depreciation

[tee-boy]

For those of you who sell outboards:<br /><br />By what amount would a typical outboard drop in value after one year of purchase? Two years?<br /><br />My quesion really relates to Merc 4stroke 50-60hp.

 

[Spinner1]

Re: depreciation

I know you asked for a retailer. Here's a guideline.<br /><br /> http://nadaguides.com/ <br /><br />I'm just a buyer like you, but just spent considerable time shopping for something similar. It seems they take a pretty good hit the first year. 20-25%, and then they hold value very well with depreciation of only 5% or so for the next few years. The difference in price between a 2 year old motor and a 4 was just not enough to make the old motor a sensible purchase. <br /><br />It's going to vary though. A dealer than owns five used late model Mercury 50HPs in October is probably going to be in the mood to move a few. <br /><br />IMO, the NADA guideline isn't very useful for older motors where condition is everything. They list some 15 year old motors for under $500. And reality is you would be fortunate to buy one for $1200 in good condition.

 

[FlyBoyMark]

Re: depreciation

All those books and list are poo poo.....ALL BANKS behind closed doors look at most forms of transportation and outboards as 20%/year depreciation...regardless of what we say market value is or what it may really be....

 

[Spinner1]

Re: depreciation

Originally posted by FlyBoyMark:<br /> All those books and list are poo poo.....ALL BANKS behind closed doors look at most forms of transportation and outboards as 20%/year depreciation...regardless of what we say market value is or what it may really be....

I know what you are saying, but you are out of luck at the marina when you try to buy a 4 year old O/B in good condition for 80% off new price. Ain't gonna happen no matter what the bank says. If you have good credit, the banks around here will let you get stupid on most purchases. They shouldn't, but they do.

 

[tee-boy]

Re: depreciation

Good point Spinner but if it decreased 20% per year, then over four years the total depreciation would be about 50% not 80%.

 

[tee-boy]

Re: depreciation

I do agree however about the banks getting stupid. I know b/c I've happened to meet several loan officers.

 

[BillP]

Re: depreciation

Hey teeboy,<br />Most, if not all, of the lending institutions use book value for loans. Use the nada and it will be as close as you are going to get on cost. <br /><br />Book value for used motors starts after one year. Buy a motor at the beginning of the model yr, use it for 13 months and it will have the same book value as a motor that is purchased as a yr end closeout and used only one month. The year end close out took the biggest depreciation hit on the book for time of use. It makes the depreciation fuzzy when buying one yr old motors.

 

[Spinner1]

Re: depreciation

Originally posted by tee-boy:<br /> Good point Spinner but if it decreased 20% per year, then over four years the total depreciation would be about 50% not 80%.

It depends on what you mean by 20% depreciation. But I understand your math and I'll buy that. Banks do use book value, but there is much more to it than that. They want to loan money to people who will pay it back. They don't care if you get ripped off. What Bill stated is accurate for many purchases. I bought my wife an eleven month old Ford Escape. They were quite willing to loan me new MSRP which would be incredibly stupid to pay. I walked in and asked for the title to my truck which was collateral on an antique car loan that was over a year from being paid off. They said sure,no problem. I never rely on the bank for true market value of anything. They won't protect you from yourself like the old days.