It’s not uncommon for boaters in the current times of recession to let their boats go into default. They decide whether to keep their home, car or boat. After a bank repossession, the bank will auction boats that have been collected as collateral in return for the loan. In most cases the lender accepts the highest bid as time continues to depreciate their collateral. Boat auctions have seen a significant increase in inventory since 2007 and can be a great alternative to a traditional dealership purchase.
You can get a list of boat auctions from banks and financiers who may hold auctions which can be your best bet. The bank will wish to get rid of the boat as early as possible to regain the amount lost and to avoid maintenance cost on the boat. Often, these boats can be purchased at a surprising discount and you can get a discount of even as much as 50%. Less frequently, you can also buy boats in police auctions. You can check the listings of boats online and know what is available. You will have to think of transport costs if you live over seas as it is going to be a significant move.
You will also need to check the boat properly before purchase to identify possible damage, oil spills and stains etc. You have to be extra cautious because auctioned boats are mostly sold in “as is” condition. You must also check the condition of the engine because fixing repair costs for engine work can be substantial. You can check sources where repo boats are available if you wish to buy one but are not confident about arranging for initial finance! Many investors buy boats at 40%-70% discounts at local or regional boat auctions then ‘flip’ or resell them to people who can afford it.
You can get fabulous discounts on bank repo boats and benefit from such deals. These vessels were in the beginning well maintained by people who cared for their boat. Wear and tear on repo boats may be substantial or not. It largely depends on the age and how the owner maintained the boat during the default period. So, the repair work on such boats may or may not be expensive. In some cases it may just require a coat of painting, if any. Responsible owners even in default will maintain such boats surprisingly well for safety and insurance reasons.
Those who repossess boats such as finance companies and banks wish to liquidate their collateral quickly because these are basically non-performing assets on their books. They realize they cannot get a very high price for the boats especially in regards to the current economic condition. Hence they wish to dispose the boats as quickly as possible.
In the end you will do well to research before buying a repo boat for personal use or from the viewpoint of investment. You can also find several auction sites that enlist boats for sale throughout USA and Canada.