| Phil_G |
| (new user) |
| 13/08/2005 00:34 |
Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Sorry guys if this changes the thread slightly but it seems linked somehow.
I’m in the process of making a large purchase, well large to me.. A Sealine 240 / 24,, I’ve viewed 3 vessels so far 2 were 1996 models one priced at £24,000 (Petrol) and the other priced at £32,000 (Diesel).
My question is this although I would like a Diesel for cheaper running costs the Issues over the Red Diesel prices for next year must surely impact on the valuation of Diesel Engine vessels now so by next year if the government get there own way then Diesel Engine vessel price will drop like a stone making them a risky buy this year.
Can anyone please advise,, any assistance would be gratefully appreciated…
| Frontier |
| (regular) |
| 13/08/2005 11:27 |
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I am in the same position, just about to buy and wondering if I am chucking £10k+ into the ocean.
The only comfort I could find in favour of diesel was the fact that it is more available. I have been told many marinas dont have petrol, and many that do dont have it on the fuel pontoon. I didnt want to be carying it in cans from the back of the yard.
I believe the cruising range should be further so I guess if the price ends up the same there is that. But ultimately there seems to be so much more support for diesel boats, and diesel engines are good work-horses in a marine environment, I decided to take the risk.
I am really hoping the Red D remains though, or I will hardly ever be able to go out.
Send an email to your MP telling him/her you expect their full support in retaining Red D, its quick and easy to do.
You can get their address here
http://www.locata.co.uk/commons/
There is always chip fat I suppose !!!
Not much help to you really, but good luck!
| Phil_G |
| (new user) |
| 13/08/2005 22:14 |
Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Thanks for the response,, interesting that some Marinas don’t have Petrol hope that’s not becoming a trend as I’ve heard LPG is also becoming scares having failed to meet peoples expectation.
I reckon your right about the Diesel being more robust in a marine environment and of course the increased cruising range must be considered although in my case £8000 extra for the same vessel just because it has a Diesel Engine buys an awful lot of petrol.
| Frontier |
| (regular) |
| 14/08/2005 00:31 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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The info on marinas not having petrol is just what I have heard from brokers, I dont know from experience. Could be they were trying to put me off petrol.
When looking at various marina's litrature I did notice some didnt have petrol, so felt there was an element of truth in it. maybe the guys who actully have boats can comment.
I did think about waiting until after December, but if red diesel is retained, there could be quite a lot of people who had been waiting to see what happens suddenly looking for boats, and we could see price increases. bloody hard to know isnt it !
| Joe_Cole |
| (regular) |
| 14/08/2005 18:26 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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FWIW, in the West Country at least, it's true that many Marina's and harbours don't have petrol. Frequently the only way to get the stuff is to go and find a garage. When you can get petrol it costs up to £1.25 a litre!
| TrueBlue |
| (regular) |
| 15/08/2005 16:41 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Quote:
I did think about waiting until after December, but if red diesel is retained,
Note: derogation does not end until after December 2006 unless I've missed a possible government statement.
It may even be that any increase may be phased?
Anyway Diesel engines are more efficient than Petrol - despite the fuel cost, as well as being much safer - that's why marinas don't sell it... IMHO
| gjgm |
| (regular) |
| 16/08/2005 15:53 |
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depends where you are... but at present there may be few petrol outlets as there isnt so much demand vs all the legislative hassle of having vast amount of explosive fuel about. could be offset if the whole tax issue swings. Course, diesels will still be more efficient.not £10k more efficient perhaps! Depending on the size of your boat. But for sure, dont buy a boat that you cant refuel for miles and miles.
| Robih |
| (regular) |
| 17/08/2005 09:31 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Phil,
I think there is a significant risk of vessel depreciation if red diesel gets binned. I sold out of the motor boat a year ago because I didn't want to stand in for a £30k loss. I've heard that the mobo market is soft at present; part of which is due to folks standing back and watching what happens. With diesel prices having gone up significantly anyway the increase due to binning red diesel will be less of a shock when/if it happens. But I see what you mean about not going out very often - I worked out that my previoius mobo (Targa 39) would now be costing £1.60/mile - which is ok around the solent but a cruise over to Brittany (say 400 miles = £650) gets a bit rich.
rob
| Phil_G |
| (new user) |
| 18/08/2005 13:23 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Hi Rob
I just wish I could find an honest broker that could tell the truth and indicate to me my best options; unfortunately they all seem to be so desperate to sell anything they will change their story on the fuel issue almost immediately in favour of whichever vessel fuel type your looking at.
I’m not quite in the same league as a mobo (Targa 39) but I do have £35k to spend, interesting that a Broker in Hamble Point Marina dropped from £38k to £30k when I started to walk away. They either have a massive profit margin or they are prepared at this time of year to take a loss.
I think it’s a massive profit margin…
| Robih |
| (regular) |
| 18/08/2005 17:22 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Phil,
To be honest I think there's quite a number of folk very sensitive to what might happen in the motor boat market over the next 24 months and some are bailing out and prepared to accept a loss now in anticipation of the market going worse for a while. My view is that mobo values will fall until the reduction in capital cost is sufficient to make the total cost of boat ownership equal (under white diesel) as to what it has been under red diesel.
I reckon that the average annual consumption of diesel for a £100k leisure sea going mobo might be 800 galls. That equates to a red diesel cost of £1,800 and probably twice that under white diesel, say £3,600. Given a cost of capital of 8% on the additional annual fuel cost that's a capital cost reduction required of £22.5k to bring back financial equilibrium. That's where I got my theory that I expect to see a 20% to 25% reduction in capital values to reflect this required adjustment. It is possible to already see this discount factored in to petrol boats - so the market evidence is already there.
If you accept this then I reckon that a boat's sale price might go:
Asking price, say 100k
Normal negotiating adjustment, 10% - 10k
Therefore normal sale achieved price 90k
Red/white diesel adjustment 20% -18k
Maket adjusted value post white diesel 72k
So, this would suggest a total discount (asking price to contract price) of 28% which interestingly is very close to the discount that you have been offered (27%). So, maybe the £30k price that you've seen now is about the right number - the key thng is that folks doing deals over the next 24 months need to achieve this level of discount to wash out the diesel disadvantage on to the existing owner. Not nice, but necessary.
rob
| rickp |
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| 18/08/2005 19:09 |
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If what you're suggesting is true, presumably boats are significantly cheaper already in countries where the derogation has already gone? Are boats in spain (for instance) significantly cheaper than here because of the total cost of ownership issue you highlight?
Rick
| Robih |
| (regular) |
| 18/08/2005 20:54 |
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Fair point, but I think there is evidence at present that boats sell for more in the uk than they do in the Med. I've heard of people bringing boats back to the UK for sale to realise a higher price.
The theory can only have general applicability, there will always be people who have sufficient disposable income to ignore the "total cost of ownership"; indeed my neighbour in the marina has just purchased a Princess 58 and I doubt he is concerned at the £3k refuel cost!
rob
| Andrew_Fanner |
| (regular) |
| 18/08/2005 21:40 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Unfortunately your argument still panders to the idea of the well heeled with £100K plus boats where the cost of fuel is never a large proportion of the total cost of ownership. The people who would be totally shafted are those in smaller, cheaper boats who use them a fair bit. Make the boat value £20K and 600 gallons annual usage and look at the change. That is why the drogation needs to stay. The big boats will just move a bit less, the smaller ones may not move at all...
And lots of those smaller boats are owned by poor folk who work every hour God sends to be able to afford them at all, they don't have time to sail anywhere very much.
| Robih |
| (regular) |
| 19/08/2005 07:05 |
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No, I don't think my argument panders to the well heeled rich boater at all. The £100k example is simply a "stick in the sand"; a point around which one can illustrate the theory. The theory itself is directly applicable to lower value craft - as illustrated by the pricing of Phil's £30k craft and the "whole craft discount" of 28%.
Generally the correlation of fuel cost to capital cost, though not perfect, is reasonable. I've had a £40k nimbus 30 footer and a £130k targa 39 - the latter used a good deal more fuel than the former - hence the broad applicability of the theory in the impact on the owners wallet.
Agreed that the disposal income of the well heeled boater will be greater than the folk at the bottom end - but don't forget that the well heeled also have mortgages of £500k, maybe marine mortgages of £200k, they have school fees and expensive cars etcetera. People tend to live to their means and whilst their boating budget will be greater then many people's it again will be proportionate to boat value.
rob
rob
| AdeOlly |
| (regular) |
| 19/08/2005 13:48 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Hi
Have just been through this myself. Had a V8 petrol before that cost a fortune to run but was cheap to buy. It was also very unreliable, which was my main reason for changing. I bought a diesel (S24/KAD32) on ther basis that:
a) Diesels are much more reliable than petrols - important in a single engined boat. Remember your life may one day depend on that reliability!!
b) Petrol is easy to get on the south coast, but try getting the stuff in France... or the west country.
c) As with cars, a good diesel will always do more MPG than petrol. I'm getting nearly 5nmpg...
d) Diesel is safer.. never liked the idea of 200l of petrol under the helm going through a carb!
I am prepared to accept that I may lose some value if/when red goes, but figure that it won't be a huge amount of the value of my boat (£36k) in comparison to all the other costs I have to pay. I think the other advantages of diesel will always make them more desirable than an equivalent petrol, IMHO, and I wouldn't go back to petrol.
Now is a good time of year to buy with the end of the season only a few weeks ago - any dealer with lots of stock will be keen to do a deal.
| tiger_tim |
| (regular) |
| 19/08/2005 17:37 |
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Phil,at boatmatch we charge 3% to the seller when sold, and publish our full brokerage rate in all of our ads...Give us a call,and we'll try to give you some advice on the motor boat market as we see it.In our opinion pricing is more related to condition than fuel costs.........Tim Robinson...Director Boatmatch.com
| Phil_G |
| (new user) |
| 21/08/2005 21:56 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Rob
Thanks for that,, interesting calculation and I guess when dealing with Broker’s Stock and not Broker’s selling on behalf of owners is about right for a couple of mobo’s I’ve seen recently anyway.
I suppose I am trying to predict the future really, it’s my first boat that I will have sole ownership of which obviously means all financial responsibilities are entirely mine.
I would like to think that in about 2 or 3 years I could sell it and get something bigger perhaps, so in order to do that I am trying to limit my losses this time around.
Alternately I just want get out on the water and after listening to you guy’s and seeing for myself some instabilities within the market concerning mobo’s, unless a good deal comes up between now and xmas I think I’ll start looking at what I can get in the Yachting world for 35k. It may be a short term solution for me and they all seem to have Diesel engine fitted so should be easier sell, which means in 2yrs sell it and get a Diesel mobo.
Phil
| Phil_G |
| (new user) |
| 21/08/2005 22:03 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Hi
I’ve no doubt that Diesel is the future and as I won’t to sell the Boat in about 2 or 3 years time to get something bigger its what I should be looking for I know.
But in the present climate with this Red Diesel Issue hanging over us I just cannot bring my self to spend so much extra money just because it’s a Diesel. I mean we are talking 6k to 8k difference for the same boat; I could almost buy a Petrol Sealine 24 Vessel and fit a brand new Diesel replacement engine, its ridiculous. With regard to Petrol Reliability problems could it be Injection versions are more reliable then Carbs.
It’s a no win situation really financially,, because if Diesel vessels reduce in value closing the gap between Petrol & Diesel then no one will won’t to buy Petrol vessels,, when they can get a Diesel for a bit more,, so Petrol Vessels will get even cheaper because no one will won’t them...
Oh my God when will all end…
| apollo |
| (regular) |
| 24/08/2005 21:15 |
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Not sure I agree with this.
Comparing UK with Holland where white diesel is the norm albeit cheaper (but not that much) than we will end up paying, the average boat prices (at least for the kind of boat I am looking at) are higher than the UK.
Therefore not sure there will be such a big swing as you suggest.
Also variables like the real juice guzzlers maybe depreciate more
and the displacement boats hardly any effect 
.I think the whole thing is unknown and not sure that "theories" achieve anything other than scaremongering.
| Robih |
| (regular) |
| 25/08/2005 08:05 |
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Agree entirely that the whole subject is a black art - as is all economics! (As G Brown is finding out with tax revenues falling way behind prediction) Nevertheless I think some thinking on the subject is helpful as at least it is a framework around which to have a discussion. I'm sure I'm not exactly right with my theory; it's just my best assessment of the situation and the post that started this was asking for opinions.
I think that you are absolutely correct with your displacement boat theory. I'd be very happy buying a Linssen or the suchlike - I think demand will increase for displacement boats. In fact when I sold out of my Targa I did seriously consider a displacement mobo but decided to try sail. I personally think the medium term future of leisure motorboating is in displacement boats as the fuel consumption rate is so much more sensible. I expect that is why dutch mobo's are holding their price?
rob
| Gludy |
| (regular) |
| 25/08/2005 10:17 |
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I agree with your points about displacment boats.
The red issue was one factor in me getting out of planing boats and in my case into a semi-displacement boat.... a sort of half way house that is still much more efficient at diplsacemant speeds.
| Callisto |
| (regular) |
| 26/08/2005 21:49 |
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You make a very good point there. It is one I have also made on several threads. When it is possible to buy a KAD32 for about 10K (and it is if you know where to look!) drop it into a 24ft petrol mobo that you have bought for 8K less than the equivalent diesel boat with a tired , used motor, it all starts to stack up. You have paid not much more for the boat than you would have paid for the diesel boat in the first place but you have a brand new motor too with hopefully a good few years reliable life.
The point about petrol reliability is a strange one. Why should a petrol on a boat be less reliable than one in a car and we don't worry about them. A well maintained and serviced petrol should be no less reliable than a diesel. Agreed a petrol has electrics to look after too and this is generally the weakest link so pay a bit more attention to them and you will have no trouble.
Alternatively, if you don't plan lots of long distance cruising, buy the petrol, put the 8K in your pocket as fuel money for the next few years and just go out and have fun.
Petrol is no more dangerous and a diesel boat fitted with a LPG cylinder....both will go bang big time if you do something silly or fail to take the right precautions.
There are a load of petrol mobo's in the US and they are the norm not the exception....they can't all be wrong!
Has to be your decision but whatever it is, enjoy it.
Good luck
JH
| Phil_G |
| (new user) |
| 03/09/2005 08:04 |
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Well that’s it then, news on the radio today On ‘RED Diesel’ say that the new EU taxation laws are to go ahead which could see RED Diesel triple in price by next year.
All that remains now is to see the industry go in to a decline and wait for Diesel vessel’s to drop in price sometime between now and next year and a probable collapse of the boating leisure industry all together, sorry guy’s a bit doom and gloom, I’ll try and see the sunny side later.
Sounds like even with the extra cruising distance you get with Diesel that it will be cancelled out anyway as it will be more expensive than Petrol and as for the reliability factor associated with diesel engines; surely that’s all down to preventative maintenance anyway whether it’s Petrol or Diesel.
This just leaves only one reason to buy a Diesel and that is because it’s easier to find outlets than it is for Petrol, although this only seems to apply to certain areas such as the West Country UK or France and places like that.
Shame the South Coast Blood Sucking Marina’s who like to squeeze every penny they can out of us, couldn’t come up with some sort of fuel subsidy idea for annual residents, instead they over charge on fuel as well, I expect they will charge for using the toilets next.
Something I just don’t understand at the moment,, why don’t the South coast Marina’s get any bad press over there blatant over charging on everything, is it just me that thinks annual 4k to 5k for a 28 ft vessel is a little high. I suppose if us mugs are going to pay it then they will charge it.
Well, that’s my whinge for today. Life’s a bitch and then you go sailing.
| Marsupial |
| (regular) |
| 08/09/2005 09:14 |
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Hi Phil
IMHO you would be better off if you delay your purchase until the derogation of diesel was in operation. I suspect your hypothesis that, the price of traditionally “affordable” Powerboats will be greatly hit, will be true, of course the high end of the market will be unaffected – charge anything you like for fuel those owners will pay it. The future may see a shift towards semi displacement and displacement hulls which are more fuel efficient (affordable), leading to an even greater depreciation of the current designs. But these market developments will take a few years to kick in –IF they happen at all.
I think of the boat market (in this context) it in terms of the betamax video system, “it may be good but no-one wants one”, I fear that in a few years the types of boat you describe will fit this model.
Have a look at the BMF website, the industry is certainly bracing itself for a huge drop in demand – which of course will translate to lower prices.
Cheers
David
| Gludy |
| (regular) |
| 08/09/2005 14:53 |
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That was talking a lot of sense.
I have already switched over to an SD hull because at least that offers me comfortable cruising at lower speeds. I can choose to go there at 25knots and pay a lot - or choose to do it at 10 knots and pay three times less than I do now. I think there will be a move towards SD and D hulls as well as some mopving towards sail - however, many may be stuck with a big loss on their hands.
"charge anything you like for fuel those owners will pay it. "
Only some are like that by no means all - I know very wealthy people who will not pay it if derg happaens, plan to move their boats overseas.
It easier for larger boat owners to sell in the Med market place than it is for the smaller boats.
| Phil_G |
| (new user) |
| 09/09/2005 21:41 |
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Hi Dave
Whether I wait for the derogation of red diesel or not all fuels,, Petrol, Diesel and even LPG are on a rapid increase, not helped much by the greedy marina’s over charging which can be seen looking at other threads.
I also notice that some marina’s offer 10% discount when buying over 500ltr’s which again is not much use to the smaller vessels which generally don’t hold a tank that size.
This fuels your idea that the higher end of the market won’t be that bothered especially as a large percentage probably have it registered as a company asset and the running costs down as corporate entertainment.
Whichever way you look at it, a mobo is an expensive toy and the irregular sales prices I've seen makes me feel that if I make a purchase that I’ll be stuck with it. In the 4 month’s I’ve been looking nearly all the same mobo’s are still for sale.
With that in mind, I’ve decided that I just can’t wait around for a couple years while the market settles, so the MOBO is on hold for now while I look at some semi displacement and displacement vessels.
I’ve also booked a 2 week sailing course in October to see how I get on.
I’m not saying the SD/D market is any more stable but at least I don’t have that feeling I’m throwing 10k in the ocean.
Phil
| adrianm |
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| 10/09/2005 11:26 |
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I sold my last boat in six weeks, took two years to sell the house......
| Phil_G |
| (new user) |
| 10/09/2005 13:35 |
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That’s not really much of a statement without any details..
| adrianm |
| (regular) |
| 11/09/2005 10:56 |
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I was merely trying to point out that people keep saying how hard it is to sell boats because of the red diesel issue andf I don't think it is.
I know of a couple who have recently bought a large sports cruiser with twin MAN engines that does over 40 knots. They are not the slightest bit concerned over the red diesel issue and I doubt they're alone.
Don't forget we've been through all of this before and I didn't see any problems then with selling boats, the brokers I bought my boat from then were doing a roaring trade.
Personally I think the whole red diesel issue has been totally mis-handled. It should have been tackled on the basis of the taxation of white diesel and how unfair that is. After all we have the cheapest white diesel in the EU until tax is added.....
| Gludy |
| (regular) |
| 11/09/2005 22:38 |
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I could not disagree more - the chances of the boating lobby having any say whatsoever on wihite diesel is zero .. the only way the government will back down on white is to hold back a tiny bit after a massive wide spread public protest - one is about to happen.
The trade is generally reporting sluggish trade and the question of dereg on diesel is a factor in that. You cannot calim that a price rise of 2 or three times would have no effect on the market ... it would have a major effect.
| Medskipper |
| (regular) |
| 12/09/2005 18:17 |
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Lets face it if the government get their own way over diesel prices, All vessels will fall in prices! the reason of course is simple, there will be a huge amount of vessels for sale. Market forces dictate that prices must then fall! Too many sellers and not enough buyers = Lower prices!
Barry
| adrianm |
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| 12/09/2005 20:34 |
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Let's see what the Southampton boat show figures show.
If people were really concerned about it why are Barclays reporting record levels of marine mortgages? Nearly all of which are for motorboats.
At least the white diesel tax issue would make sense to Joe public. Cheap red diesel for massive gin palaces is totally indefensable to them.
| jrb1978 |
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| 12/09/2005 22:40 |
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BTW, if Red diesel is retained - and i hope it is, why should mariners pay full duty for petrol? Same basis as Red diesel for pleasureboaters surely.
No doubt the arguement will be that diesel is used by the industry, by fishermen, by ferries etc and petrol is only used by MoBoers with plastic US boats.
If that is the arguement, then you begin to see why Red diesl may go - the Government hate the thought that us 'Rich' boaters are avoiding tax.
Remeber - build the country, tax the middle class!
| Bradders |
| (regular) |
| 15/09/2005 14:49 |
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Greetings all
I`m new to boating and was looking at buying a second hand motor cruiser , I`ve been following this thread with interest for a while now. I recently contacted a broker with regard to the red diesel issue, as I need all the help and advice I can get, this was the reply
" The red diesel issue will not come into effect until Jan 2007 - so I am told. If the price goes up to the price for the rest of Europe and then boat prices come down, you will probably find that the French, Spanish etc will come and buy their boats here instead! "
Has anyone any thoughts as to how much percentage wise the deprciation would be on a mobo ? if any.
Any other buying tips or advice would be very much appreciated
Cheers
| adrianm |
| (regular) |
| 15/09/2005 16:12 |
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Point is that it won't go up to the price of the rest of Europe, it will go much higher.
After all we pay more for our petrol and white diesel than most of Europe so why should red be any different?
| Bradders |
| (regular) |
| 15/09/2005 21:40 |
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Thats a good point ! so if you were in my position would you wait untill the outcome of the red diesel is known before you went ahead and bought , or would you buy now ? I know its a personal opinion but you are the ones that know about this subject and know about boats and their value, I will provide a person e-mail address if need be.
Cheers
Not sure if I like these little faces though, thought I`d give em a try
| GC1 |
| (regular) |
| 16/09/2005 15:32 |
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I believe the big swing will be in the supply and demand issue, in Holland people who have their boats have bought them understanding the costs, what we have here now is people who have boats that they 'thought' they could afford that are now going to become too expensive to run. Now if these all start going on the market the price will drop, not good for anyone but it will happen, panic selling, just look at the panic at the pumps a few days ago. People who can't afford diesel at petrol prices and more the way things are going MUST get out now before it is too late, they can always com back in if it doesn't happen which is unlikely, but if you could be about to lose 40k or so I know what I would do.
I don't wish hardship on anyone and we all have a laugh now and again but this is serious get your head out of the sand time!
| GC1 |
| (regular) |
| 16/09/2005 15:42 |
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There will always be people who can afford to go boating, but the 'right people' that can afford it. Present diesel boaters have been the cats with the cream for years and made hay while the sun shines, they have saved thousands the honeymoon is now over, no surprise it has been talked about for years on this forum. What you do have is people who are not in the right boat for their financial circumstances, e.g. they could not afford to run it at petrol and above prices, the people looking to buy their boat knowing that would be higher income earners, so it will be the same people buying new but their budget will have to take into account the cost of running it.
e.g. Average £1,000 per month budget to boat with (excludes depreciation)
Old : Finance £600, Marina £200, Maintenance £50, Fuel £150
New : Finance £300, Marina £200, Maintenance £50, Fuel £450
You do not need to be a brain surgeon to see that you will get less boat for your budget
The money MUST come from somewhere!
| AdeOlly |
| (regular) |
| 19/09/2005 12:53 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Fuel costs won't triple from today's prices.
Current duty on red is 5.22p per litre.
Current duty on white is 47.1p per litre.
Difference is 41.88p per litre.
To this VAT is added (
)making a total of 49.21p per litre increase. In my part of the world I'm paying 55p per litre, so all other things being equal the price will roughly double not triple.
Only if oil prices fell right back, which seems highly unlikely, would the cost triple as the amount of duty increase is unrelated to the fuel price.
Interestingly Biodiesel is taxed at 27.1p per litre. Anybody out there that can produce it for the same cost as conventional diesel??
I'd also question that if an individual can afford £1000 per month for boating they couldn't afford £1150, IMHO.
| Andrew_Fanner |
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| 19/09/2005 14:07 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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But if the individual can afford £100 per month for boating then £250 looks unattractive.
As some folk still don't spot, its those on the margins of affordability (a sizeable number IMO) who will be screwed.
| Gludy |
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| 19/09/2005 16:01 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Many of us pay a lot less than 55p per litre hence the treble price. Plus there may be large additional cost heaped onto the suppliers with separate fule tanks etc.
What really matters is the marginal cost of a trip - a local trip costing say £300 you may just about accept - if the costs goes to £750 you would not do the trip - its a question of value for money.
| AdeOlly |
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| 20/09/2005 10:16 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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If the monthly budget for boating is £100 only part of that will be fuel...
Granted those on the margins may have problems, and that's one of the key reasons we're all fighting the case.
My point was that peeps that can afford £1000 a month on boating can probably find the extra £150 or so.
| AdeOlly |
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| 20/09/2005 10:36 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Sure if you're lucky enough to pay 35p or so at the mo the price will treble. Where can you get fuel for that price??
The ones that will really suffer are those with large boats and inefficient engines, and I can see those vessels decreasing in value. Maybe the flip side is that smaller boats, say sub 35', with modern engines will increase in value as owners trade down????
| Gludy |
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| 20/09/2005 11:25 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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A lot of boaters struggle to run their boats.
I know a boater who bought a petrol boat - went on his first trip and spent £800 on fuel - then spent the whole winter changing his boat over to diesel. if he was being forced to spend at the petrol price he would not be able to do it.
Last year I was paying 22p per litre - if red goes given the natural fuel inflation plus the extra tax the fuel costs could easily be £1.30 per litre - faced with that sort of increase over a short time many boaters will not be able to afford to keep their boats.
For those who could afford it many would choose not to afford it and either sell up or take the boat away from the UK. The balance will have tipped away from keeping it here.
Many of those who have made money and can afford large boats value money and want value for money - the stereotype of the rich who do not care about value for money is not true - or at least only true in a small number of cases.
Those indifferent to what may happen or arguing that it would not have a large effect on boating are simply fooling themselves and sometimes those who listen to them.
If anything, if red goes, it will signal the demise of the large planing cruising boat in the UK. There would probably be a move towards displacement and semi-displacement boats. All high speed planing boats use a lot of fuel relative to their size and so all would be hit - regardless of being 30 foot or 60 foot.
| Andrew_Fanner |
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| 20/09/2005 14:04 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Assuming boat is wholly owned.
Mooring costs are fixed (pretty much) regardless of fuel costs
Insurance ditto
Licences ditto
so not germane to the argument. I'm assuming £100 per month on fuel. Not too hard to do if you get out and play every weekend.
In passing I don't get through that much, don't get the time.
| Gludy |
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| 20/09/2005 15:10 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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A single fill up at 43p per litre costs me over £1k - that could end up at £3k plus.
Cruising boats of any size do not get far on £100 worth of fuel. It will hurt and it will effect the whole cruising power boat market.
| Robih |
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| 20/09/2005 16:17 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Gludy,
We've shared our views (which are similar) on this subject before and we've been shot down as scaremongerers; but my view remains pessimistic. You might remember that I've sold out of power boating in to sail because of my concerns.
You're right again about your refuel going from £1k to £3k and can I ask you, as a big Squadron owner, whether that level of cost will significantly affect your future cruising/boat owning decisions? Personal question granted so please feel free to ignore. I'm interested because the Squadron owner is always used as an illustration of an owner who, having spent a pile on buying the boat really won't care about the £3k refuel cost - is that true for you?
rob
| Gludy |
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| 20/09/2005 18:27 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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No it is not true of me nor of other squadron owners I know.
Some would take their boats away from the UK.
Some would pack it in.
I do not know anyone who would just carry on. Even now with our local fuel price having doubled in one year - it has changed the views and owners are waiting to see what happens with red.
I have purchased a new SD boat that offers me a choice of going slow in a comfortable fashion and using 1/3 of the fuel. So it has changed my boating already.
You have come out of power so it has changed yours.
I know for certain that those with smaller boats who say just manage the £100 for the weekend are not going to manage the £300 for the same trip.
"Squadron owner is always used as an illustration of an owner who, having spent a pile on buying the boat really won't care about the £3k refuel cost "
I only know those who care, I know none who would take this 'do not care' view - they say its better to take a holiday than go for a weekend cruise ... its a question of value for money, there comes a point when they would prefer to spend thier money on something else.
The idea that those who can afford a Squadron just throw their money around care free is rubbish. Its an idea fixed in some troubled blazered salemans mind .... the old "if you need to ask about the fuel consumption then you cannot afford the boat ...." Utter rubbish. I ask and I can afford.
Spending money is about choosing the best balance for your needs - change the price and that balance changes because other options become preferable inlcuding the option not to spend the money at all.
Boat sales are not good at present - I think generally speaking sales of gin palaces at SIBS will turn out to be poor - already the trade is reporting an overall poor year - only part of this will be due to the confusion over Red but if red goes to road price level and beyond you can expect to see a major effect throughout the marine industry - the red issue has not been discounted - most boaters I speak to think they just cannot do away with it .... wishful thinking.
| Robih |
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| 20/09/2005 18:55 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Interesting, agreed and as I expected.
Rob
| Phil_G |
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| 20/09/2005 20:14 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Interesting to know that even the well heeled look at the price on the pump when they fill up…
But I think I prefer the idea that they don’t care and that they all sit around drinking gin smoking big fat cigars while looking down from the Flybridge at us in our 30 footers.
It gives me something to aspire to…
| Robih |
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| 20/09/2005 21:52 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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the "well heeled" are "well heeled" because they have always looked at the price on the pump in all its various forms!
rob
| GC1 |
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| 20/09/2005 22:35 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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You seem to be very blinkered, with your size of boat there are numerous other more efficient and slightly smaller if necessary boats that you could buy, why would people give up and not just get a boat that suits? All new buyers who are buying knowing the costs will have no problem, as for someone who buys a boat without researching and gets a surprise at the fuel costs, well more the fool he is.
Boating will go on, it will be upset for a year or so with the wrong people in the wrong boats but will settlle IMHO. Those left holding big uneconomical boats will be hardest hit, the smart ones are out of the market now with their cash safely put away watching and waiting, easier to get back at where they were if nothing changes or at a level they feel comfortable with, not left with a boat rotting unused on a swinging mooring.
I do feel sorry for those that will be affected, but they have had the good times, it has been well documented and broadcast, no excuses for anyone who has been in denial until now. I am a petrol boater and have paid my taxes, why should a diesel boater have it any different, who has stood up for me shouting about reducing the tax on petrol for boats? The party is over, be prepared for reality or take the consequences.
| GC1 |
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| 20/09/2005 22:45 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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I agree, but why have they not 'unscrewed themselves', it has been common knowledge for a long time, too many heads in the sand for too long. Anyone caught out now who will be in real trouble has brought it on themselves for not taking action earlier, there are a lot who have and are not faced with this problem.
| Robih |
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| 20/09/2005 23:07 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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If you read Gludy's post carefully you will see that he has taken action to mitigate the effect by buying in to a semi-displacement hull. Your implied criticism seems unfair.
| GC1 |
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| 20/09/2005 23:45 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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I am talking about the general view he takes, he has taken the right step, but others have not. But as I have said and most people realise there are a lot of 'heads in the sand' out there still
| Gludy |
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| 21/09/2005 00:35 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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I find your views a little harsh, if not selfish.
Hardest hit will be the typical cruising power boater with a 30 foot something that he loves and struggles to keep. If the entire market had sold out to convert to cash the prices would have dropped like a stone - many are trapped and live in hope that it will never happen.
its not easy for them to try and sell up - stay out of their hobby for 2 years or more then hope to buy in - real world factors such as they losing their marina berth would matter to them but that does not seem to bother you at all.
"why should a diesel boater have it any different, who has stood up for me shouting about reducing the tax on petrol for boats?"
Well that a nice selfish position:-
1. The chances of petrol being reduced just for boats is zilch. To have argued such a case would never have resulted in anything but damage to boating.
2. You bought into a petrol boat knowing the costs.
3. You had a choice of buying into diesel and chose not to.
When did you buy your boat?
What is your boat?
Where is it berthed?
You seem to be handing down these harsh judgements so it would help if we could understand a little of your boating experience etc.
| AdeOlly |
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| 21/09/2005 10:25 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Agreed the marginal cost of a trip is largely the fuel cost, plus food, beer and visitor's berthing fees, albeit these are discretionary to a point!!
I switched from petrol to S24 diesel this year (long sad expensive story my petrol boat, including it testing the engine bay fire extinguishers fitted the week before... they worked!) and I will upgrade to a larger boat once the fuel situation is known. £100 of fuel takes me over 150 miles at 25 knots in the S24, and as a proportion of my budgeted annual costs doesn't figure all that highly. It's huge fun too!
I have a friend with a Phantom 38 who's obviously not happy with the prospect of double fuel costs, in his case, but will dig deeper, maybe use the boat a little less, but will carry on with it. His Phantom is financed, so the percentage increase on his boating budget is not huge given his cruising usage.
The impact on individuals will clearly vary immensely depending on their circumstances. Although the new boat market rumoured to be slow, (tho marine finance companies reporting record lending figures) there were plenty of people who appeared to be negotiating deals on new planing boats at SIBS.
| Gludy |
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| 21/09/2005 11:22 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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" I will upgrade to a larger boat once the fuel situation is known"
Even you are making decisions based upon the result of the red issue. Your friend whilst not giving up boating will restrict his boating. These are natural adjustments by the users to the market change. Others will get out of boating all together, yet others will take their boats outside the UK - no more tax will be collected and our hobby will be hard hit.
| Andrew_Fanner |
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| 21/09/2005 12:56 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Interesting to note from the news today that HMG will _not_ up the tax on aviation fuel, _and_ maintain it would have no environmental effect if they did.
Now isn't than interesting. Something to do with holiday flyers votes I suspect:-)
| AdeOlly |
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| 21/09/2005 13:27 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Just like to point out I do support the campaign to keep red and am not indifferent to the outcome. In my first post I was making a specific point about a specific situation.
I freely admit I'm taking advantage of my circumstances to minimse my downside, which is clearly a lot less than yours.
On the main forum pages I see threads going up about the virtues of differing drive types on prospective 50' fly purchases and which new model of large planing boat to go for. This is among folk that know the red situation. I agree some people will be hit hard, will have to change their boating habits, will have to trade down in size, or that no more tax will be collected, but equally I don't subscribe to the "it'll be the end of large planing boats in the UK" theory.
It'll not be nice for sure, but it'll not be the end of motor boating.
As an aside - whilst wandering around SIBS on Sunday I was wondering if any of the UK manufacturers currently focused on planing boats were going to move into the SD market if red goes.
| Gludy |
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| 21/09/2005 14:27 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Most Uk makers have a large export order book so i do not see them moving into SD's then again M&S did not move with the times nor did IBM so it is often the case that manufacturers cling to the declining market.
I have not said anywhere it will be the end of MoBos in the UK - I have said it will devastate the UK CRUISING power boat market. it will have a huge effect on the market place and exclude many who struggle to keep their boats and are the backbone of UK motor boating.
Yes, I know that discussions are going on about which 50 foot planing boat to go for despite the red threat - I am not sure how many see SD boats as a way out of the red issue. My bet is that most do not see that as a route offering some proofing against the death of red.
I am not even sure if that 50 footer is destined to be berthed in the UK waters
Even you are delaying decisions and hence delaying orders pending the issue - many others are holding fire as well. That in itself is an effect.
It will be interesting to see how all this turns out ...
| adrianm |
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| 21/09/2005 16:51 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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I have friends who recently bought a V52 which guzzles fuel at an alarming rate. When I asked them why they hadn't gone for a slower and more fuel-efficient boat (as I have) they replied that with a slower boat they wouldn't be able to go anywhere in the limited time they had available.
Cath 22 really. To get the money to run the boat they have to work long hours so they need a fast boat to get to France etc. in the limited time they have.
I can see others being in the same fix. Glad I'm retired!
| Bradders |
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| 21/09/2005 20:39 |
Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Gludy
I totally agree with your comments, I for one, after reading the comments on this thread, will be holding back to see what happens, I would hate to buy now, then twelve months down the line lose 20-30k on a 130K boat because I could`nt wait, just hope the wife doesn`t spend the money in the mean time, ably assisted by my daughter.
jeeez wish I was retired too
cheers !
How many more folk are thinking on the same lines ? time will tell eh !
| Andy_Kayll |
| (new user) |
| 22/09/2005 02:17 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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One interesting point in this is that the govenment risks ending up in a similar tax situation as with Tobacco and Booze i.e. If the price rises to a point that profits can be made then people will start setting up offshore re-fueling points and there will be a a HUGE increase in Bio Diesel production (at the end of the day who can tell if Bio Diesel has had tax paid or not...) The govenment makes large sums of money from fuel duty but the cost of policing revenue misuse has to be balanced against returns so any tax hike is a headache for them to, if it happens to quickly people will react.
You must also consider things such as the increased safety, efficiency, and longevity (a well maintained diesel will far outlast a petrol engine).
If I did get a Petrol engine I would certainly be looking at doing a Duel fuel LPG conversion and promoting LPG filling points at well used filling places (just a thought...)
Andy :-)
| Andrew_Fanner |
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| 22/09/2005 11:17 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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LPG would follow pretty soon after red IMO. An equally "good case" can be made for its "lack of green credentials" if you are politics of jealousy eco-warrior. But not until a few more hapless individuals had been drawn to it by the cost. Then Gordon will pounce.
| jrb1978 |
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| 22/09/2005 14:31 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Yes, but LPG for ROAD vehicles (full tax etc..) is only £0.45/litre - So I dont mind paying road prices on that.
The fact is though that for the moment LPG used for boats only has VAT added to distinguise it from house fuel. There is no degrodation, we are not unique in europe, we all pay the same for LPG.
I agree that if it gets really popular then they will put tax up eventually, but the chancellor has frozen duty until 2008 already on all LPG fuels, car house or otherwise.
| Gludy |
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| 22/09/2005 15:17 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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You know this government has already failed us in not letting us know its intentions sooner - hence there is boat buying blight beginning to spread and a lot of uncertain planning.
| jrb1978 |
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| 22/09/2005 22:48 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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So the jist of this is - whatever happens, if something changes were all f!cked - but if red stays most will be ok, so we will bury our heads until the issue rolls around in another 7 years?
| robind |
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| 01/01/2006 08:23 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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I understand that Premier Marinas are supplying diesel, at cost, to bertholders in the new year, is that correct?
| SimonC |
| (MBM editor) |
| 03/01/2006 18:41 |
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Re: Does Red Diesel Issue = Rapid Diesel Vessel Depreciation
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Yes it is. See November issue of MBM (p6) or here:
http://www.premiermarinas.com/news/default.asp?view=36&start=12
for more details.