Boat sales are down, and watercraft repossessions are on the rise because of difficult economic times in Michigan and across the country. But dealers say affordable prices are available on a wide range of boats, from small, used watercrafts to new yachts. Inventory left over from the past two years has helped create the deals.
John Miller went to the recent Spring Boating Expo at Rock Financial Showplace searching for a deal on a 21-foot Lund fishing boat. He's been looking for about a year and hopes to wrangle a deal on the $30,000 vessel.
"I'm on a fixed income, so I won't go out on a limb," the-68-year-old Royal Oak resident said. "I'm willing to pay $15,000 to $20,000 in cash so I don't have to worry about having to make payments in this economy. If I can't find someone to come down in price, I'll have to start looking for something used."
Greg Krueger, president of Jefferson Beach Yacht Sales, said the historic deals will be available for a limited time.
"Once those boats are gone and the inventories are fleshed out, the deals won't be there," he said.
The St. Clair Shores-based company and other dealers are selling boats below invoice. A new 56-foot Viking Yacht retailing at $2.5 million could sell at $1.9 million in today's market, he said.
In December 2008, the Providence R.I --based Textron Financial Corp. announced plans to bail on boat financing, making lending a little tighter. However, customers with sound credit are still being financed, but more people are paying with cash to avoid loan repayments, Krueger said.
Rob Davis of Club Royale Marina Sales and Services in Waterford Township remains optimistic about sales. Foot traffic in his store is up about 20 percent because of the "incredible deals" being offered in the industry, he said.
"We're getting about 10 to 15 customers a day and we usually don't see that in the winter," said Davis, who braced for a decline in sales by cutting his staff in half last year. He also has reduced his product line from six to three since 2008, so he's not stuck with boats he can't unload. Sales were up a record $600,000 in 2008 over the previous year, which Davis said he doesn't anticipate for 2009.
"Manufacturers have stepped up with more aggressive prices in this economy, because they know people still have a passion for recreational boating," he said.
Boating is roughly a $3.9 billion industry in Michigan that employs more than 51,000 people, according to the Michigan Boating Industries Association. Carol and Lyle Jones of Brighton purchased their first watercraft, a used 24-foot pontoon boat, in January from a marina for $8,000. It was marked down by $1,000.
"We've lived near a lake for about 13 years and always wanted one," Lyle Jones said while looking at accessory items at the boat show in Novi. "We knew we could probably get a deal these days, so it came down to a financial decision. If we couldn't afford it, we would have left it there, because you have to have enough money left over to enjoy a beer on your boat."
A deal could almost be found everywhere consumers looked during the expo last month. An 18-foot bow rider was listed at $10,999 -- the same price as the 17-foot models. And a 2008 Sun Tracker pontoon was on clearance for $13,999, a savings of $2,681 over the 2009 models.
Still, the industry has taken a hit.
Gradually, Michigan has dropped from the top spot in boat registrations in the country to fourth with 931,000, behind Florida, California and Wisconsin, said Van Snider, president of the boating association.
Four years ago, the state had more than 1 million registered boats.
"Sales have probably declined at least 20 percent. But it's not a surprise, because boating is a discretionary expenditure and people are facing economic challenges," added Snider, who is also the manager of boat shows at Cobo Center and Rock Financial, where attendance was down 22.9 percent and 13 percent respectively from 2008.
Some boat owners face having their boats repossessed and auctioned for less than they're worth. A repossessed 50-foot boat valued around $250,000 in average condition could easily be sold for roughly $180,000, said Larry McClelland, a repossession investigator for Harrison Marine Inc.
The Harrison Township company, which specializes in watercraft repossession, has seen at least a 30 percent spike in repos since this time last year.
The most noticeable difference is that staff are repossessing more large-scale boats, ranging from 30-foot to 60-foot vessels, in addition to the smaller crafts they have focused on in years past.
"We're seeing a different tax bracket now since more guys with the six-figure salaries have started to take a hit in the last 8 to 12 months, losing their jobs," McClelland said.