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.