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| With the cost of some rigs going up and up every year, do you think there will come a time when dealers will start to offer customers the choice of leasing a complete rig as opposed to buying a complete rig? Its done everyday in the automobile market, why not in the marine market?
Seems to me this idea, while different, might be feasible.
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| ttt |
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Location: Rockford MN | Jack just wondering where you think they are going to sell all these boats that return from the lease? Autos have huge auctions for this sort of thing, would you just hold a huge auction? I have the feeling that dealers would not be lining up to buy up these used boats. People buy these over priced rigs now because they can get 12 year loans. I'm sure that when you get all these boats back after the lease that the banks are'nt going to give the kind of rates that will turn them over fast.
Just some of my thought on this matter, what do you think? |
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| Gordy,
Many people are "payment" buyers. They buy the best they can get for X dollars a month payment. Many of these boat buyers would likely run bigger and better rigs if they their budgets would allow them the payments each month. Long term financing, while convienient for buyers, does scare the dickens out of alot of people at the same time. 120 boat payments or more IS a long time!
On a lease, the monthly payments would be lower. Dealers could easily set their residual value scale such that when a rig is returned to them, they could market that used larger rig at a more customer friendly price because they have already recouped the depreciation plus some on the lease of the new unit. The dealers will also make a profit from the financing of the lease. For instance, on the truck lease I just worked out, the dealer is buying the financing of the lease at a money rate of .00267, and selling it to me at a rate of .003. Multiply that by 24 and you have the margin the dealer will make on that lease for the term. On a $50,000 "boat" lease, using those money factors, a dealer would make $3750 on the financing over a 3 year period. Plus, the built in mark up, and whatever he can make on the resale of that rig on the used boat market, and maybe the financing of that deal also!!
In the end, a high end boat manufacturer could put more of their rigs on the water, either new or slightly used, at a price that will open the doors to a larger market segment in either catagory.
There are certain tax advantages to leasing a truck as opposed to buying one. That would probably be true with boats also. Imagine how easy it would be for weekend tourney fishermen to deduct part of the cost of their boats!!
As far as the auction question. Thats like comparing apples and oranges. There must be at least 10 times as many autos on the market everyday than there are boats, and that is being conservative!
Edited by JLDII 2/28/2005 1:49 PM
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Location: Rockford MN | I understand the lease part, but still don't know what a dealer is going to do with all the used boats that come back? Why on earth would he (The Dealer) what to take on all these used boats? Now he would have to warranty them and take ALL of them back, not the select few very nice ones.
Plus you say he could sell them cheaper than the new ones to people that can't afford and new one. A $50,000.00 boat used is still going to $40,000.00 at the dealer. I just dont think they would want to take on a bunch of them, I know if I were a dealer I would'nt! |
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