Buy preowned without getting used.

Previously published in Powerboat magazine

By Gregg Mansfield
Welcome to the University of Hard Knocks and the continuing education course on purchasing a preowned—also known as used—boat.

The only prerequisites for the course are a love of high-performance boating and access to a large credit line. We’ll read about what to avoid when buying a used boat and hear from several speakers about their experiences.

Mr. Britton will explain why you should have concerns if a boat is freshly painted. ¶ But class, please don’t be alarmed. If you do your homework, there are some good preowned boats at reasonable prices.

Now please open your textbook and get out your No. 2 pencils. And please pay attention!

Chapter 1: Knowledge is Power
After you’ve narrowed your choice to one or two boat models, it is important to learn as much as you can about the line.

This will help you stay clear of models that owners are dumping because of performance or safety issues. Talking with current and former owners can uncover potential problems such as delamination or construction flaws. The same goes for the engines and drives on the boat. Check with the manufacturer to make sure there haven’t been any recalls or reliability issues.

This is where the Internet has been a boon for used-boat buyers. Owner groups and associations are a good source for getting a heads-up. Check with other sources by visiting a local boat yard or talking to marine insurance brokers to identify potential problems.

If you plan to sell that recently purchased preowned boat in a couple of years, you should always keep resale value in mind. Obscure brand names may be tough to sell especially in a down market. If a production builder sells too many models of a popular brand, that could keep prices depressed.

“You have to do your homework and be informed,” says Peter Britton, a marine surveyor in Fountain Valley, Calif. “Be an informed buyer.”

Chapter 2: Undercover
Used-boat buyers have come to expect a clean and shiny boat. Does that detail work mean the owner is trying to hide something or is it simply good salesmanship? Has the boat been freshly waxed, the carpet in the cabin shampooed? And does the engine look like a four-course meal could be served on it.

A clean boat is a good start on whether it has been properly maintained over the years, but it is only skin deep.

Britton said buyers should be on the lookout for boats that have been freshly painted or have new machinery. That could indicate the boat may have sunk or caught fire, he said.

Jay Castaline, owner of Cast-A-Line Marine in Hollywood, Fla., said consumers need to look closely for clues of neglect or that a boat has been sunk or damaged. A few of the tips he suggested are:

Unplug wires to see if there is a lot of corrosion, it could indicate the boat has sunk. (Some corrosion is not unusual if the boat has been used in a saltwater environment).

Check for high water lines behind the engines or hard-to-see-places in the engine compartment, which might suggest the boat had taken on more water than it should. Castaline said clues to a sinking also can be found in the cabin by closely examining the carpet. Faint water lines may be indications of an earlier problem.

Finding some rust on an engine—especially a boat used in the ocean—isn’t that unusual. But if the engine has been repainted it could mean the engine had taken an unwanted bath or is older than the seller is willing to acknowledge.

“Just because it has rust doesn’t mean it has been sunk,” Castaline said.

Castaline, who also does survey work, tells potential buyers to write down the serial numbers and call the manufacturer’s consumer affairs division.

Look for signs of accident damage—Bondo patches or raised sections of fiberglass that could be indications of significant repair work.

Chapter 3: The Broker Scene
Whether you decide to go through a broker to buy or sell a boat is a personal decision. Thousands of boats are bought and sold every year without the assistance of professional brokers.

But good boat brokers can be invaluable in finding the right boat and handling the transaction. Brokers are paid for their expertise—generally about 10 percent of the boat’s sale price.

If you are selling a boat, brokers can be a convenient resource to show the boat and weed out less-than-qualified buyers. Brokers also can handle negotiations and sale, and they prevent you from having to “be available” to show and demo your boat.

Peter Pavkovich of Custom Marine Sales in North Miami says part of his job is to educate buyers about boats. Custom Marine sells preowned high-end catamarans and matches buyers and sellers around the world.

“I try to guide them to the boat that suits their needs,” said Pavkovich, later adding, “The customer base we offer is so much wider than a person will get on their own.”

Bruce Bullock of Bullock Marine in Seabrook, Texas, says a good broker will be able to assist a customer if something goes wrong after the sale. “You are buying their confidence, ability and experience,” he says. “If there is a problem you can fall back on the dealer or broker.”

A good broker will try to solve the problem, he said. However, it may not always be to everyone’s liking.

Chapter 4: Ready to Buy
You’ve zeroed in on the boat you want to buy and after a sea trial, you’re ready to sign the check. Try to be patient.

Be inquisitive. Ask the owner questions about the boat and its history. Does he know the previous owners or still have their phone numbers? Do they have a copy of the maintenance history? Copies of receipts? Does the boat still have a hull warranty from the manufacturer? What about an engine warranty? Are those warranties transferable?

A buyer shouldn’t expect the seller to know every answer but if they’re being evasive on most questions, it should raise some concerns. The same goes for several owners of a boat in a short period. This information can be unearthed in a simple title search that costs less than $100.

“Do you want to buy a three-year-old car owned by five people?” Britton says.

It’s always important to have financing arranged ahead of time to prove to the seller you’re a serious buyer. Providing a letter from the bank will show you are different from those who are looking to get some free rides until they make up their mind. Solid financing may be the difference in your bid being selected if there is a bidding war for the boat.

This is also the time you need to see a bill of sale, said Caroline Ajootian, assistant vice president of consumer affairs for BoatU.S. If they don’t have that, Ajootian said, ask for an insurance certificate that has the owner’s name. By asking for proof, it will reduce the chances your deposit might be taken by a fly-by-night.

At the same time, if the price is too good to be true, it probably is. Internet auction site eBay, which is an emerging force in performance-boat sales, may not be the best way to go. Buying a boat unseen, experts say, can lead to a host of problems.

Castaline said he wouldn’t tell potential buyers not to bid for boats on eBay.

Potential buyers may find themselves in a bidding war for a performance boat on the Web site and could end up paying more than buying it from a private party.

Also be wary of high-pressure tactics by salesmen or boat owners. If you hear the old “Another person is waiting to buy it,” line, remember there are other boats in the sea. Hundreds of them.

Chapter 5: Contractual Obligation
In today’s litigious society, it’s always good to protect your interests when placing a deposit on a pre-owned boat. Ajootian of BoatU.S. suggests as part of the sales agreement including several contingencies. Make the sale contingent on a satisfactory sea trial and inspection of the boat.

Also be sure to allow for an out if you are unable to find insurance or financing. When it comes to financing, the buyer needs to put in the sales contract a cap on the amount financed. The dealer may be able to arrange a loan, but it could be at an exorbitant interest rate.

“That’s why I stress satisfactory financing,” she said.

Chapter 6: Survey Says
There are two schools of thought when it comes to hiring a surveyor. One side thinks they’re a waste of money and others believe surveyors can be invaluable at finding problems. Just like doctors and lawyers, there are good and bad surveyors.

If you are planning to finance that preowned boat, the lender likely will require a survey before the money is loaned. It is important to check the credentials of any surveyor—even those recommended by the bank—to make sure they are qualified to examine high-performance boats.

If the surveyor tells you he hasn’t seen a go-fast boat in years, it’s time to look elsewhere. Surveys are relatively cheap—about $15 a foot—and should take at least two or three hours. Generally, you shouldn’t hire the surveyor recommended by the broker or seller. He or she may not have your best interest in mind.

“I always recommend a survey,” Ajootian said. “It’s a good way to learn about the vessel.”

Buyers can show up at the same time as the surveyor, but Castaline recommends waiting until the end of the examination. The surveyor can take the buyer through the boat and point out positives and problem areas.

Some surveyors are qualified to do engine tests but industry experts recommend taking it to a mechanic certified by the company that built the engine or propulsion system. The mechanic should do a compression test and a leak-down on the engine and inspect the drives. Surveyors suggest listening for any unusual sounds when sea testing the boat. An ear can go a long way in detecting problems.

At the end of the process the surveyor will provide a report and an estimate of what he thinks the boat is worth. If you think it’s low, use comparable boats from classified ads and the N.A.D.A. Marine Appraisal guide to make your case. (These sources already should have been consulted before you made your purchase offer.)

Chapter 7: Taking Delivery
When you finally accept the boat, make sure you get the boat you paid for. This may seem like common sense—and it is—but look for items that may be missing or replaced since you inked the deal.

Inspect the drives and even the engines to ensure they haven’t been changed between the inspection and delivery. More often, what will be missing are pillows in the cabin or ice chests. Check to see if the stereo system hasn’t been replaced with an inferior one.

The easiest way to avoid these potential problems is to spell out what is included in the sales contract. Specify what must be in the boat at the time of sale—from pillows to the boat cover and even life jackets, if warranted.

When the boat is delivered, stress it should be there during the daytime. One boat owner tells the story about buying a boat sight unseen from a dealer. The boat arrived at night, and after closer inspection at home, they discovered the engines were worn out and the deck had been freshly painted to disguise cracks in the gelcoat.

Ultimately it was resolved but the moral is not to accept a boat at night.

Chapter 8: From A Seller’s Perspective
David Dall of Greenwich, Conn., has sold his 1986 flat deck Cigarette five times in the last year—yet every sale has fallen through.

Dall knows the other side of Dall knows the other side of the transaction and has learned that potential buyers also can take advantage. One guy dropped out because he couldn’t get financing for a boat with big horsepower, and another buyer backed out because his wife didn’t like the color of the cushions in the cabin.

“It’s been one excuse after another,” Dall says.

The missed sales have since changed his perspective. He’s no longer dealing with what he calls “tire-kickers” and is only entertaining offers from serious buyers. Buyers who are willing to a show a commitment letter from a bank or make a large deposit.

Dall believes that because of the weak economy buyers are looking for bargains. In Dall’s case, he has completely restored the offshore boat and is selling it because he owns another one.

“I think they’re getting greedy,” Dall said. “They know the market is down and the economy is down. They believe that sellers are desperate to sell.”

Dall does have one tip for sellers: Pay to have the boat detailed, Dall says it’s worth the money.

“(Buyers) pick apart the smallest things,” he said.

Chapter 9: More for Less
Some boaters won’t own a boat unless it’s new. That’s great because without new models there can’t be preowned boat sales.

But if a buyer is willing to accept some wear and tear—and some risk—purchasing a preowned boat can be the way to go. You may not be able to afford that 30' V-bottom new but if you’re willing to own an older boat, you may end up with a 36-footer.

Whether the boat is new or preowned, doing a little homework now can save you a lot of money—and headaches—in the future.

Class dismissed.

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