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October 12th 2021. By Rupert Holmes.

Boat pricing: how to fix an asking price

Boat pricing requires an analytical approach that’s not swayed by emotional attachment.

Pricing a boat is one of the most difficult aspects to judge when the time comes to sell, yet it’s one of the most critical elements in achieving a sale in a sensible timescale. It’s worth remembering that many more owners over price their vessels – some by a considerable margin – than under price.

In the UK and main European boating markets the average time to achieve a sale of all but the smallest sailing and motor yachts is more than a year. Many vessels stick on the market for several years, often deteriorating while they wait for a buyer, before selling for a fraction of the initial asking price.

comparing prices of similar boats on yachtworld

Looking at asking prices of other boats won’t tell you the actual sale prices achieved.

There are number of understandable reasons why an owner may over estimate the value of their craft. For a start, any boat that has been well looked after will have had a lot of money spent on maintenance and upgrades. This will, of course, help to retain value in the vessel, but as with looking after a car carefully, it will not eliminate the inevitability of depreciation. The bulk of the cost of expenditure on items as diverse as electronics, engines and expensive repaints has to be written off over a relatively small number of years.

For a long time yachts appeared to be immune to depreciation – at least in cash terms – which is another factor that may lead some experienced and long-standing owners to over value their craft. For many decades depreciation in real terms was masked by high inflation, such that boats would maintain their cash price, but this is no longer the case.
Pride can also be a factor. New car sales staff understand this so, instead of giving a discount off the new vehicle, they have historically tended to offer an apparently generously inflated trade-in price on your old one.
Finally, as an owner it’s easy to fail to notice aspects of your boat that will cause a buyer to factor in the cost of improvements replacements. Examples include dated electronics, old upholstery and ageing sails, even if these items are still functional.

yachts in a marina in monaco

Remember yachts can deteriorate quickly while on the market – the average time taken to achieve a sale is around one year and many stay on the market for much longer. Photo: Anthony Delanoix

Speed of sale vs on going costs

When selling a boat you’re likely to be in one of two situations. Some owners will be intending to buy another, perhaps larger or newer, craft and will continue using their existing vessel until it’s sold. Any on-going costs in terms of maintenance, marina fees, storage ashore, further depreciation and the cost of the capital tied up in the yacht can therefore be set against their continued use of the boat. In this sense, for them it’s “situation normal” and they can set a slightly optimistic price in the knowledge that they won’t lose out through doing so, providing they don’t commit to buying the next boat before selling the existing one.

However, anyone who’s no longer able to use their boat is in a very different position. The longer such a vessel remains on the market, the more those on-going costs stack up. In this situation they are, in effect, costs of the sale that reduce the size of the pot you eventually realise when the boat is sold.

In addition, yachts that are not being used tend to receive less maintenance than is ideal. This applies both to looking after systems such as engines, generators and electronics, as well as to more mundane matters like general cleaning. This is understandable for two reasons. Firstly it can be galling have to continue spending on a boat if you’re not using it. In addition, organising maintenance involves hassle and time, so if you are not close to the boat it’s hardly surprising that less of it is carried out.

Additionally, moorings can cost anything from £1,500 to well over £10,000 per year, depending on location and size of the boat, it’s possible to lose a significant amount of money while waiting for your yacht to sell. Therefore, if you realistically won’t be using the boat before it’s sold, it is imperative to opt for a very competitive asking price. Anything else risks being a false economy that leads to a slippery path that will eventually see your boat languishing on the market for years and eventually selling for a deep discount on the original asking price.

Location

It’s widely recognised that location is an important aspect to the housing market. Even though yachts are portable, location is also important in the marine market for two reasons. Often potential buyers will be hoping to see a number of boats at the same time on a visit to a particular port. If yours is difficult to reach it will be the first one gets dropped off the short list. A high-value or unusual boat in a far-flung place is therefore less likely to attract interest than a similar one in a popular and busy location.

A similar principle applies to where the boat is moored within a particular harbour. A half-hour round trip in a dinghy will not be appealing to potential buyers, especially in inclement weather. In both cases two solutions are possible – moving the boat to a better location, or lowering the asking price to boost interest. It’s worth noting that a less than ideal location is not so much of a problem with lower value craft that are likely to sell to a reasonably local buyer.

Yachts in a marina

A well presented boat in an easily reached location will achieve its best price, but make sure you’re not tempted to be overly optimistic. Photo: Greg Rosenke

How to gauge the market

With most other big-ticket items there is plenty of data available to figure out what the price at which similar things – whether houses, cars or aircraft – change hands. However, that is often not the case for boats. Scanning adverts of vessels similar to yours will give an indication of asking prices. But the competitively priced boats tend to sell quickly, leaving the bulk of those in adverts being those that are overpriced.

Yacht brokers are in a position to give expert advice, but beware of operators who, like a car salesman, suggests an inflated value in order to get your business. Brokers who advertise on yachtworld.com have access to the SoldBoats.com database, which details the actual selling prices of many thousands of yachts across Europe every year. This enables the broker to base their advice on hard facts. They can then apply smaller adjustments for location, the current market situation and different levels of trim and condition between your boat and similar craft that have sold recently. If the broker won’t tell you the price that the last two or three boats like yours have sold for it’s worth talking to someone else.

Allow margin for an offer?

Many vendors are tempted to inflate their asking price above the expected sale price in order to allow some headroom for a perspective buyer to make an offer. The problem with this approach is that the market often doesn’t work that way – it’s the realistically priced boats that sell fastest, often for a figure that is very close to the initial asking price.

In particular, if you fit the category of vendor that will not use the boat while it’s for sale, pricing at the expected sale price is invariably the best way forward. In this situation the risks of over pricing are very one-sided – the potential losses associated with failing to sell quickly are large, but any gains that might be achieved through selling at an optimistic price are likely to be small.

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Rupert Holmes has more than 70,000 miles of offshore cruising and racing experience, in waters ranging from the North Sea to the Southern Ocean and Cape Horn. He writes about all aspects of boat ownership and marine travel, including destinations, seamanship and maintenance, as well as undertaking regular new boat and gear tests. He currently sails around 5,000 miles per year and in the past couple of seasons has cruised from the UK to the Azores, as well as winning his class in the 2014 two-handed Round Britain and Ireland Race. He also owns two yachts, one based in the Mediterranean and the other in the UK.