My dad always dreams of owning his private yacht, but he still delay his gratification to wait until he is financially stable before purchasing one. I, too, was the same as him; he felt that owning a yacht is a symbol of accomplishment. In 2013, our dream came true. My dad finally decided to celebrate his success in his business career and my graduation from a bachelor's degree in finance by buying two pre-owned yachts.
My dad and I decided not
to purchase a new one but instead to buy that are used. I was the one that look
for great deals on the internet so that my dad gets a bargain for his first
luxury yachts purchase. We end up buying an Azimut 80 and Sun Seeker 74 yacht
that was manufactured in the year 2003. Both yachts were about ten years old
when we purchased them, but there were so many benefits of buying them used
rather than new. In this article, I would like to share the reason why
my dad and I decided to purchase used ones and not brand new.
1. Big Bank for the
Buck.
Yes, this is one of the
prime reasons for purchasing a used yacht. A used yacht usually costs so much
cheaper than a brand new one by a lot. These toys depreciate in value by a lot,
and buying one that is used can be a smarter choice. With a used boat, you get
more boat for fewer dollars, lower cost per year of ownership, and less on the
line if you decide a different style or size boat would better serve you.
My dad and I were able to buy yachts that are big in size and purchase it at a fraction of its market suggested retail when it's brand new. That's the reason why we were able to buy an 80 and 74-foot yachts. If my dad had bought it brand new, we wouldn't get the same size yachts for our budget.
We were able to save a lot of money by purchasing the yachts used. The great part is that there were not much different from the newer model to the old one. Yes, the design might be different. However, in term of the size of the boat, we were able to get the big yacht that can accommodate many people to go to the island.
2. It's Cheaper to be
Renovated in Our Country.
The second reason why my
dad and I decided to buy it used even though there might be many issues with
the yachts is because it's cheap to be renovated in our country, Indonesia. My
dad didn't buy the yachts and do nothing about it. In fact, he spends little
money to get the yachts fixed and also modified. It was a fun experience for
him since he likes making used products look amazing and new again. He had been
doing that since he was still young and poor. He didn't do this with a yacht,
but with a used car.
He had workers in Indonesia to fix the interior and exterior of the yachts. For example, he had both of the yachts to be painted interior and exterior again. The yachts look like as if it's brand new, even though when the yachts are really old. My dad didn't spend much renovating and modifying the yachts since the labor cost is cheap in our country. He wouldn't be able to do these things if he was living in a developed country since the labor cost is usually expensive. In addition, it won't be worth it to have an old used yacht to be renovated and fixed if you were living in a developed country since the labor cost would be insane.
3. Slower Deprecation.
When you buy a yacht
used, you tend to have slower deprecation of owning them. The main deprecation in
a yacht's value comes in the first few years. Since we bought the yachts in
2013, they were 10 years old during the time we purchased. The two yachts we
purchased was a 2003 model, and the price had depreciated a lot since it was
first manufactured.
Even when this article is written (June 2020), the yachts have the same resell value we purchased in 2013. The reason is that the salvage value of the two yachts is near the price we purchased. Both yachts had hit its bottom price from the original price when we purchased the yachts.
For example, the Azimut 80 2003 model is priced at $4,500,000 when it was still brand new. We purchased it at $700,000 in the year 2013. That's a depreciation of 84% from its original price. Even when we had the Azimut 80 for a few years already, the value of yachts is still near the price we had purchased. In fact, since my dad has put time and effort into renovating and modifying it, he had the opportunity to sell it at a higher price from the price he purchases, which can profit him from owning the yacht. He wouldn't be able to do this if he had purchased the yachts brand new.
My dad and I felt that those times we spend delaying our gratification pays out. If my dad had bought the yacht brand new in 2003, my family wouldn't have the factory we currently have now. We would end up having a yacht that is only valued at 15% from its original price. I'm so grateful that my dad is smart and wise when it comes to making a financial decision. If it wasn't for him, we wouldn't be where we are today.
4. Charter Potential.
Owning a pre-owned yacht
has the benefit of having it chartered. Since the yacht is not new, you will be
more content to have them rented and used by others. There are demands of
having your yachts chartered by a person who wants to have a party or gathering.
Having the yachts chartered can help with paying expenses on the upkeep of
owning a yacht. You are able to let renters beat the yacht a little and give
you your money back. This is different if you had a brand new yacht; you tend
to be more pre-cautious to have it used by other since they might damage it.
My dad was able to have the yacht rented out a few times when there is a demand for it. Some of the occasion is from people who want to have a yacht party to an island, and renting one is a better option than purchasing one themselves. Not everyone wants to go through the trouble of owning their yacht. Rather than owning one, they simply just charter a yacht when they want to use it for a special event.
In Conclusion.
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