Pontoon boats decrease in value right after purchase. For the first three years, the depreciation of these boats can be as high as 20%. Pontoon boats generally do not hold their value very well, though, the price plateaus after 10 years.
But you need to understand that there are other factors to consider when buying a pontoon boat. You should know how much it depreciates, how to calculate its depreciation, which pontoon boats hold their value the best, how much it resells, and what affects its resale prices. Read more to help in your decision in your pontoon boat purchase.
How Much Do Pontoon Boats Depreciate?
You should not treat a pontoon boat like your typical car in computing for the depreciation. Cars are used all year round while pontoon boats are mostly utilized during the summer months, which are only a few months in a year. Because of this reason, their engines and major parts are also used less compared to cars.
Knowing about the depreciation of the pontoon boat can help you in determining its price point per year.
Here is a rough estimate of the depreciation of a pontoon boat:
- Year 1 to 3: 20% per year
- Year 4 to 10: 6% per year
- Year 11 onwards: Around $100 per foot
Maintenance is always key to retaining the value of a pontoon boat. Not doing your part in the repairs and preservation of your boat may increase its depreciation over the years. Before moving to the actual calculation of the depreciation of a pontoon boat, here are some tips that you can do to keep a high resale value of a pontoon boat:
1. Regular cleaning
Clean the pontoon boat whether it is being used or not.
Perform early repairs to prevent any worsening of problems. This includes its interior and exterior parts as well as the engine.
Repaint areas of the pontoon boat which have noticeable paint chips.
Use a high-quality cover made of heavy-duty waterproof material to cover the whole boat.
If you are going to buy a new pontoon boat, you may opt to get an extended warranty. Make sure to read the fine print before signing anything. Be prepared with your questions to know what you will be getting with your extended warranty.
How Do You Calculate Depreciation on a Pontoon Boat?
Depreciation is a term that you hear from pontoon boat owners in various forums. It is an accounting method used to calculate the cost of the asset over its useful life. People use the depreciation value of a pontoon boat to know the price of this asset over time.
Pontoon boat owners reach a point where they have to decide on whether to sell or not keep the asset. It all boils down to which option would be better in the long run.
You have to understand that depreciation is just one aspect of your decision in your pontoon boat purchase. Maintenance of the boat also affects the resale value of the boat. The existing market can also be a major factor in its price.
A simple approach that you can use to calculate the depreciation on a pontoon boat is the straight-line method. To compute the depreciation value of the pontoon boat over its lifetime, you first get the estimated useful life of the boat.
For example, the useful life of the pontoon boat is 10 years. Its original price is $20,000 and you will resell it for $5,000 at the end of its useful life. In this example, the depreciable base is $15,000. You can get this by subtracting the reselling price from the original price.
You will then divide the depreciable base by the useful life to get the yearly depreciation. In the example, $15,000 divided by 10 years is equal to $1,500 per year.
Another way of finding the depreciation is by using the Declining Balance Method. In this method, you need a depreciation rate, say, 10%. Assuming zero residual value at the end of ten years, you need to multiply 10% by the current value, that is, $15,000 times 10%.
The depreciation is $1,500 in year 1. To find the value of the pontoon boat in year 1, you need to subtract the depreciation value from the current price. In year 1, the value of the pontoon boat is $13,500. You will do the same for the rest of its useful life. See the table for a sample computation:
|Year||Depreciation Calculation||Depreciation||Value at the end of the year|
|1||10% x $15000||$1,500||$13,500|
|2||10% x $13,500||$1,350||$12,150|
|3||10% x $12,150||$1,215||$10,935|
|4||10% x $10,935||$1,093.50||$9,841.50|
|5||10% x 9,841.50||$984.15||$8,857.35|
What Pontoon Boats Hold Their Value the Best?
Listed below are pontoon boat brands that hold their value the best:
1. Sun Tracker
Sun Tracker is a brand that anglers and families seriously consider for their pontoon boat purchases. It is known for its 10-year bow-to-stern warranty, structural & deck coverage, transfer to secondary owner provision, and no pro-rating features throughout its warranty period. popular.
2. Avalon Pontoons
Avalon Pontoons is a manufacturer of luxury pontoons. Being in the business for more than forty years, Avalon Pontoons has gathered a lot of experience in producing quality boats that last a very long time.
Another popular brand is the Bennington Marine Pontoon Boats. The company offers affordable and luxurious boats among its line-up of products. The brand is known for its premium furniture and fully-welded aluminum construction on its boats.
Do Pontoon Boats Have Good Resale Value?
Just like any other tangible asset, pontoon boats go down in value over time. Compared to other motor vehicles, a pontoon boat have a good resale value. But you still need to consider a lot of factors like the size of the boat, its engine, and other upgrades which can give more value to the boat.
Take note, though, that realistically, pontoon boats have a larger depreciation value in the first two to three years. But it eventually dwindles over time.
What Affects Resale Prices?
Pontoon boats readily decrease in value the moment you purchase the vehicle. If you have any intentions of selling your boat, here are things that you need to consider:
1. Current market
You may be surprised about the limited supply of used pontoon boats in the market. This can be a hassle for those looking for a used pontoon boat but it is a good opportunity for sellers. Having limited options for buyers allows pontoon boat owners to sell at higher rates.
2. Size of engine
The size of the engine affects the resale price of the pontoon boat. A bigger engine is more attractive to used pontoon boat buyers.
A used pontoon boat with a good record of maintenance also plays a vital part in the resale of the unit. If the pontoon boat is well-maintained, one can keep the depreciation value of the unit to a minimum.
4. Boat brand
The brand is still a factor when it comes to reselling pontoon boats. Because of brand perception, some have higher resale values while some of the less popular ones have lower prices.
5. Added features of the boat
Unique features of the boat may increase the resale price of the unit. Upgraded furniture, flooring, and exterior can help in adding value to the pontoon boat.
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