Part Exchange: How to Trade in Your Boat
If you're planning to change boats, it is well worth looking into the part-exchange and trading in options available through brokers.
Part-exchange can be the easiest route of all to a new boat, but it pays to have an appreciation of the pros and cons of doing so, as well as knowing how to negotiate the best deal.
As when buying a car, when buying a boat, part exchanging your existing boat against a new vessel can make a lot of sense. Although the price you receive for the existing boat if you trade it in is likely to be less than might be achieved in a private or brokerage sale, the certainty that your responsibility for the existing boat will cease when its replacement is delivered can make this a very attractive option and can save money on upkeep, storage, hassle and time.
Advantages of trading in a boat
Depending on its size, the average time taken to sell a used vessel in the UK varies from around 250 days to well over 12 months, during which time you still need to pay mooring fees, outgoings such as insurance and keep abreast of maintenance. A trade-in or part-exchange process therefore takes much of the hassle and risk out of trading up to a different craft and is often an attractive proposition since it eliminates the possibility of becoming saddled with two boats while waiting for one to sell.
Downsides of trading in a boat
On the downside, you will not get as good a price for the vessel as with a private or brokerage sale. However, many boat dealers take a very pragmatic approach to potential trade-ins. Once the contract is signed for your new vessel you can usually put your existing boat on their brokerage listings. This allows the possibility of the boat being sold in advance at a price that’s higher than the trade-in offer, while also having the safety net that you will be able to get a guaranteed price for the old boat if it hasn’t sold before the new one is delivered.
When valuing the boat it’s important to take a realistic view of its value – far too many owners have an overly inflated opinion of their vessel’s worth, which sadly results in boats that stick on the market for extended periods of time. Find out more about working out a sensible price to trade in your boat here.
Process for trading in a boat
Before the deal is finalised the buyer will almost certainly want a survey of your existing boat – you can expect them to pay for this. Even if you plan to put the boat on brokerage while waiting for the new one to be built and commissioned, a survey at this early stage will help to identify potential problems at an early part of the process, which may save significant hassle at a later stage. Find out more about boat surveys here.
While most part-exchange deals are against a new boat, a dealer may be happy to take a boat in part exchange against a used boat they have just accepted as a trade-in. If you’re planning to opt for this route then it can be important to act quickly – often the pricing of these boats is such that they are quickly passed on to new owners, as dealers won’t benefit from holding these boats in stock.
There are many ways in which the two boats involved can be priced – a dealer may for instance make a flattering offer on your existing boat, but give no discount on the new one, or vice-versa. However, the notional value ascribed to each one is merely semantics – the key figure you’re interested in is the “cost to change”. This is simply the difference in the agreed value between the two boats that you will need to finance or cover with cash.
As ever, it’s important to make sure the boat is presented as well as you can before showing it to the dealer, with all personal kit and clutter removed if possible. While it could be argued that, in theory, experienced dealers should be able to see through to the underlying condition of the vessel, in reality their main concern is how quickly they will be able to move the boat on to a new owner.
If the boat is poorly presented they will need to factor in the price of a cleaning/valeting operation, additional storage costs, and the additional length of time for which their money will be tied up. Find out more about preparing your boat for sale here.
In summary, the more you can do to enable the broker or dealer to move the boat on quickly, the better the deal they will be able to offer you. At the same time, this also improves the chances of achieving a brokerage sale at a higher price than the trade-in offer while you’re waiting for the new boat to be delivered. Good luck with trading in your boat.