It's the tug-of-war most boat buyers go through as they start shopping: Should I buy new or used?

New boats come with many advantages – they're sparkling, unspoiled, rigged with the latest gear and, yes, covered by a warranty. Of course, you get all that at a much higher price. Your money goes farther when you buy used, but unless you proceed with caution, you could wind up buying the previous owner's headaches. And that can cost you bigtime.

Whatever your strategy, the concensus among industry experts is that the current economic climate represents a strong buyer's market. Marine dealers and boat brokers are struggling through one of the worst downturns since the oil-crisis days of the late 1970s, as the weak economy and rising fuel prices hammer boat sales. While many would-be boat owners are postponing their purchases, the situation may present substantial opportunities for buyers with good credit and money to spend.

Declining sales have created a buyer's market for those with good credit and enough money to pounce on bargains.

In the new boat market, manufacturers and their dealers are taking extreme steps to move hulls, throwing in things like free accessories, slips and storage, fuel and low-cost financing to sweeten the package and defend their prices. Genmar, Luhrs Group, Honda and Mercury have all launched promotions in the last six weeks.

However, even better deals may be available on used boats, where industry experts say that inventories are at historic highs and the price difference between new and used boats has perhaps never been greater. Some estimates put current used boat sale prices at as much as 30 percent below the stated wholesale values one might find in the standard valuation and blue book guides.

The result is that serious buyers who are willing to do some research and come to the table armed with information and resources may find substantial bargains available.

A BUYERS MARKET

It is hard to understate the severity of the current climate. Boaters spent a total of about $37.5 billion on boating in 2007, a five-percent decline over 2006 and the sharpest decline in a decade, according to a study by the National Marine Manufacturers Association, a Chicago-based trade group representing makers of new boats, engines and accessories. Sales of new powerboats (inboards, outboards and stern drives) declined by about 8 percent, according to the NMMA.

But the carnage has gotten worse this year, where new boat sales fell by 20 percent in the first quarter, ending March 31, following a 17 percent decline in the 2007 fourth quarter, according to the NMMA.

Sales of used boats are more difficult to peg given the dynamics of the market, but industry experts estimate sales of "preowned" boats were off significantly last year, as well.

Dealers are trying hard to scare up sales, but the best bargains may be availabe on the used market.

Of course, the downturn has not impacted all segments of the market in the same way. For example, unit sales for boats with outboard engines fell below 200,000 in 2007 for the first time in nearly a decade. Inflatable boats, on the other hand, saw unit sales increase in 2007 and the retail value of those sales more than doubled. Similarly, brokers and dealers report that smaller boats are seeing the most significant sales declines, while larger boats – which generally attract wealthier buyers – have continued to sell.

But most experts agree that the slowdown in sales is serious and that the industry is in for a prolonged stretch of rough weather. As a buyer, keeping up on market conditions in general, and for the type of boat you plan to buy in particular, gives you a sense of the playing field and a feel for the situation faced by most sellers, whether they are private parties, manufacturers, brokers or dealers.

Though sales information on specific manufactures and models is scarce, information on the market in general is made availaable by NMMA, in the form of an annual study called the Recreational Boating Statistical Abstract. Though a copy of the full study costs several hundred dollars, helpful excerpts can be found on the NMMA website and elsewhere online, including on Mad Mariner. (For tables of industry sales figures and boat sales by type, see links.)

When it comes to new boats, most dealers have done a good job of keeping inventories lean. They receive generous financing terms that allow them to avoid making principal payments on boats in inventory for as long as six months. (For a story on how dealer financing works, see link.)

Used boat inventories, on the other hand, are handled very differently.

Brokers and dealers often buy used boats out of their ready cash, or receive them as trade-ins for new boats. They spend very little on upgrading them and they want to move them quickly to reduce the costs associated with maintenance, dockage or storage and fuel. They are also competing with all of the other used boats on the market. While a salesperson may bargain on a new boat, they may do so far more aggressively on a used model.

"It's definitely a time when people who have ready cash can get some bargains," said Caroline Ajootian, assistant vice president and director of consumer affairs of BoatU.S..

"There are a lot of people who are pressed for money in this economy, and they are giving up their boats," she said. "So, there are bargains to be had if you can afford to take on some extra debt or you have the cash to pay for it outright."

WHAT'S IT WORTH?

Perhaps the biggest challenge used boat shoppers face is determining what to pay. Pricing on any one boat model can vary widely, according to the condition of the vessel and its engines, the equipment onboard and many other factors.

Start asking the question "how much is this model worth?" and you will get the inevitable answer, "whatever someone is willing to pay for it." However, unlike the real estate market, where comparable sales, or "comps," are a ready source of information for buyers and sellers, obtaining current sales data on a particular model of used boat is a difficult thing.

While the best resources to value a boat are tough to access, there is much that is publically available.

YachtWorld.com maintains a database of sales that is fueled by contributions from brokers and dealers, and this is widely cited by industry insiders as the best source of sales and valuation data on the market. However, it is available only to marine professionals, and not for public consumption. If you have connections – a friendly broker, dealer or surveyor – who can gain access for you, this may be a tremendous help.

If not, there is still a great deal of information available on the Internet to help educate buyers. For starters, you can see what people are asking for any given model. YachtWorld.com, Boats.com and a score of other used boat sites have up-to-date listings and detailed search tools that will allow you to pull up multiple listings for a given model. As long as you are comparing like boats – the same model year, engine configuration, rigging and soforth – this should provide a realistic price range. Of course, those are asking prices, but they provide a basic framework.

There are also the so-called "blue book" services that provide valuations according to model, year and equipment. The BUC Guide and the NADA Guide are the two most often used, and both are available in book form as well as online.

BoatU.S. also has an online service which Ajootian said helps shoppers determine the right price to pay. From the organization's website (www.boatus.com) shoppers can check online for what Ajootian said are up-to-date values on used boats. The information is gathered by sampling dealers and brokers and pulling together information from BoatU.S.'s insurance and finance operations.

Once you've completed your research, experts say it is still best to come in with a low offer.

"It's relatively easy to research what is a good price," said Paul Squire, owner of SIMEX International Marine Surveyors and Consultants, in Fort Lauderdale, Fla. "And of course in a buyer's market…I would come in at about 60 percent of the asking price and start dickering from there."

PRIVATE PARTY SELLERS

Of course, who you are sitting across the table with can have a huge impact on price, and there are many sources of used boats that do not involve a broker or dealer.

One source that has becoming increasingly popular is the repo market. Tough times usually lead to increases in boat repossessions, either because owners default on loans or because they make the difficult choice of letting go of the boat and turning the keys over the lender.

Banks hire repossession companies, such as National Liquidators (www.yachtauctions.com), to take boats back from owners. Liquidators in turn sell them through auctions, which often are posted on their websites. With repo inventories increasing this year, prices are coming down. Typically, liquidators don't have as much bargaining room on price as other sources, and an auction situation means you may be competing directly with other buyers. But industry experts say there are good deals available.

Boating industry research shows that the vast majority of used boats are sold by current owners, or so-called private-party sellers. There are both advantages and disadvantages to buying a boat directly from the previous owner. On one hand, you are dealing with a boater – not a company or a salesperson – and that person likely knows the boat well. In an amiable transaction, that can be a substantial asset.

On the other hand, used boats typically are sold as is. Private sellers rarely are required to disclose issues with a boat, although state laws typically do require dealers and brokers to be upfront about problems with used boats. That means it is up to you and your surveyor to determine any problems and adjust the price accordingly – or walk away.

No matter who you buy from, experts advise that in today's market, it's best to buy locally.

"Someone in New York will see a boat for sale in Florida and it's at a great price and think, ‘What the heck, we'll buy it and ship it up here. If it costs me $3,000 to do it, who cares, I've saved more than that," Ajootian said. "But it's better to buy locally because that way, six months later if something goes wrong, the seller is going to be there."

GETTING A MARINE SURVEY

Experts also advise that you get a marine survey on all but the smallest boats. Used boats can look pristine on the outside and have problems inside. Surveyors are to boats what home inspectors are to houses. They are pros at uncovering hidden issues, as well as those that are right on the surface. For boats that are longer than 22 feet, surveys are almost always a good idea. (For a story on surveys, see link.)

On all but the smallest boats, the peace of mind that comes with a survey is usually worth the expense.

"If it's a small boat and you've been boating for 40 years and you know all about boats, you probably don't need a survey; especially if it's for something that's less than $10,000 and not a huge investment," Ajootian said. "For novices, or for someone for whom the cost of the boat represents a significant investment, a survey is really important."

If you're financing a boat, especially a larger model, the lender in most cases will require a survey to insure the quality of the boat. In fact, Squire said results from a survey can be used to dicker further on the price if undisclosed issues are discovered – just as they are in the real estate market. He also recommends contract terms that specify that completion of the deal is contingent upon the completion of a thorough survey.

"What you have to look at is the structural aspect of the boat," he said. "Looking at the insides of boats these days is more and more difficult because they're all built with liners." The result is that you cannot just lift up the seats or a few plates to check hull integrity, he said.

Most states don't require marine titles to disclose whether a boat has been salvaged or wrecked. Scores of boats were damaged during the hurricanes in recent years and some were simply patched up and rotated back out onto the market, with the damage hidden. A survey, the experts say, is likely to reveal that. (For a story on salvaged boats, see link.)

In searching for a good surveyor, start by choosing one who is a member of one of two surveyor trade groups: the Society of Accredited Marine Surveyors Inc. (SAMS), in Jacksonville, Fla., or The National Association of Marine Surveyors (NAMS), in Chesapeake, Va. After that, do some due diligence. Price recommends selecting a surveyor who is experienced with the particular type of boat you're interested in. And, of course, get some referrals.

Ajootian warns against using surveyors that are recommended by a dealer or broker. "You want to have someone who is completely independent," Ajootian said, adding that you also want to be sure to sea-trial the boat. BoatU.S.'s website lists recommended surveyors in various markets. "We have screened them, and we have criteria they have to meet," she said.

Even at a great price, there's more to the cost of owning a boat than just the purchase. Insurance, fuel, maintenance and, of course, if you're buying a boat that requires a slip, dockage, can easily run up the tab. Even smaller boats these days typically are stored in dry-stack facilities at marinas and boat yards, which adds to the expense.

Financing too needs to be considered, for buyers who plan to borrow, as do tax consequences. All are costs that buyers should factor in when weighing a deal, and there are online resources such as worksheets and loan calculators available online to help keep it organized.

While no one knows how long the current market will last, the prices available may offset some of these additional costs. And for buyers with the right set of circumstances, now may be the time to act.

Gary Beckett is the former editor of Soundings Trade Only.