Importing boats

By: Norman Holtzhausen

Thinking of importing from the US? It might be an option if you’re after a boat you simply can’t get here for the price you’re willing to pay. But there are hidden costs and pitfalls among the benefits of doing so. Norman Holtzhausen takes a closer look.

Importing boats
Importing might be an option if you’re after a boat you simply can’t get here for the price you’re willing to pay.

It can be very tempting to sit in front of your computer browsing through boats for sale in other parts of the world. Each region seems to have their speciality, and what is unpopular (and cheap) in one part of the world, particularly the USA, could command a premium here. With a strong Kiwi dollar, perhaps it would make sense - even allowing for the transport costs - to bring a foreign boat over to New Zealand.

Let's have a look at the economics first. For this we need to find a good example. We need a model of boat currently available for sale in both the USA and New Zealand. A Wellcraft 290 Coastal fits the bill. At 8.8m (29ft), this is an American-made, fully-moulded fibreglass production model, proven popular in New Zealand. Generally powered by twin outboards, these are luxuriously equipped bluewater boats.

There are relatively few New Zealand-made production boats of similar specification, so bringing in a boat of this size could certainly make economic sense. An extensive search on the internet revealed just one Wellcraft 290 Coastal currently for sale in New Zealand, while we found well over a hundred in the USA. These ranged in price from US$232,000 for a brand-new 2013 model, down to US$35,000 for a 1999 version.

The only model currently available in this country is a 2004 vintage with an asking price of $149,995. This boat has twin Mercury 250hp four-stroke Verado motors and is kept on a marina berth. It has just had a substantial service and upgrade done to it, so is in tip-top condition.

Looking for a similar spec model on reveals a 2005 version of the same boat, located in Florida. This boat has twin Yamaha 225hp four-stroke motors, and is similarly well appointed and in immaculate condition. The asking price is US$69,900 (NZ$85,257). Although the motors are a slightly different model from the New Zealand one, the boat is a year younger and hence we will regard these two as equivalent for the purpose of a cost comparison. At first glance it looks like this idea makes commercial sense - an equivalent boat for a saving of $64,738 or 42 percent.

Things to consider

Obviously freight is going to be the biggest extra cost. Luckily there's a couple of companies specialising in shipping large items, typically boats, cars and motorhomes, from the USA to New Zealand. One such company is Taurus Logistics, based in Christchurch. They will handle all the export paperwork, such as customs charges, port charges, MAF (MPI) inspections and so on, and will provide an instant online quote if you know the boat dimensions and weight.

Taurus points out there are a couple of  things greatly influencing the shipping costs. A boat shipped from the West Coast of the USA will obviously be cheaper than one shipped from the East Coast. Boats without their own trailer, such as this one, will require a temporary cradle. These can cost several thousand dollars. It may be worth sourcing a trailer in the USA as part of the deal, but make sure it will meet with New Zealand regulations.

Looking at our Wellcraft example, we find the vessel is currently on the East Coast and doesn't have a trailer. The brokers have quoted US$3513 (NZ$4285) to ship it from Florida to Los Angeles, which seems fairly reasonable. Taurus estimates the shipping cradle needed will cost $2800 to build. When these are added to the other shipping and customs costs, we get a total shipping cost of NZ$28,530.

There are one or two other hidden costs also needing to be factored in. Some states charge a 7.5 percent export duty on boats, but luckily Florida isn't one of them. Of course, when it lands in New Zealand 15 percent GST is payable, and this is based on the total costs, i.e. the purchase price plus any US-based shipping costs. There is also a five percent import duty, again based on the total costs including shipping. So a further $22,757 is added, bringing the total landed cost to $136,544 - considerably more than the original purchase price, but still a sizeable saving on the locally available model. Of course, our example does not take into account the ability to negotiate a lower price with the local seller, and hence the actual cost differential may be less.

Savings and pitfalls

Unfortunately, in the last few years it has become considerably more difficult to find a bargain in the second-hand market since the global financial crisis has forced several major US boat manufacturers out of business. Finance for a boat is now considerably more difficult to obtain over there, resulting in surviving dealers often selling second-hand rather than new models. The strong Australian dollar means our neighbours have also cottoned on to importing boats, helping to push prices up even further.

Well-priced second-hand boats are therefore hard to find and good ones sell fast.
We had an opportunity to speak to someone who has just been through the exercise. Late last year, Carl imported a Wellcraft 330 Coastal with twin Yamaha 300hp outboards, and he estimates he saved up to 30 percent of the cost of buying an equivalent model here. However, a prime reason for his choosing this route was he could not find his chosen model anywhere in New Zealand, and hence his options were to accept a different boat or import one. Carl originally intended to complete the whole process himself, but says in the end the legal requirements and paperwork proved too onerous and he called in the experts at American Boats Direct, based in Bayswater, Auckland.

After chatting to Carl, as well as Lindsay Thatcher of American Boats, we learned there are a number of pitfalls. Both mentioned the biggest danger, namely of losing your money to a scam. The most important first step when buying a foreign boat is to get someone to view the boat and confirm it actually exists, is in the condition stated and the seller has clear title. This can only be done by someone on the ground, and could mean budgeting for a trip to the USA to view the boat if you can't get someone trustworthy to do it for you.

Thatcher mentioned they have two full-time buyers based on the West Coast of the USA, and their buyer can view the boat, undertake due diligence and handle the purchase arrangements. Often they are able to negotiate a discount equaling or exceeding their cost, making it a no-brainer to go this route. You don't want to be a statistic of non-existent boats being sold to multiple buyers, the seller disappearing with the money, or of those subjected to buying a boat with an outstanding finance commitment.

Shipping costs

The best way to bring a boat over is inside a container, and a typical shipment takes three to four weeks. However, for an individual importer this may not be feasible, because a larger boat may not fit or may require specialised handling to package it on its side (containers are higher than they are wide, and many boats are wider than the 2.4m interior width of a standard container). Even if the boat does fit, you end up paying the full cost of the container even though more than half the volume is empty.

Companies like American Boats are experts at this process, and Thatcher says they can fit up to four trailer boats inside one 40-foot container.  With the freight on the whole container coming in at around NZ$12,000, dividing this up by four makes this a much more economical proposition. This saving alone makes it worth working through a specialist importer.

Getting it right

Thatcher also warns against considering  boats unable to fit into a container. As we saw with our Wellcraft 290 example, bringing a bigger vessel over as deck cargo is several times more expensive than the cost of a container, and could possibly wipe out the whole cost saving. He suggests talking to your shipping agent before even looking for a boat, so you know what the limitations and costs are up front.

Another consideration when importing larger boats is the wiring. Anything wired for mains voltage will need to be replaced when it arrives.  The Americans use 110V, whereas most of the non-American world has standardised on 220V.

It goes without saying the boat should be fully insured for the entire journey. Many things could go wrong, on the road, at sea or in port. There's a high possibility it could sustain some damage so make sure you have comprehensive photos of the vessel taken before it leaves the broker's yard to back up any claims afterwards.

Thatcher also says the location the boat is coming from is important, and not just because of the extra shipping costs - there are more boats available on the East Coast (primarily Florida) and they tend to be cheaper. However, these will likely be in worse condition due to the high humidity, a greater amount of sunlight hours and the salt-water environment. The better boats tend to be those from the West Coast, due to the fresh water usage.

Remember to always keep some funds in reserve. There are numerous reasons for delays, and every day the boat sits in port costs extra. When it arrives there could be additional costs imposed by MAF if they deem a full clean necessary, and additional customs charges are also possible.

So, if you have done your homework, worked with the experts and found your dream boat, it should not turn into a nightmare to get it to New Zealand. Thatcher points out most people only ever do this once in their lifetime so it's worth getting it right. h

To learn more, give American Boats Direct a call on 09 455 1020.

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