For as long as he can remember, Jeff Hammond, the owner of Boattest.com, has leased the luxury automobile he drives. He always thought that leasing would work for high-end boats, but it wasn’t until recently that he came up with a way to make that happen.
“Dealers told us they had been trying to figure out how to make leasing work and the way to go is to fractionalize the lease,” Hammond told Trade Only Today, after announcing a new venture, BoattestLeasing. “By taking unused days and leasing them, it makes use of an expensive asset. A person who buys a boat can get someone to help him make the payments.”
Basically put, BoattestLeasing is a management service that helps a boat owner lease his boat to fractional users. Lessees make a down payment and then a monthly lease payment to reserve a pre-set number of days per year. The term of the lease is four years.
“If the owners are realistic about everything, it will work and, at the end of 48 months, much of the boat has been paid for,” said Hammond.
Being realistic means admitting how often an owner actually uses a boat. According to NMMA statistics, the average boat is only used about 25 days per year. Additionally, in a statement, BoattestLeasing said that 31 percent of the luxury automobiles on the market today are leased compared to 9 percent 20 years ago. NADA also statistics say 70 percent of the growth in expensive automobile sales comes from leasing.
“Marinas are always full because for an average of 340 days, the boat’s not being used,” said Hammond.
In a survey of Boattest.com members, Hammond said, “43 percent say they are ready to lease a new boat and 75 percent say they will seriously consider it.”
While boat-rental membership clubs like Freedom Boat Club focus on smaller, lower-priced boats, BoattestLeasing is designed for more expensive luxury models. “We are only going to manage boats that are premium, larger boats from 25 to 38 feet,” said Hammond. Additionally, the engines can’t have more than 25 hours on them and the boat must be located near a large population center.
Unlike rentals that are only available for a day at a time, BoattestLeasing customers can reserve the boat for overnight trips. Additionally, there is no limit on the hours a lessee can use boat during the four years. Automotive leases usually have annual mileage limits.
“If it meets those criteria, we will market and manage the boat,” said Hammond. He has hired marine-industry veteran David Aldrich as general manager of dealer sales. Aldrich has worked for the Freedom Boat Club and Dream Yacht Charters and was a regional sales representative for Regal, Chris-Craft, Sea-Doo and other brands.
The first boat in the program is a Pursuit DC 266 powered by twin Yamaha outboards. It’s located at a marina in St. Petersburg, Fla., and the boat is on a lift so the bottom doesn’t need to be painted.
Four levels of leasing are available. A Platinum lease requires $9,995 down with monthly payments of $927. For this, the lessee gets 8 weekend and holiday days and 17 weekdays per year. Sign up for Gold and the down is $7,995 with a monthly charge of $718 per month. The user gets 6 weekend and holiday days and 14 weekdays per year. Put down $6,995 and pay $645 per month in the Silver plan and you get 20 weekdays per year while a $5,995 up front charge and $552 per month gets a Bronze member 20 winter weekdays.
The boats are privately owned, but BoattestLeasing pays for the maintenance, slip, marketing and insurance. A maximum of eight leases is available per boat. The boat owner gets a percentage of the down and monthly payments. Hammond said the lease covers the depreciation. The service is also working with dealers because the program can help reduce the cost of ownership. When a dealer enrolls, he gets a commission for every lease he produces.
“We take over control of the boat for the owner to provide him income, reservation and maintenance,” said Hammond. “There are a lot of people who don’t want the hassle of ownership.”