Studies have shown that 80% of boat buying decisions are based on emotions; boating is a very emotional investment. But you don’t want to pay too much for your new boat. The best way to ensure you don’t overpay is to know the true value of the boat. The marine lender and insurance carrier also need to know the true value. Determining the honest and true value of a boat is an important part of a marine survey.
Fair Market Value
At Beacon Marine Services we determine the fair market value of a boat based on current industry figures, the condition of the boat as it is found, it’s location, and the time of year. We utilize two different approaches to help determine an accurate valuation; the sales comparison approach and the cost approach.
The sales comparison approach considers recent sales of boats that are comparable to the boat being evaluated. The standard industry sources for this data are Soldboats.com, BUC, NADA, and Power Boat Guide, as well as our in-house database.
The cost approach to value determination applies depreciation to the price of a new vessel of similar design, quality and similarly equipped. Depreciation can take several forms, but the primary factors are age and physical deterioration.
By following the above procedure, we ensure our valuation data is based on accepted industry practices and hard data, not emotion.
And now for the lawyer language (fine print): Even though the values given in the survey report are based on accepted practices and data, there is still an element of subjectivity involved in their development. For this reason, the values given are still statements of opinion. No guarantee can be given that these values will be sustained or that they will be realized in an actual transaction.