing maintenance and marina costs.
  6. By confirming a date and a price, you eradicate the stress and uncertainty.

What is part exchange all about?

Part exchange is a process whereby you use your existing boat as part payment for a new one. If you identify a vessel you want to buy from a dealer who offers the service, they will inspect your boat and, assuming it meets their criteria, they will make an offer. You are often required to leave a refundable deposit at this stage to help get the ball rolling, but once that’s done, a survey can be carried out at the yard’s expense, bringing about one of three outcomes: (1) if critical issues are raised, the offer may be withdrawn and your deposit refunded; (2) if remedial issues are identified, the part-exchange offer may be adjusted; and (3) if the survey is satisfactory, the price will be confirmed, enabling a contract to be drawn up. Your boat then becomes part of the payment for the new boat at the agreed (or adjusted) price. But just be aware that it doesn’t always have to involve an upgrade. On the contrary, if you want to downsize to a smaller boat, there are various companies that also offer part exchange in reverse – whereby you part-exchange your existing boat for a less valuable one and the dealer pays you the difference.

part exchange your boat

Tired of your current boat and looking to change? Part exchange could be a less stressful route to your new dream boat.

Do I qualify for part exchange?

The whole part exchange process is of course dependent on you having identified a boat you are interested in buying – and often, part exchange is only offered on new boats, so if your budget dictates that you can only make progress up the boating ladder by working with the used boat market, you may have to change your boat dealer (and maybe your boat brand) to achieve what you want.

However, plenty of large marine companies with well established brokerage businesses are able to take boats in part exchange that have no relation to the brands they tend to stock and service. And equally, while most part-exchange deals involve the purchase of a new boat, many dealers are content to offer the service against trade-in models – not least because keeping such boats in stock for extended periods is not appealing to them. In all cases, however, you should recognise that the part exchange process is not your excuse to relax and put your feet up. If you want a good deal, then as with private and brokerage sales, it pays to do everything you can to present your boat in the very best light – so don’t let a dealer view it until it is clean, serviceable and clutter-free, with all relevant documentation in order.

How much will I get for my boat?

While presenting your boat in the right way always has a positive impact, the part exchange value of your boat is ultimately calculated on the basis of its age and condition relative to the market value for similar vessels. The dealer will always need to include sufficient margin to make a worthwhile profit, but with two boats involved in the deal, that can take a more fluid form. You may receive what appears to be a generous offer on your old boat but that will inevitably minimise the prospect of extras and discounts on your new one. The key figure then is the difference between the agreed value of your trade-in and that of the new purchase – or in other words, the amount of finance you need to add. Just be aware that, whatever the part-exchange figure might be, no offer can be seen as confirmed until it is put down in writing and signed by both parties.

What are the pitfalls?

Naturally, not every part exchange provider will consider any boat. Many will require a specific brand; others will only offer the service against the purchase of new boats or specific models of boat; and others have quite stringent criteria about boats they will take on. That can involve a maximum age, a particular size bracket and a minimum value, as well as a specific checklist of documentation to help prove ownership and regulatory compliance. You will obviously tend to get a lower price than you might expect through brokerage, but once a contract is in place, there are still plenty of boat dealers who are flexible enough to list your trade-in boat on their brokerage site. That at least raises the possibility that your boat might sell at a higher price before your new one is delivered.

Is it really worth it?

While it has its detractors, part exchange is commendably straightforward and confidence inspiring. True, you will never get the full market value for your boat, but you will eradicate the danger, firm up the time frame and remove the stress, enabling you to move onto your next boat without doubt or delay. For many, that’s more than enough to seal the deal.

Alex Smith is an ex-Naval officer, with extensive experience as a marine journalist, boat tester and magazine editor. Having raced as a Pilot in the National Thundercat Series and as a Navigator in the inaugural Red Sea RIB Rally, he has now settled in the West Country, where he lives and works as a specialist marine writer and photographer from his narrowboat in Bath.