Caveat Emptor- Latin phrase anyone importing a boat should understand

by Bob Wonders on 5 Dec 2010 There’s been quite a bit of talk recently about ‘grey imports’, in other words boats imported, most commonly from the United States and shipped in by either individuals, brokers or even, in some cases, marine dealerships.

Quite often, these boats have been sourced from bankrupt dealerships or brokerages, or perhaps from US dealers overstocked on some models.

With the current strong Australian dollar against the US greenback, I guess one can’t blame people for trying to obtain the boat of their dreams at an affordable price, but believe me, it really is a case of Caveat Emptor, loosely translated, ‘let the buyer be aware.’

The bottom line is this – a US-built boat imported directly from the USA cannot be dropped straight into the water and used in Australia.

Recently, respected colleague John Heselwood, an editor with the leading publication ‘Go Boating’, took a close look at the grey import situation.

With the cooperation of himself and his publisher, we present his article here; it’s highly recommended reading for anyone thinking of playing importer.

Think Twice before Importing that Boat!

Seems an increasing number of people are trying to bring boats in from the States these days and with the dollar the way it is at the moment, you can't blame them for thinking about it. And thinking about it they should… twice!
Imported boats from all parts of the globe are a big part of Australia's marine industry.

Distinctive Boat Imports (DPI) is a West Australian owned and operated company who specialise in the import of late model boats made in the USA by America's premier manufacturers. I want to point out at this stage that this article is not meant to be advertorial for the company but advice for our readers.

DPI receive a lot of enquiries wanting to know if they import boats for people who have found one online. Most of these people want DPI to assume all the risk of importing their boat for a minimal fee and then give them full retail service, warranty etc. If there is something wrong with the boat that they found and bought, then they expect DPI to accept blame and not the buyer.

Distinctive Boat Imports now represent Key West Boats USA in Australia, dealing in their large range of new boats. They now import very few second hand boats; in fact it is less than ten per cent of their business.
'We've imported a lot of boats and gained considerable experience in the process and the truth of the matter is, it's a lot harder and more expensive then it appears on the surface,' said Regan Whitby, Dealer Principle of DPI.

'The main motivation for us to get a top quality new boat dealership was when we came to the conclusion that it was impossible to get a regular supply of good condition, used boats. We flew to the States, got a rent-a-car and went around to dealerships, obtained dealer membership and went to dealer only auctions with full boat inspection reports.

'We also have a couple of really knowledgable boat guys on the ground in the US who have wider contacts in the boating world there. Even then we can't find what we consider good condition boats easily. And the situation has only become worse because the sale of new boats in the US has dropped by 80% or so in the last couple of years. Hence the supply of quality used trade-ins has dropped by a similar amount.'

They have been to auctions and liquidation sales in the US and have seen what looks like a great boat on the net the day before, turns out to be a rough, tired, stripped money burner when you stand next to it.

You can't see the hull stress cracks in the pictures, you can't see the mildew in the cabin or carpet. People who couldn't afford to keep up the payments on their boat certainly do not have the money to look after and maintain it and as they know the repo man is coming, they couldn't care less either. In fact they almost always strip it of every electronic device and sometimes even the outboard! The nice stainless prop has been replaced with anything that fits, wrong pitch, size whatever!

Now that's just finding the boat. When you do, you have to convince the guy you don't live in Austria, you do in fact speak English and to please give you an invoice without state taxes applied. Those interviews you see on U-Tube where they can't find Australia on a map of the world are true. Don't ask him to transport it to your required port out of his home state, he'll just hang up.

'What about a marine surveyor to check the boat out? Sounds like a good idea, we did that on one of the boats we bought from a so called reputable dealer as well. The survey was fine, great boat according to that good old boy, trouble was he must have been blind in one eye and half in the other. Worse boat we ever bought. Cost us a lot of money to put right,' said Whitby.

'Honestly, buying a boat over the internet, sight unseen, based on a seller's so-called truthful description, is akin to Russian roulette. You might as well take your money down to the casino and roll the dice a few times, at least you have a chance of coming out in front.'

So let's assume you buy your boat and are able to pay for it. Then you need to transport it to a port that loads boats for Australia. Towing a boat through a couple of states gets expensive. Preparation for shipping, cleaning, shrink-wrapping, all add $300 here and $350 there.

The sea freight rates are not fixed and are based on the freight agent you are booking through. Rates of US$150/m3 plus 10% BAF (Bunker Adjustment Factor) are fairly common especially if you are only bringing in one boat. The cubic calculation of your boat is based on the longest point from the front of the trailer to the back of the raised outboard, widest point of boat or trailer and the highest point, even if it is an aerial or guide pole. Even a small boat can cube out to 50m3 and land you a bill of US$8000 plus. Fees in Australia for clearance, quarantine etc. usually exceed $2000 plus 10% GST on the total including freight.

We haven't even spoken about trailers and that is where 99% of boat importers come foul of the law. Whilst the boat regulations in this country are ridiculously lax with no inspection of boats for seaworthiness for first registration, trailer regulations are covered under road transport and they are strict. Suffice to say that nine out of ten used American trailers never get registered in Australia without major modification to the point where you would be better to buy a new trailer in the first place than deal with all the grief and expense involved in getting a used one modified and across the pits for inspection. Then at the end of all this cutting and chopping, how well is your trailer going to tow?

So it's been close to three months now since you bought your boat, you finally get to see it and take it out.

'Mate of mine who went through an import broker assumed it was all A1, because he had been told it was and he took the guy at his word,' Whitby explained. 'There was a problem with the live bait well plumbing. It was quietly pumping water into the hull, 300 litres later they realised something was wrong but luckily found the problem, turned it off and got the bilge on. Luckily that was working.

'The boat went like a dog, took forever to get up on plane. Quite a bit of money later on parts, engine servicing, new correct prop, it went okay.'

The whole import process had taken four months plus the time to sort the boat out. It cost way more than what he was led to believe and ended up with an average boat that he didn't really like and ended up selling.

Ironically if he had gone to a dealer such as DPI he could have looked over a few different boats, sea trialled them, got a fully fitted out boat with safety gear, registered boat and trailer and warranty all for about the same money. Of course he wouldn't have had the satisfaction of telling his mates, 'I imported my own boat from the States, I'm hard core, I'm a legend....'

'Now most people will dismiss everything I've said because it isn't what they want to hear,' says Whitby. 'They want to hear that it's easy, anybody can do it, just choose the first boat you like off ebay and ship it on down and save a fortune! Well that's their choice, I've done my best to help them by explaining the reality.'

www.goboating.com.au