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Last Updated on June 10, 2024 by Paul Clayton
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Repo Boats-How to Get a Deal and Not Be Ripped Off
Purchasing repo boats can be an excellent way to secure a high-quality vessel at a fraction of its original cost. However, it’s essential to approach this market cautiously to avoid potential pitfalls.
Key Takeaway
Buying repo boats can be a great way to find a high-quality vessel at a lower price, but caution is required to avoid potential problems.
Summary
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- Repo boats are seized from owners who defaulted on loans and resold by banks or lenders.
- Advantages of buying repo boats: significantly cheaper than new boats, potentially high quality.
- Disadvantages of buying repo boats:
- There is no history or warranty on the boat.
- It may have been neglected or damaged by the previous owner.
- Potential for hidden problems due to lack of service history.
- Things to consider before buying repo boats:
- The market value of the desired boat
- Reputation of the seller
- Thorough boat inspection
- Auction terms and conditions
- Repair, maintenance, and transportation costs
- Clear title and necessary documentation
- Tips for getting a good deal and avoiding being ripped off:
- Assess the condition of the boat thoroughly.
- Act quickly because repo boats sell fast.
- Find out the appraised value of the boat.
- Be prepared to clean the boat.
- Request a survey and sea trial if possible.
- Consider financing options for buying a repo boat.
When boat owners default on loans, the bank contracts with repo companies to recover the money. The repo firms sell the boats to recover their cash, and if you act fast, you can get excellent deals on repo boats.
With a good gambler’s instincts and some repair skills, you can get a good deal on a boat that will accompany you for years. However, one big potential downside to this game is that you don’t get any history or warranty of the boat at auction.
So, how do you get a good repo boat deal without being ripped off? In this post, I will share everything you need to know about repo boats before buying one.
What is a Repo Boat?
If you want to escape the humdrum and reward yourself with a boat, nothing can stop you from getting the best boat out there—especially not a limited budget. While you don’t have to spend a fortune on a boat, it doesn’t mean you should settle for low quality.
When people consider buying a boat, they often look past repo boats. These are usually cheaper and better quality than the new low-priced ones. That means you can set your sails without putting a dent in your wallet or getting tricked.
A repossessed boat up for sale is often one that a bank has seized when the owner fails to pay back the loan. A different lender might seize boats when the owners cannot meet their financial commitments.
These owners default, and the bank or lender takes the boat and resells it to reclaim their loan money.
One significant flaw of these boats is that they have no history and no warranty when bought at auction. With no historical record, you never know what you are getting.
Risks of Buying Repo Boats
Even though getting an excellent repo boat deal is not impossible, a few potential downsides to these boats need to be considered.
Some are seized due to illegal activities such as smuggling, or the owner might not be paying his taxes. Since there are no historical records, you never know what your boat has gone through.
Another factor is the owner’s lack of responsibility, who probably would have neglected the boat’s maintenance. Hence, the ship’s physical condition has most likely declined over time.
Depending on the company you’re buying from, you may also miss the chance of a sea trial. Due to these reasons and the lack of warranty after purchase, repo boats’ potential value declines, and dealers sell them at low prices.
If you get lucky, you might get the original boat manufacturer’s warranty, which is still applicable. This warranty won’t cover damages but might cover defects in the engine or electronics.
Without this warranty, you are signing up for unknown problems, but it might be rewarding if no problems exist.
Things to Consider Before Buying Repo Boats
When you are looking for a repo boat, there are a few things you need to keep in mind.
Repo Boat Deals Go Quickly
By buying a repo boat, you might be able to afford a late model at a surprisingly low price. But you will have to be quick because these boats don’t stay on the market for long.
People constantly seek the best deals, so the lowest-priced boats sell quickly. The banks also want to recover whatever loss they can, so they price their boats with the lowest price tags.
If you act quickly and smartly, you can find a boat that is in good condition and within your budget. Taking too long to decide on a boat can mean missing out on a deal that you might not be able to get for a while.
Also, prepare to travel for bank-owned boat deals. It’ll be worth it after you save hundreds of dollars on your purchase.
Negotiating Price on a Repossessed Boat
You might think that a boat listed by a bank is more open to negotiation, but that’s not always true. You will have to find out how low a bank is willing to drop the price to remove the boat from its books.
A good way to find out is by making a low-price bid on the post, which will give you an idea of how much you can negotiate further. Some relations with a dealer might hint at the lowest price the bank is willing to sell the boat for.
The boat appraisal guide (BUC) will also be helpful during the negotiations. The bank likely knows the appraised value and is considering it to price the boat.
Plus, they will have a fair chance to sell the boat below its resale value and relieve themselves of the burden.
Quality of Repossessed Boat
Getting a repo boat deal doesn’t mean you have to compromise on quality or condition. Many repo boats are as good quality as any other boat in the market. They mostly need a bit of cleaning before they are all set.
Since the boat owner was not prepared to sell it soon, the condition of the boat varies in each case. The owner’s irresponsibility regarding financial payment might also hint at a lack of focus on the vessel’s maintenance.
Due to these issues, you must inspect carefully before purchasing, especially the engine.
The problem arises when some banks don’t allow a sea trial when you are purchasing a repo boat. This way, you are not entirely sure if the boat will be able to survive the waters.
So, make sure your purchase agreement includes a pre-survey of the boat to ensure a fair deal that will benefit you.
Condition of Repossessed Boats
Often, the dealers of repo boats at auctions don’t know the boat’s history better than the buyer, which is why they have fewer reasons to justify their high price tag.
They give you a warranty in this case, but if it lasts only 30 days, it won’t be useful. So, go for a boat with a 12-month warranty on the main parts.
Furthermore, many repo boats have missing electronic parts, outboard motors, and other out-of-sight components.
Therefore if a boat has all its features intact and all it needs is a little touch-up, you have found yourself a gem of a boat. Scrubbing, waxing, and new upholstery will reveal your excellent findings.
Regarding larger cruisers, you must focus more on the vessel’s reliability with fully functional systems.
Then, you can move on to other upgrades and add new electronics to finish off your masterpiece. As long as it’s reliable, a larger boat might be a better choice for many.
Fixing and Repairing Repo Boats
If you are buying a repo boat that was stolen and stripped of its parts, you will have to consider the cost of restoring it to its original state.
Repo boats often come without electronic components such as GPS units, stereos, VHF radios, fish finders, sensors, etc., and outboard motors.
If you see a boat without these electronics, you are looking at a repair job that will cost you a fair amount of money. The body repairs will also cost you time and effort to match the external surfaces correctly.
Even though these fixes require time and money, you can still do them if you have the skills and tools. A high-performance boat will likely have experienced more abuse, and you will need a high level of skill to repair its damages.
Alternatively, you could choose a slightly higher-priced, undamaged, or slightly damaged model that doesn’t require many repairs.
Where to Find Repo Boats For Sale
Not sure where to get started? Here’s where to find them.
Finding Repo Boats for Sale
You will find various repo boat deals online or in person at auctions. Online sites such as Yachtworld and Boattrader have online dealer listings and other used ones. There are also sites specifically for repo dealers like National Liquidators.
It is a good idea to search for auctions in your area and connect with boat brokers to learn about the boats in the market ahead of time. You will find all kinds of boats in auctions, ranging from small marine boats to yachts and even pontoon boats.
But before you start looking for auctions, first try to decide which type of boat you want so you can scroll through your options faster. It will also be more convenient if you have a set budget in mind.
You won’t have much trouble finding a boat that fits your budget, as there are boats for nearly every budget. However, don’t get too excited about the first boat you see; make sure you have done enough research before purchasing.
The best online boat repossession auctions are here:
- National Liquidators is the world’s largest boat liquidation company, with offices in Cleveland, Ohio, Fort Lauderdale, Florida, and Capistrano Beach, California. Here, you will find repo boats, bank repossession boats, foreclosures, and government-seized boats.
- eBay Boats – the site where the highest bid wins from a fine selection of clean repo sailboats, open boats, PWCs, etc.
- ADESA – a service that buys and sells used vehicles and locates auctions around you.
Repo Boats from the Bank
You can purchase repo boats through banks and lenders willing to sell at lower prices. They want to relieve the burden of the boat, which is why you can get a great deal on them.
The band can provide financing if you need it, and good credit card scores can also lead to lower prices.
Tips On How to Get a Deal And Not Be Ripped Off
Here are four tips to get the best repo boat deal without getting cheated on by the dealers.
Assess the Condition
When owners find that they are about to lose the boat, they stop caring for it, which is why it could have interior and exterior damage. A rough repo boat might also require exterior touches and engine work.
You will save money on the boat, which you can use to make these repairs. You can buy the boat at a lower price and use the rest of your budget on maintenance.
One way to avoid risks is to research your desired boat type on the auction site and read everything. Please read on the external and internal problems and search for what you need to fix them.
You can also get a professional estimate of the repairs to get an idea of the final cost.
Step back and start your hunt again if the final amount falls outside your budget. Besides, going into debt to buy a repo boat makes little sense.
Take Fast Actions – Repo Boats Don’t Stay For Long
As repo boats are listed at competitively lower prices, they don’t stay in the market for too long. As shoppers actively search listings, you might see a boat listing today, which will disappear in a few days.
You might know how competitive repo boats are, so don’t be surprised if the boat you like has more than one bid on it. These bids will increase the cost of the boat, which is precisely why you want to act fast when you have found the one you like.
Nonetheless, even if you miss a deal or lose the bid to someone, don’t lose hope. You will have plenty of opportunities to get the best repo boat deal.
Find Out What the Boat Is Appraised At
When a bank lists a repo boat, shoppers think they have plenty of room for negotiation. However, that is not always the case, and it’s hard to determine how low a bank is willing to go.
So, before making a bid, check out the boat appraisal guide to get an idea. Lenders usually use these guides to price their boats.
Get Ready With Your Cleaning Supplies
You will find many repo boats that are decent in condition. Usually, they need good cleaning because the owners stopped maintaining them before repossession.
It also means the boat might need minor repairs as it might not have received maintenance in a while.
Request a Survey and Sea Trial
It is strongly recommended that you inspect the boat before placing a bid. You should conduct a pre-purchase survey of the whole boat to ensure it is worth putting in the water.
Never buy a boat without a survey; otherwise, the deal can be a huge failure. If you discover major hull damage or have to replace the engine, it will cost you more than the boat is worth.
If the boat has a diesel engine, thoroughly check it or get it checked by a professional. This will ensure that you buy a decent boat and not just problems that will cost you unexpectedly.
Boat Loans When Buying Repossessed Boat
Getting a boat loan from the bank should be easy as long as the loan does not exceed the cost of the boat. Moreover, getting the loan approved can be even easier when you find a good deal at a low price.
Good credit and more money for a down payment will lead to a better interest rate. Although getting a loan for more than 12 to 15 years on an old boat can be harder, this is typical of all boat loan plans.
It might be tricky to get a loan from the same bank that owns the boat for which you want the loan. The bank might offer you a good interest rate, but it will most likely be very strict with the loan requirements.
That is because the bank won’t want to risk another boat owner defaulting on the same repo boat, which is understandable.
Frequently Asked Questions
What are the key indicators that a repo boat has been adequately maintained?
Before purchasing a repo boat, check the maintenance records, if available. Look for signs of regular servicing, such as oil changes and system checks. Inspect the hull for damage, the engine for corrosion, and the interior for mold.
A well-documented maintenance history can indicate the boat was cared for properly.
How can I verify the legality of the boat’s repossession?
Ensure the repo boat’s title is clear by requesting a lien release document from the lender. Verify the seller’s authorization to sell by checking with local maritime authorities.
Confirm the boat’s history using the Hull Identification Number (HIN) to avoid purchasing a boat that was illegally repossessed or has unresolved legal issues.
What should I consider about the boat’s location and storage conditions?
Inspect the storage conditions where the repo boat was kept. Boats stored in harsh environments may have more wear and tear.
Consider the impact of prolonged exposure to sun, saltwater, or freezing temperatures on the boat’s components. Well-stored boats often show fewer signs of weather-related damage and require less immediate repair.
How can I accurately estimate the repair costs for a repo boat?
Hire a marine surveyor to assess the boat’s condition and identify necessary repairs. Obtain detailed repair estimates from trusted marine service providers.
Compare these estimates with the boat’s purchase price to ensure the total cost is still a good deal—factor in potential hidden issues that might arise during repairs.
Wrapping Up
Securing a good deal on repo boats without pitfalls requires comprehensive due diligence. First, understanding the market value of the desired boat is crucial to ensuring a financially sound decision.
Second, always seek out boats through reputable and well-known channels to avoid scams and fraudulent sellers. Conducting a thorough boat inspection before purchase is imperative to identify potential issues that could lead to costly repairs.
Additionally, familiarizing yourself with auction terms and conditions will help you navigate the buying process more effectively.
It is also essential to factor in repairs, maintenance, and transportation costs, as these can significantly impact the overall investment.
Finally, ensuring you receive a clear title and all necessary documentation is vital for legal ownership and future resale purposes. By following these guidelines, you can master acquiring repo boats: how to get a deal and not be ripped off.
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