Boat Sales Ride Crest of Wave, Dealers Credit Better Economy

COURT HOUSE – Boat sales seem to be on the upswing this year, according to a variety of dealers across the county.
In fact, one dealer in Court House said, “This year has been one of the best in 15 years, if not the best.”
His sentiments were echoed by other Cape May County boat dealers randomly contacted, who credited the turn-around to resurgence in the economy, people having more disposable income and a reduction in the boat sales tax for what they are seeing as a “good year” after multiple years trying to keep their business afloat.
Court House dealer Rob Haines, who has worked in the industry for 20 years and became an owner of a dealership that specializes in outboard motors four years ago, said he’s seen an increase in sales since former Gov. Chris Christie cut the sales tax on boats in half, to 3.5 percent, in 2016. Until that legislation, New Jersey had the highest sales tax on boats of any state along the Atlantic Coast. The sales tax is capped at $20,000, which applies to yachts sold for more than $571,000.
People Spending More
“People were buying in other states than New Jersey before the sales tax changed,” Haines said. “Our sales reflect the economy and people are spending a little more because the economy is doing better.
“The boat market is good,” Haines said, “and sales are up.” 
Because interest rates are lower, Haines said people who might have been looking for a 19- or 20-foot boat are buying something larger. “Since the sales tax was cut in half and the economy is doing better, sales are up,” he added.
Haines’ boats range from a basic 16-foot outboard at $12,000 to higher-end models that ranges from $25,000-$350,000. Most buyers looking for a 23 – 26-foot outboard for fishing or family fun are “blue-collar workers” while the higher-end buyers are “probably white collar, doing better” financially he said.
His “typical” buyers are mostly 45 – 65-years-old. “We’re not seeing the millennials buying outboards,” Haines said. “Our buyers are dads with teenagers or older parents whose kids are through college, and they don’t have those payments anymore.”
Ninety percent are from the metro-Philadelphia area, including upper Delaware, New Jersey, and Pennsylvania.
“Buying the boat is the cheap part, it’s the maintenance that can drive up costs,” he noted. “We don’t see people trading in their boats like some people trade in cars, and leasing is not an option yet: perhaps in the future for younger buyers. In the meantime, you have to be able to pay for the boat plus all the additional costs such as the slip, fuel and its maintenance.
“We try to make our customers aware of what they are getting into,” he added.
“When I was younger, we’d take the boat out and be able to stock up on fish,” Haines added. “We’re not seeing that anymore because the fishing regulations have gotten tougher. If you don’t think it’s going to be a worthwhile investment, then you won’t buy a boat.”
Boating’s a Lifestyle
“The trends are up,” noted George Robinson, president of a yacht dealership in Cape May. He deals with new boats ranging from $175,000 – $500,000. He also sells used boats.
“There’s no question that fishing and boating is a lifestyle,” Robinson said. “We try to make dreams come true. While our boats are sport-fishing oriented, we have great knowledge to guide people about cruising as well.”
Robinson talked about a recent sale to a “young entrepreneur who bought a boat for fishing and traveling. He took his 8-year-old son fishing, and they caught three white marlin,” he recounted. “His son caught one of them. You know they took lots of pictures and his son will have great memories. That’s what we like to do: help make those happy experiences.”
Robinson’s buyers mostly come from Delaware, Maryland, New Jersey and Pennsylvania, but he’s also had buyers from South Korea, Europe, and Alaska. Most are over 40 years of age in higher income brackets. “Last year we didn’t see anyone younger than 40, but this year we saw that change a bit because the economy is better,” he noted.
“The number of new boat sales has increased with modest growth in numbers and value,” he said. “Our used boat brokerage is growing worldwide, but we’re limited by inventory. It’s a great opportunity if you are considering selling your boat. Used boats maintain their value pretty well.
“The industry goes up and down just like the tides,” he added. “As the economy improves, people have a more disposable income to spend on things like boats.”
Other Growth Indicators
A Wildwood marina manager, Tony Sandora, said the Atlantic City Boat Show has provided his dealership with an increase in sales this year, almost doubling this year the total boats sold the previous eight years. He can also tell business is on the upswing because of the amount of fuel sold and slips rented.
“An average July sees about 36,000 – 40,000 gallons of fuel being sold,” Sandora said. “In July 2017 we sold 96,000 gallons. This year, we had eight days of bad weather in July when you couldn’t go out, and we hit 86,000 gallons. If we had had those eight days, we would have hit our 2017 mark, if not bypassed it.
“Our service has picked up also,” he added. “We’re also at full occupancy with our slip rentals.”
The dealership sells pontoon boats, which sales manager Tom Stocker said has “become the craze, especially for families and grandparents who want to cruise with the grandkids. More people seem to be buying boats for boating rather than fishing.”
Smaller boats start about mid-$20,000 according to Stocker, and go up to more than $50,000 for a pontoon. Fishing boats range $100,000 – $120,000. “It’s been a fairly good season this year and last,” he said. “People seem to have more disposable income.”
Buyers come “from all over,” with about one-third local and summer residents.
“Take a look at the people out on the water in their boats,” Stocker urged. “They are tubing or swimming off the boat. They take their drinks and sandwiches and relax on the water. They aren’t fishing because of the tougher regulations and fuel costs.”
Holding Ground
The improving economy is also why Schellenger’s Landing dealer Ernie Utsch described this year as an “up” year regarding “everything boating. Last year we saw a small improvement, but this year I think we’ve turned the corner with the resurgence of the economy. We’ve held our ground over the past decade,” he said.
“Boats are a feel good item,” he added. “The small boaters are the most vulnerable.”
Utsch and his brother got out of the new boat business in the 1990s, when the luxury tax kicked in. He said there’s a “good, strong market” with the boats they sell, which range from about $4,000 – $200,000.
Their boating audience comes from New England to the Chesapeake Bay region. “We don’t have a typical buyer because I’ve learned that the guy in dirty pants and work boots can have a pocket full of money,” he noted. “You just can’t tell from how somebody dresses.
“Everything is up,” Utsch said, “even tackle sales. It’s good to see the resurgence of the economy.”
To contact Karen Knight, email kknight@cmcherald.com.