How To Find A Bargain When Making A Big Purchase

November 10, 2017

Over the last few months, I’ve been on a quest to add a new skill into my life. Living in Maryland, near the Chesapeake Bay with marinas galore, and as a former boat owner – I decided that sailing is a skill that I should learn.

I grew up spending lots of time on the bay and lived on a boat for a number of years after my marriage ended. But I’ve always been a power boat guy — fire up the engines, get out into open water, throttle up and head to wherever we wanted to go. I always admired the simplicity and beauty of sailboats, but have never spent much time on them. I’m going to change that now. But, the journey hasn’t been easy.

Finding the perfect sailboat with a limited budget

I had some parameters that made buying my boat a bit difficult: I had a fairly low budget because I bought a house about a year and a half ago and used a large chunk of my savings for that. With a new mortgage and child support, cash flow is still relatively constrained. As excited as I am about learning to sail, I’m not willing to compromise my other goals like retiring on time in order to have a boat today.

So within my small price range, I got to work looking and I saw a lot of boats. Usually, my first thought was, “I can maybe make this work,” or “Is this a boat or a crime scene?” Everything I saw needed A LOT of work and I’m not opposed to that, but some were going to be lucky to not sink when they hit the water. None of them struck me as “this is the one,” though.

Adding up all the costs

I kept looking, kept searching, and then… boom: in the same week I saw 2 that were within my price range and felt like “home,” although one had a higher “sticker price” than the other. That’s when I started doing the full blown calculations of what this will cost me. Things I included:

the price of the boat
monthly cost of a slip at the marina
insurance
repairs & upgrades I’d want to do, etc.

After factoring in all of that, the full cost of each boat was roughly the same.

How to choose

So, it came down to preference – when I gave each boat a score from 1 to 100 based on what I wanted from an old sailboat, they both came in at about 90. Which is awesome because the others came in at around 10-15 on that 100 point scale! These were 2 serious outliers, and perhaps a bit mis-priced.

What I later discovered is that both were owned by people trading up to much larger and much more expensive boats and they wanted to unload their boat quickly to avoid paying for insurance and marina costs. With 2 boats that I valued equally, my “buying strategy” was to put in an offer a bit lower than the asking price on each one and see what happened.

What happened?

I lost out on one boat to another buyer and on the other, they gave me a counter offer, which I accepted. So by the time you read this, I’ll be out on the Chesapeake Bay learning how to sail. Wish me luck!!! I’m just hoping I keep my head low enough not to be hit in the head by the boom (some of my early sailing terminology at play here) as it swings from one side to another, knocked overboard and unconscious. If that happens and I’m out on the boat alone…this may be my last blog!

The big takeaway for everyone

When you are planning a major purchase, whether it’s a car, boat, household appliance, house, etc., the best way to go about getting the most value for your hard-earned dollars is to have a plan and have a strategy. I went into this with a definite maximum spending limit. It was low! Patience was required because I looked at over a dozen boats in person, and hundreds online and only found 2 that were acceptable given my goals.

Factor in all the costs

Don’t just look at the price of “the thing,” look at all the associated costs. For example, when my daughter bought a new car, her insurance rates went way up. When buying a major appliance, there are delivery and installation costs to figure in. Don’t forget closing costs when evaluating a mortgage.

Control your emotions

Don’t let your emotions make you “buy up.” When looking at 1 boat that had a dirty smelly frat house vibe, I walked past another that had a “For Sale” sign on it & I looked at that one the next day. It was several thousand dollars above my maximum price, but it was NICE and my emotions told me that I could somehow make it work. I had to talk myself down from that emotion and stick to my plan. Emotions can sometimes be the enemy of good decision making.

How I kept my head in the game

In the end, I had a little index card where I wrote down the things that I wanted from a boat, including my maximum price and some things that would be deal breakers. When in doubt or I was tempted to stray from my plan, I’d look at my handy dandy index card and it would help bring me back to rational world. This way I know that I’ll always have smooth sailing, at least when it comes to financial side of this new hobby.

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