LATEST TRENDS IN THE BOATING MARKET: BUYING STATESIDE

The past few years have seen an explosion in the number of Canadians purchasing used power boats and sail boats from the States. We outline the benefits and pitfalls that await the Canadian boat buyer who goes shopping in the US market.

The primary driver is the tremendous COST SAVINGS that can be realized by purchasing a used boat stateside. The US pre-owned boat market is 100 times larger than the Canadian market, is far more price competitive and offers a much greater selection of used boats. When this is coupled with the significant strengthening of the Canadian dollar vis-a-vis its US counterpart over the past few years, the total dollar savings even after one fully accounts for freight, taxes and exchange rate differentials and other logistics costs typically exceeds 20%.

An example will help to demonstrate. This example applies to either a new or used boat. Consider the Canadian buyer who purchased a boat a few years ago that cost Cdn $150,000. At the time the CAD/US exchange rate was 1.50. All boats manufactured in the North American market are priced in US dollars at the factory. So what our Canadian buyer really paid was USD $100,000.

Today that same boat at the factory costs the same USD $100,000. However the CAD/US exchange rate is now fluctuating around 1.10, so the same boat today can be purchased for Cdn $110,000 or 26.67% less than the identical boat cost a few years ago. This is a very significant cost savings that should be passed along to the Canadian consumer by the local dealer, but just like in the auto industry, is not being passed along in full, and consumers are recognizing this inequity and bypassing the Canadian market entirely and making their purchases directly in the US market.

The downside to this massive cost realignment is of course for the Canadian buyer who purchased his boat a few years ago when the exchange rate was 1.50. It is a bitter pill to swallow when he finds out a brand new boat can be purchased for less money than his 2 year old used boat, and to add insult to injury, his used boat is worth much less than he thought it would be.

There is a silver lining for buyers who are trading up. The cost savings on the bigger more expensive boat being purchased, will more than offset the exchange losses generated on the smaller boat being sold. .

For any Canadian buyer, the biggest challenges are the logistical issues that must be dealt with when importing any used boat into Canada and most importantly the US based title and lien searches, to ensure you have free and clear title to the vessel. There are numerous critical steps that must be taken to ensure the integrity of the transaction.

FreshWaterBoats offers its customers a complete A to Z service that covers everything from US Title & Lien Searches, US Escrow & Closing Services, US Bank Loan Payoffs & US Lien Release Documentation, US Bill of Sale & Transfer of Title Documentation, Arranging Transportation & Insurance, Canadian Customs Documentation, Canadian Title, Canadian Licensing & Registration and Canadian Taxes Remittance.

Brent has imported many boats, both large and small, power and sail for his Canadian clients. Take a minute to read through the CUSTOMER TESTIMONIALS section to get a better feel for our company.

Background information: FreshWaterBoats is a North American Marine Marketing Company with offices in Toronto, Ontario and Bay City, Michigan offering its customers unparalleled access to professional buying and selling services on both the Canadian and American sides of the Great Lakes. They are widely recognized experts in handling cross- border vessel transactions.