So the time has come—you’re finally ready to pull the trigger and purchase that big, beautiful catamaran you’ve had your eyes on, cast off the lines and head over the horizon. Only problem is that big beautiful catamaran, brand new, has a price tag that makes your heart skip a beat and means you’ll be sending your kids to Hollywood Upstairs Medical College. If you’re looking to get the most boat you can for the least damage to your wallet, maybe it’s time you took a look at buying a catamaran that’s coming out of a charter fleet.
Now I know what you’re thinking: charter boats have been banged up and beaten, run hard and put away wet. This is the general feeling folks have about vessels exiting a charter fleet. “A lot of people avoid charter boats because they think they’re going to be garbage,” says Phil Berman, president of The Multihull Company. “A charter boat instantly has the scarlet letter—but that’s not always the case.” Much like buying a used car, there are gems and there are lemons, you just have to do your research.
“Step number one, and a lot of buyers forget this, is that every boat has a value regardless of its condition,” Berman says. “So whether a boat is upside down on top of a reef or brand new, it has some value. A charter boat is generally going to be worth less than a pristine boat that was privately owned and cared for. The trick is to establish the value of any boat in the condition that it’s in.”
There are two tools available to every prospective buyer when determining the value of a used boat—a quality surveyor and an experienced broker—and it is no different when that boat is coming out of a charter fleet. But while a surveyor can tell you what’s wrong with the boat, and what needs to be fixed and repaired, if you are relatively new to the boat-buying world, having a broker will help you understand what the boat is really worth. “A surveyor is not the person to look to when you want to know what the boat is really worth,” says Berman. “They’re not in the market on a daily basis like a broker. Sometimes a surveyor will put a number on a boat that is lower than its value simply because he doesn’t know.”
Also remember that determining the value of a boat and whether or not you’re getting a good deal doesn’t always reflect what it needs to have done to it. If a boat comes out of a survey and needs 10 things fixed, a few of which are important, so long as the boat is priced to reflect what needs to be fixed that boat might very well be a good deal. “What we see happen a lot is a buyer will get a boat surveyed and think ‘Oh it needs too much,’ and they won’t buy it,” Berman says. If one boat costs $400,000 and another costs $350,000, knowing what kind of work the less expensive boat needs done to it (say, $30,000 worth of repairs), may actually make it the better choice.
Another thing to take into consideration when looking at buying a catamaran out of a charter fleet is how much the boat has depreciated. Roughly speaking, the price of a catamaran that has been in charter service for 4 to 5 years will have depreciated approximately 40 percent. This of course varies on a case-by-case basis. A catamaran that has been meticulously maintained and never been in an accident will hold its value better than one that was wrecked and repaired. However, most catamarans will not depreciate to less than 60 percent of their replacement value, so at some point you need to take into consideration what the cost of buying the boat is relative to the cost of keeping it running. “As depreciation decreases, care and feeding increases,” Berman notes. “A boat that is 8 years old is probably not depreciating at all anymore on a yearly basis, but it is costing you more to keep it running nicely.”
All kinds of factors can lead to a vessel’s depreciation—currency fluctuation, demand for a certain model or lack there of, options that have been added, such as electronics and cruising gear—but perhaps the number one factor is vessel maintenance. Another common misconception about catamarans coming out of charter service is that they have not been well maintained, and while in some cases this is true (and can be true when buying a vessel from a private owner as well) it is more the exception than the rule. “The industry has changed,” says Michel Benarrosh, a yacht broker and the owner of sailonline.com, a resource for charter yacht ownership. “More now than in the past most every company gives boats reasonably good maintenance. A boat that is not well maintained costs a lot of money to the company every time there is a problem.”
Yes, as a rule of thumb a catamaran bought out of a charter fleet will have a few more issues than one bought from a private owner, but many of these are not major, like cracks in the hull or a damaged rig. “Generally speaking they’re always in worse cosmetic condition than a new boat,” says Berman. “The woodwork has a few more scratches and chips, the hulls might have a few dings.” But again, you have to think about the value of the boat. If it is priced correctly, fixing some scratches on the hull or a few gouges in the cockpit sole shouldn’t be a deal breaker.
You also have to take a look at the health of the boat’s engines—a charter cat might rack up anywhere from 800 to 1,000 engine hours a year, whereas a private vessel might have only put on 100 to 400 engine hours. “Engines and gensets are sometimes an issue, but not as much as one would think,” says Benarrosh. “The engines on charter boats are specifically selected for their reliability and longevity. Even after 5 years of charter work they still have a reasonable life expectancy.” Also, engine use on charter boats has decreased over the years as boats have started carrying alternative power sources to keep things like the AC and the refrigerator running. “In the past while on charter engines were driving the boats and running at least two hours a day at anchor to charge the refrigeration systems and the batteries,” says Benarrosh. “Nowadays most new charter cats over 40ft are equipped with a genset and solar panels, which considerably alleviates the engines’ workload.”
Just as you’re better off buying a used car from a reputable dealer than you are buying one from Jim and Bob’s Used Cars, Petting Zoo and Rattlesnake Farm, chances are you’re going to have a better experience buying an ex-charter cat from a premier fleet, and one major reason is the “phase-out” process. When buying an ex-charter cat from a company such as The Moorings or Dream Yacht Charter, before that boat makes its way to you, the vessel is evaluated by the company and reviewed by a surveyor. Any major issues, be they mechanical or cosmetic, are addressed before the boat is sold. This is definitely something you want if you are buying an ex-charter cat. “With boats coming out of charter companies that are not being phased out, somebody is simply getting the boat surveyed and buying the boat,” says Berman. “The issue is that after the survey, the seller isn’t under any obligation to do a single thing. At least with a phase-out situation there is some obligation on the part of the company to do something on behalf of the seller.”
Benarrosh agrees. “A prospective buyer should look at a boat that has just been phased out,” he says. “Additionally, a buyer should look for a boat that has no accident history.”
Like many major purchases—be it a house, a car or a catamaran out of a charter fleet—there are many variables that a prospective buyer has to take into consideration. The key thing to remember is to use the resources available to you. Talk to a broker, talk to the charter fleets, work with a quality surveyor, research the boat, its history and its maintenance schedule. In the end, you may just end up finding the boat you’ve been dreaming of at a price that you can live with.
Read, Firsthand Experience: Buying an Ex-Charter Cat, here.
For more Multihull Sailor, click here.
MHS Summer 2015