When setting the price to sell a boat, just about everyone starts by looking up book value with the NADA guides. And yes, this is a good starting point. But in reality, few boats on the open market have a fair price that matches up exactly with the NADA value.
So, how do you know how to set the right price for your boat? How can you avoid asking too much (and have trouble selling it) or too little (and losing out on some of the cash you deserve)? Here are five important factors to bear in mind that will help you find the right number.
1. Mechanical Condition
If your boat isn't in good working order, obviously, the price should be lower than what NADA says. But the cost of repair is simply not enough to subtract. First off, no one wants to buy a boat that isn't running right. A do-it-yourselfer or a budget-conscious boater may be willing to take on a project to get a bigger, better boat than they can afford, but only if it’s a tempting deal. Secondly, there’s cost over and above the strict monetary expenditure of repairs. You also have to consider the time and effort needed to schedule repairs, and possibly to tow or cruise the boat to the shop. Finally, selling a boat that isn't working properly signals to the buyer that the seller doesn't care too much about the boat’s condition, and this is a sign that there may be other problems with the boat related to neglect or a lack of maintenance. So before trying to sell a boat, you really should have all necessary repairs done to it. If not, as you price your boat you should plan on subtracting at least double the cost of those repairs from the bottom line.
2. Cosmetic Condition
Let’s face it: nobody “needs” a pleasure-boat. Buying one is a purely emotional decision, and as a result, looks count for as much as anything else. In fact, the way a boat looks can often out-weigh all of the buyer’s more logical considerations. As a result, you have to adjust your price considerably. A boat that looks very rough will often sell for one third to one half less than one that looks pristine. Fortunately, this is a fairly easy issue to resolve. Smart sellers will replace things like ripped canvass and split seat cushions, which are easy fixes. A $1,000 investment in items like this, which have a huge effect on how a boat looks, can vastly improve your chances of selling a boat at or near its book value.
Faded or oxidized gel coat should also be addressed—who wants to buy a boat that doesn't shine? No one. If the oxidation is superficial you can easily bring back that shine (watch our How to Restore Slightly Faded Gel Coat video), and if the oxidation runs deep a small investment with a professional cleaning crew can up the value of your boat significantly.
Even trim and brightwork should be addressed. If it looks bad, subtract the cost of a full face-lift from the value of your boat. Or instead put in some elbow grease and sweat-equity, to bring your boat’s value back up to par.
On the flip side, if you’ve kept your boat in looks-like-new condition, don’t be afraid to go above the NADA value when determining price. People expect to pay a bit more for a boat in like-new condition, and in some cases, asking 10 to 20 percent over book value is not out of line.
Where you boat is physically located can have a surprisingly significant effect on how much it will eventually sell for. Boats located inland carry a value at least 10-percent higher to saltwater buyers, since they know the boat’s systems won’t be as corroded and salt-damaged as the other boats they’re looking at. Yet other inland buyers won’t be tempted as much, since they expect to be looking at freshwater boats.
Boats being sold in sparsely populated areas are at a significant disadvantage, since buyers will probably have to travel a substantial distance to even consider buying them. In this case, knocking 10 or 15 percent off the boat’s price will help tempt potential buyers to make the trip. In some cases, sellers will offer to subtract the cost of travel from the boat’s list cost, should the buyer decide to make the purchase.
Unless a boat and its electronics are very new, this usually has a minor-league impact. Sorry, but you can’t add the $2,000 you just spent on a chartplotter/fishfinder to the boat’s price and expect buyers to be happy to pay for it. There are two problems with this: first, different people like different electronics and often have strong opinions on the matter. You might love your Raymarine unit, but I may want a Lowrance, and while a buyer who’s taste jibes with your own may be willing to pony up, other folks won’t—limiting the pool of potential buyers. Secondly, electronics become obsolete very, very quickly. Many units built just three or four years ago are already out of date, and as the buyer, I probably would rather get a new unit of my own choosing as opposed to sticking with a unit you chose a few years ago. As a result, you really can’t add more than a third of the replacement value of your electronics to the boat’s listed price, and expect anyone to happily pay it. Note: many sellers either negotiate the price of electronics separate from the boat itself, or offer to reduce the cost of the boat an according amount and remove the electronics before the sale.
5. Accessory Gear
Here’s an area (finally!) where you can reasonably add to the NADA value. Significant accessories like a windlass, kicker motors, air-conditioning, and the like all add real value to a boat. Not as much as their initial purchase price, of course (unless they were installed within the past few months and have little to no use on them). But they should be considered at half to two-thirds of their price.
As you set your price, remember that in all likelihood, prospective buyers have looked up the boat’s NADA book value, too. In this day and age, when it’s easy to do research and look up comparative boat prices, almost everyone is well-educated as to a boat’s general cost. So set a price that seems fair. Otherwise, chance are the boat you’re selling simply won’t sell.