Definition
Part-exchange is a trade-in arrangement in which the buyer's existing tender or chase boat is valued and credited against the price of a new build or a different used vessel.
Background and use
Part-exchange is more common in tender and chase-boat purchases than in full yacht transactions, partly because the asset values are within a range the dealing yard can comfortably take onto its own balance sheet. A typical structure: the broker or builder values the trade-in against current market evidence, agrees a net allowance, and the difference becomes the cash price for the new boat. The trade-in then enters the dealer's used inventory, often after a light recommissioning.
For owners, the appeal is convenience. Selling a tender on the open market takes time, requires presenting the boat in season, and usually involves a condition survey and broker fee. A part-exchange clears the slot in the garage immediately and removes the carrying cost of running an unsold asset across the close season. The trade-off is price: dealer trade-in valuations sit roughly 10 to 20 percent below what a private retail sale would deliver, since the dealer is taking on the inventory risk.
We typically run a quick comparative analysis for clients: open-market sale versus part-exchange, net of fees and time-to-cash, before committing to either route.
Related considerations
- Trade-in value is usually settled in the same MOA as the new purchase.
- VAT treatment can differ between trade-in and outright sale; check before signing.
- Dealers prefer trade-ins on brands they already represent.
- A pre-trade survey protects both parties on undisclosed defects.
- Part-exchange works best when the trade-in is under five years old.