There have been some big changes in the financial world over the last 6 months. The impacts are affecting you in many ways from the toys you buy, your groceries, and your trips and transportation, etc. When it comes to boating, the primarily ones that could make a difference for you are:
- The price of oil (gasoline, diesel, plastics, etc) has dropped dramatically! This is great news for boaters getting to the boat/cottage, and using it this coming summer.
- The cost or borrowing (interest rates) are steady or dropping. If your loan is up for renewal, or you are thinking about buying a new boat or used boat, this is going to help your cost of ownership.
- A strong US $ (and weak Canadian dollar). This will ultimately make boats (almost all boats) more expensive to purchase initially. More details on this below.
The first two are all positive when it comes to boating and almost any other activity. The last one has a negative effect primarily. Here are the four main ways that the Canadian / US exchange rate is changing boat prices:
1) New Boat prices are directly correlated to the current exchange rate and have recelntly gone up.
Almost all the boats that we use in Canada are built in the United States.Even the ones that aren't have a significant portion of their components built there, and they will be pricing their boats relative to US boats to maximize how the market is impacted. When a boat is sold to a dealer in Canada, that dealer has to "buy" US Dollars (now or in the future) to pay for the boat. There is no way around that. They either do it at the time the boat crosses the border (now), or leave it in US Funds till a buyer (you) is found for the boat (future).
2) Even last year's "non-current" (2013, 2014, etc.) boats are impacted.
Many of the boats are left in US Dollars as indicated above. Even the ones that were converted earlier, will "become more valuable" due to the increase in the 2015 boat prices. Dealers will almost definitely increase the price they charge for them.
3) What about used boat pricing? Same story as above.
Why is that? Well, if the price of the "replacement" boat went up, people are willing to pay more for the used version as it becomes more price attractive (relative to new). Sellers of used boats are going to be able to get more for those boats due to the increase in price in the new ones.
4) Will my trade be worth more?
Yes, you should be able to demand more for your trade in times of a higher US/CDN exchange rate. It won't make up for all the difference; it will partially bridge the gap.
Although the price of a new boat price has risen for 2015, it has been partially offset by the lower cost of ownership (fuel prices, interest rates) and if you have a trade, the increased value. The real risk of waiting is that it MAY go up further.
Life as they say, is short. If you can afford the amazing value that is time on the water with yourself, friends, and family, don't get stuck with purchase fear. You have worked hard, and it will all wash out in the end eventually. Just make sure you are informed going in and look for an honest dealer to help you with your purchase.