Should I Sell or Trade My Boat? Tips for a Successful Sale

Should I Sell or Trade My Boat?

Maybe you are beginning to consider upgrading your boat or selling a boat that you just aren't using enough to justify having a payment. Should you sell it to the general public, sell it to a dealer, or trade it in for a new one? Spoiler alert: There is no precise or simple answer. The right answer for you depends on several different factors. In this article, we will attempt to identify the different decision variables so that you can make the right decision for your situation.

Selling a Boat Privately

Almost without exception, the theoretically best way to maximize the cashback in your pocket is to sell your boat yourself. Think of it this way, the market (potential buyers, and other sellers with similar boats) determine what a boat will sell for. You of course decide what price to post your boat at, but the market decides what it will sell for. Understanding this fact, it is important to know that whether you are selling your boat yourself or if a dealer is selling it, the boat is going to sell for approximately the same amount. So, if you sell it yourself, all of the proceeds from the sale go to you, therefore maximizing the cash in your pocket. If only it were that cut and dry!  Let's walk through some of the factors that will determine your selling experience.

Reach

There are some pretty good resources you can use to get your boat the exposure you need to successfully sell your boat. Boat Trader, online forums, and social media are all good ways to get your boat noticed. Depending on your situation, this may end up being all the exposure you need, but it may not. It is important to understand that a large and reputable dealer will use many of the same listing strategies that you do. For instance, they will also list your boat on Boat Trader. It is NOT the same though!  You will pay $50-$100 to list your boat on Boat Trader. For a potential buyer who enters your precise boat in a search, they may very well find your listing in the huge pool of boats on the market. You have to understand though, a prominent boat dealer pays Boat Trader fees over $10K a month. Their listings get priority placement! The same boat listed by you and listed by a dealer is going to be seen infinitely more times on the dealer's listing. Also, a successful dealer will have a maximized SEO strategy for their website. Again, this results in the listing being seen exponentially more than a listing you post yourself. The point is, you very well might hit it just right and find that perfect buyer by using the above-mentioned strategies but the dealer's chances of selling the boat are so much higher just as a result of the reach and exposure that is built into their business. This leads many sellers to pursue a strategy of taking a go at it on their own for a period and then having a backup plan to sell to a dealer if they aren't successful. Not a bad strategy, unless time is of the essence.

Ease of the Transaction

Selling anything to the general public can be a hassle. Maybe you have sold an old couch or a bike that you just don't ride, on Facebook Marketplace or CraigsList. You likely know what I mean when I say it can be a hassle. Now imagine those complications dealing with a $100 item being compounded by the fact that you are selling an item worth thousands of dollars. It's a thousand times more complicated!

The first, but only moderately frustrating aspect is the sheer number of mindless inquiries. Ever gotten that direct message, "Is this item still available?" That one makes you roll your eyes, but not incredibly inconvenient. The next level inquiry is the buyer who wants to talk it out. They ask for a phone conversation and proceed to ask you questions you could have never thought to anticipate: 

"Do you have complete service records for the life of the boat?" 

"How many hours does the engine have?" 

"Was the boat ever used in saltwater?" 

"Was the boat garage kept or stored on the water?" 

Trust me, the list of questions goes on and on!  Then, after the inquisition...GHOSTED!

Not all calls end with a ghosting though. Some want to come to see the boat. Now this is where it gets hairy. You might encounter Jim the Joy Rider. Jim is the guy that seems all pumped up and excited about buying your boat. He asks for a test drive. You arrange your schedule to take him out, drive around, answer all the questions, and he departs saying, "Let me think about it and talk to the wife." And...ghost!

Then you may encounter Harry the Haggler. After taking your valuable time and energy, he says he will take it if you can drop your price by some ridiculous amount.

Or how about 'Hold it for me Holden'? He's the guy that says he is definitely going to buy it.  He just works until late every evening and can't get there until Sunday....you know, that day that you like to spend with your family. He says if you will just hold it and not sell it, he will bring you cash on Sunday.

Finally, there is Financing Phil. Phil shows up at the appointed time, loves the boat, accepts the price, and then....drops the bomb. "I will go to my bank first thing Monday morning and get financing lined up." Oh boy, this could go south quickly.

You get the picture. There are about 100 other frustrating scenarios, but I think you get the point.

Finding the right buyer isn't always as bleak as the picture I'm painting. Sometimes finding the buyer just falls right into place so then it's time to complete the transaction.  Are you prepared to:  transfer titles, warranties, registration, etc? It's not complicated if you are accustomed to doing it, but are you?

Dealing with these challenges is what dealerships do for a living. It's just part of the day-to-day for them. No less frustrating, but they are set up to deal with it. Think of it this way, they earn their profits by dealing with all that so you don't have to.

Selling/Trading to a Dealer

So, if you decide to sell/trade to a dealer, what should you expect? First, find a dealer of some significant size, with a strong reputation. Not throwing shade on smaller dealers but the reality is that for the dealer to have the available cash necessary to give you a fair price for your boat, they tend to be larger, more established operations. Before engaging with the dealer, do your research. A great place to start is boatvalue.com, powered by JD Powers/NADA. The NADA values are not scientific and shouldn't necessarily be taken as gospel but it is a very good place to start  If your boat has very low hours and has been cared for exceptionally, then the dealer is likely able to give you a little more than the used trade-in value. Next, search Boat Trader for your model in similar model year ranges. This will give you a good idea of what others are asking for similar boats. Be discerning here though. Keep in mind that the asking price is not necessarily the selling price! Don't make the overly optimistic mistake of assuming that because you saw a boat listed on Boat Trader for some exorbitant price, you will sell your boat for that price.

The best strategy for approaching a dealer is to go in armed with the facts. You should be able to say, "Here is the used trade-in value from  boatvalue.com, and here are 3 very similar comps. Based on this information, I would like to get $X for my boat." Now, don't mistake that to mean that the dealer is going to automatically just agree to your number.  There are many, many, factors, but a good dealer should be able to respond with very understandable justifications for why they can or can't agree to your number. There could be numerous and very reasonable explanations. For example, the slow moving / hard-to-move model is overstocked in that category, the overall market is soft currently, the boating season is coming to an end, and a ton of other possible valid reasons.  

There is almost always a negotiation to be had. That's ok. It is generally not that the dealer is trying to squeeze every cent out of you. The dealer is taking a financial risk by buying your boat. Once they turn that cash over to you, it is the cash they don't have available until they turn the boat. Any responsible dealer will try to minimize their risk, while at the same time being fair to you. The main point is, you have to find a dealer that you can trust and one that displays a great deal of transparency in how they communicate about the transaction. Big red flag: If a dealer gives you two different prices, one for a trade, and one for if they buy it outright. The boat they are buying from you is going to sell for the same, whether they buy it from you outright or take it in as a trade. Why would the offer be different for a trade or purchase? If it smells fishy, it probably is!

Wrapping It Up

So, to summarize, deciding whether to sell your boat to a private party or to sell it to a dealer, really comes down to a calculation of value to you. Is it worth the hassle to maximize the cash in your pocket? Not that the decision itself is simple, but it does just come down to that. Sometimes it's hard to know if it is going to be worth the hassles or not until you try. Nothing wrong with giving it a shot and using a good dealership that you trust as your backup. Also, there's nothing wrong with avoiding the headaches right from the get-go and having a dealer write you a check on the spot and being done, giving you the time to enjoy the things in life that you want to be doing, with the money that you just collected!  

Whichever path you chose, good luck and happy boating!