Not Taking it In the Shorts
The search for the "right" Carver 506 took us nearly a year, after we concluded that our client service business required a base of operations in Southern California, where we had important clients. A yacht of the right size makes a great office, and the built-in accommodations could eliminate the need for hotels during several day visits from our home office in the San Francisco Bay Area.
What delayed us was that we were philosophically unwilling to purchase a new 506 yacht from a dealer. It had to be used, one or two years old, but no more, purchased through a broker. And, it had to have the "all-weather" options of a fully-enclosed, hardshell bridge, and a fully-enclosed aft deck. The latter, particularly, adds to giving this 52-foot yacht the accommodations of a 65-foot yacht, or better.
Now, many of you might have done a double-take at our new-yacht philosophy a few sentences ago. So, let me rant for a few paragraphs on buying new boats.
It's crazy. If you can see yourself taking a couple hundred thousand dollars, tying them in a canvas bag with a 65-pound Fortress anchor, and dropping the lot over the side into the Marianas trench, then be my guest. Because that is, in effect, what you have done the instant you sign the acceptance paperwork on a factory-new yacht of this size, and in 1.7 picoseconds it goes from "new" to "used." Some people call it depreciation; I call it "evaporation" – evaporation of your money.
Now the dealer will try to convince you of all the advantages of owning a new boat, but the only one that I can see – and I've been buying boats for 35 years – is that new-boat warranty. Such an advantage. What would you say if you were buying a recent, used boat, and the broker said, "...and we can provide a full parts and labor guarantee for one year (or whatever), for only two hundred and fifty thousand dollars!" Right. Where do I sign?
No, the trick is to find a boat where some other poor schmuck has already taken the big depreciation hit, found all the bugs, and battled with the dealer to get them fixed, on his time, not yours (or mine). If you're lucky, this guy sank additional (big) money into the few dozen remaining infant mortality-type failures after the initial warranty ran out, and then – right about the time when the equipment failure rate dropped from "breathtaking" to simply "profound" (i.e., typical of the long-run average for boats in salt water) – he ran out of money or energy and decided to sell out. To you. A two-year old, almost-fully-debugged, looks-like-new, still has some years on the hull warranty, well-maintained yacht. At 70% of what he paid. Take just a fraction of the money you saved, and put it into a full-time, ongoing preventative maintenance program, and you will be a happy sailor. For years. Until your mind gets weak and you buy a factory-new boat.
At any rate, smoking our own dope, we started looking for a used 506 on the West Coast, but there weren't any. There were a half dozen boats with the right configuration in the East, but they were out of the question. The 506's superstructure is so tall – with that enclosed hardshell bridge – that the boat literally has to be sawed apart – splitting the superstructure away from the hull – to get it on a truck. The shipping and reassembly costs notwithstanding, we were told that such bifurcated boats were "never the same again", and that they leaked (not so that would be particularly conspicuous on this model...) The other alternatives: her own bottom through the Panama Canal, or shipping her on a freighter, all were $50,000 – and time-consuming – options.
But our broker – the world's best yacht broker in my opinion, Dennis Moran of Ardell Yacht and Ship Brokers – couldn't be daunted. He discovered that lurking up in Vancouver, British Columbia, at the local Carver dealer, was a new 506 that the dealer – Blackfish Marine – had had in inventory for nearly two years. New, as in never been owned, and being sold with the full factory warranty. But with a "past."
Apparently, the 506 had been purchased by a dot-commer or some such, right before the bottom dropped out, and although some expensive and useful options had been added by the dealer to the yacht in buyer's behalf, the deal stagnated for two years, waiting for final payment. Dennis told them that he had an immediate buyer, albeit one who would only pay the fully depreciated used boat price, and that they needed to fish or cut bait.
It was a measure of how expensive this boat had become for the dealer that they took our deal. Not only were they selling the boat at about 30% below its original price, but they had to pay a commission to an outside broker, as well. And, they had been "flooring" the boat with two years of interest payments.
Finally, to add insult to injury, when Blackfish learned from us that in approximately six months – after the yacht was fully commissioned and shaken down – we indended to move it to Southern California, they were committed – under Carver's strict policy for its regional dealers – to send an obscene sum of money to Bayport Yacht Sales, the Carver dealer in Newport Beach, California. We weren't moving to Newport Beach, but it was Bayport's territory. I later learned that Blackfish paid Bayport, in cash, well over $25,000.
Apparently, this policy – which reportedly remains in effect the first 12 months of ownership – is to prevent dealers from selling "out of market". Also, I was told (but couldn't confirm) that Carver makes its dealers underwrite a portion of a new boat's warranty repair costs. So, such payments to a dealer (i.e., Bayport) that did not profit from the original sale of the boat but ended up maintaining it during warranty were, if not officially, then at least pragmatically compensatory. At least that's the theory. In our case, Bayport won the lottery, and Blackfish took it in the shorts. But that's another story (see: I'd Treat You Like God).
It all worked out for us, however, particularly as Blackfish Marine – characteristic of other Canadian companies and individuals that we have worked with – continued to sink time and money into making this yacht as perfect and trouble-free as possible, before we formally signed the acceptance paperwork, for nearly 3 months after we had purchased it. We ended up with a new boat, with a full factory warranty, at the fully-depreciated, used boat price. The only thing we gave up was having that other schmuck debug the boat for us. But if he had, you wouldn't have this blog to read. I was the schmuck. So I guess we took it in the shorts, as well. At least, a little...
What delayed us was that we were philosophically unwilling to purchase a new 506 yacht from a dealer. It had to be used, one or two years old, but no more, purchased through a broker. And, it had to have the "all-weather" options of a fully-enclosed, hardshell bridge, and a fully-enclosed aft deck. The latter, particularly, adds to giving this 52-foot yacht the accommodations of a 65-foot yacht, or better.
Now, many of you might have done a double-take at our new-yacht philosophy a few sentences ago. So, let me rant for a few paragraphs on buying new boats.
It's crazy. If you can see yourself taking a couple hundred thousand dollars, tying them in a canvas bag with a 65-pound Fortress anchor, and dropping the lot over the side into the Marianas trench, then be my guest. Because that is, in effect, what you have done the instant you sign the acceptance paperwork on a factory-new yacht of this size, and in 1.7 picoseconds it goes from "new" to "used." Some people call it depreciation; I call it "evaporation" – evaporation of your money.
Now the dealer will try to convince you of all the advantages of owning a new boat, but the only one that I can see – and I've been buying boats for 35 years – is that new-boat warranty. Such an advantage. What would you say if you were buying a recent, used boat, and the broker said, "...and we can provide a full parts and labor guarantee for one year (or whatever), for only two hundred and fifty thousand dollars!" Right. Where do I sign?
No, the trick is to find a boat where some other poor schmuck has already taken the big depreciation hit, found all the bugs, and battled with the dealer to get them fixed, on his time, not yours (or mine). If you're lucky, this guy sank additional (big) money into the few dozen remaining infant mortality-type failures after the initial warranty ran out, and then – right about the time when the equipment failure rate dropped from "breathtaking" to simply "profound" (i.e., typical of the long-run average for boats in salt water) – he ran out of money or energy and decided to sell out. To you. A two-year old, almost-fully-debugged, looks-like-new, still has some years on the hull warranty, well-maintained yacht. At 70% of what he paid. Take just a fraction of the money you saved, and put it into a full-time, ongoing preventative maintenance program, and you will be a happy sailor. For years. Until your mind gets weak and you buy a factory-new boat.
At any rate, smoking our own dope, we started looking for a used 506 on the West Coast, but there weren't any. There were a half dozen boats with the right configuration in the East, but they were out of the question. The 506's superstructure is so tall – with that enclosed hardshell bridge – that the boat literally has to be sawed apart – splitting the superstructure away from the hull – to get it on a truck. The shipping and reassembly costs notwithstanding, we were told that such bifurcated boats were "never the same again", and that they leaked (not so that would be particularly conspicuous on this model...) The other alternatives: her own bottom through the Panama Canal, or shipping her on a freighter, all were $50,000 – and time-consuming – options.
But our broker – the world's best yacht broker in my opinion, Dennis Moran of Ardell Yacht and Ship Brokers – couldn't be daunted. He discovered that lurking up in Vancouver, British Columbia, at the local Carver dealer, was a new 506 that the dealer – Blackfish Marine – had had in inventory for nearly two years. New, as in never been owned, and being sold with the full factory warranty. But with a "past."
Apparently, the 506 had been purchased by a dot-commer or some such, right before the bottom dropped out, and although some expensive and useful options had been added by the dealer to the yacht in buyer's behalf, the deal stagnated for two years, waiting for final payment. Dennis told them that he had an immediate buyer, albeit one who would only pay the fully depreciated used boat price, and that they needed to fish or cut bait.
It was a measure of how expensive this boat had become for the dealer that they took our deal. Not only were they selling the boat at about 30% below its original price, but they had to pay a commission to an outside broker, as well. And, they had been "flooring" the boat with two years of interest payments.
Finally, to add insult to injury, when Blackfish learned from us that in approximately six months – after the yacht was fully commissioned and shaken down – we indended to move it to Southern California, they were committed – under Carver's strict policy for its regional dealers – to send an obscene sum of money to Bayport Yacht Sales, the Carver dealer in Newport Beach, California. We weren't moving to Newport Beach, but it was Bayport's territory. I later learned that Blackfish paid Bayport, in cash, well over $25,000.
Apparently, this policy – which reportedly remains in effect the first 12 months of ownership – is to prevent dealers from selling "out of market". Also, I was told (but couldn't confirm) that Carver makes its dealers underwrite a portion of a new boat's warranty repair costs. So, such payments to a dealer (i.e., Bayport) that did not profit from the original sale of the boat but ended up maintaining it during warranty were, if not officially, then at least pragmatically compensatory. At least that's the theory. In our case, Bayport won the lottery, and Blackfish took it in the shorts. But that's another story (see: I'd Treat You Like God).
It all worked out for us, however, particularly as Blackfish Marine – characteristic of other Canadian companies and individuals that we have worked with – continued to sink time and money into making this yacht as perfect and trouble-free as possible, before we formally signed the acceptance paperwork, for nearly 3 months after we had purchased it. We ended up with a new boat, with a full factory warranty, at the fully-depreciated, used boat price. The only thing we gave up was having that other schmuck debug the boat for us. But if he had, you wouldn't have this blog to read. I was the schmuck. So I guess we took it in the shorts, as well. At least, a little...
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