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Author Topic:   Want's it worth? 2001 90 Merc

John O posted 11-15-2002 06:37 PM ET (US)
Hate to open this can of worms but I would appreciate some feedback. Found a Merc 90 hp 2 Stroke Salt water series. Told it was used once(1) in ocean and 4 times in lake by original owner who is selling due to cash problems. Selling with or with out controls. Claims less than 60 hours. I currently have bad Johnson 88 on my newport so I will need rigging. Will see this wekend otr next week. Can also purchase extended warranty.
jimh posted 11-16-2002 11:58 AM ET (US)
John, I have read your posting a couple of times, but I don't see a question in it.
I assume you are asking this question:
"Given a recent model engine that is still in production and whose price is widely known, what is the value of that engine after 60 hours use."
To answer your implied question, I would suggest that the moment any outboard engine is sold, bolted on a transom, and put into service, it experiences a significant decline in value. The precise amount of lost value is hard to specify, but I would guess that it is at least 15-percent of the original "selling price".
The actual selling price is often hard to know with precision. There is the "list price", the "discount price", the "bundled with the boat deal" price. You should base you calculations on the price that you could buy a new engine from an authorized local dealer.
For an engine (like a Mercury 90-HP 2-stroke) that sells for approximately $5,000, the decline in value after 60 hours use would be at least $750.
You should also consider the loss of warranty coverage. The engine you mention is three model years old, and the warranty period is probably expired. Buying additional warranty coverage will increase your costs. It may cost more than $750 (the decpreciation amount in this case) to obtain the same warranty coverage you would get for a new engine purchase.

Dick E posted 11-16-2002 05:51 PM ET (US)
New engine in the box with warranty $4500-$4700.
I would say $3000 to $3200 is what it's worth.
I have a 1998 merc 90 hp . No problems- a good engine.
John O posted 11-16-2002 05:54 PM ET (US)
Thanks for the comments on "What's it worth?"
I am trying to get some feedback on what this motor may be worth. Thought the question was stated clearly, but based on the lack of feed back it seems to need more clarity.
frank_king posted 11-16-2002 09:06 PM ET (US)
i work at a mercury dealer and have ridden in a montauk with the motor in question. it is a nice motor for the boat. if the situation wasn't based on money i would have gotten a 3 cyl 90 2 stoke and put on my boat. price is set at how much the seller has to get for product, and how much buyer will pay. case by case
whalerron posted 11-16-2002 11:26 PM ET (US)
What is it worth? Whenever you buy something used, you run the risk of buying somebody else's problem. Because of that risk, we expect the sell price to be low enough to offset the associated risk. The real question is how much would you be willing to pay to avoid that risk. That amount is then the discount between the price of that engine new and its price used.
Assume you would be willing to pay $1000 to avoid the "used risk". If he is asking $3800 for the motor and it can be had new for $4700, the difference is $900. Since you are willing to pay $1000 to avoid the "used risk", he is asking too much and you should look elsewhere. If he is only asking $3000, the used/new difference is $1700. This is more than your risk value so the engine might be worth the $3000 to you.
I think this is why it is so hard to pin down the price on used motors. Everyone has a different "used risk" value that they are willing to deal with.
jimh posted 11-17-2002 09:39 AM ET (US)
The depreciation curve for outboard motors is a strange one. I originally thought that the value of a used outboard motor would gradually decline with use and age, but in my own non-scientific experience, it appears that is not the case.
It seems that as long as an outboard engine is still in good working condition, it retains a significant amount of its value.
Consider the value of a 90-HP Mercury 2-stroke, the engine mentioned in the start of this discussion. The new cost is about $5,000. This engine has been in production for some time, so it is likely we could locate a 10-year-old model in good condition.
What would be the value of this older engine?
I suggest that you could probably buy one for about $2,000.
At that price, the engine has experienced $3,000 depreciation in ten years. In fact, however, it has depreciated less than that because its original selling price was lower ten years ago than the current pricing today. It probably sold originally for about $4,000, and thus it has only decpreciated about 50-percent in ten years. That is only five percent per year, not a bad rate of depreciation.
The other observation I have made on the depreciation curve is that once you get to this point, the value does not depreciate as fast. As long as the engine stays in good running condition, it seems to hold it used value fairly steady.
Who buys 10-year-old outboards? For many people it is not a question of preference or acceptance of higher risk of failure, but more a case of simple cash flow. People want to go boating, and if you only have $2,000 in your wallet, you get a 10-year-old engine.
whalerron posted 11-17-2002 10:42 PM ET (US)
jimh, you have raised a good point and
Bob Kemmler is proof of that point. He is in the process of a "proof of concept" conversion of a Rage jetdrive to a Rage Outboard drive. When he bought the outboard for that boat, age was no barrier. He just wanted a motor that ran well and that met his low price. He just wanted an engine to get him going on the water. If things work out well, he will probably run the motor til it dies and then upgrade to a newer model.
Bigshot posted 11-18-2002 09:46 AM ET (US)
I posted a new 75 merc(same engine but 15 less hp. for 43995. I would assume with controls etc that $3k would be fair. Ask a Merc dealer if they can download hours from it. Some 2S you can.
kgregg posted 11-18-2002 10:14 AM ET (US)
One can always use http://www.NADAGUIDES.COM to value outboard motors (click "boats" tab at the top, "outboard motors" and enter make, year, model info). Kevin

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Author	Topic: Want's it worth? 2001 90 Merc
John O	posted 11-15-2002 06:37 PM ET (US) Hate to open this can of worms but I would appreciate some feedback. Found a Merc 90 hp 2 Stroke Salt water series. Told it was used once(1) in ocean and 4 times in lake by original owner who is selling due to cash problems. Selling with or with out controls. Claims less than 60 hours. I currently have bad Johnson 88 on my newport so I will need rigging. Will see this wekend otr next week. Can also purchase extended warranty.
jimh	posted 11-16-2002 11:58 AM ET (US) John, I have read your posting a couple of times, but I don't see a question in it. I assume you are asking this question: "Given a recent model engine that is still in production and whose price is widely known, what is the value of that engine after 60 hours use." To answer your implied question, I would suggest that the moment any outboard engine is sold, bolted on a transom, and put into service, it experiences a significant decline in value. The precise amount of lost value is hard to specify, but I would guess that it is at least 15-percent of the original "selling price". The actual selling price is often hard to know with precision. There is the "list price", the "discount price", the "bundled with the boat deal" price. You should base you calculations on the price that you could buy a new engine from an authorized local dealer. For an engine (like a Mercury 90-HP 2-stroke) that sells for approximately $5,000, the decline in value after 60 hours use would be at least $750. You should also consider the loss of warranty coverage. The engine you mention is three model years old, and the warranty period is probably expired. Buying additional warranty coverage will increase your costs. It may cost more than $750 (the decpreciation amount in this case) to obtain the same warranty coverage you would get for a new engine purchase.
Dick E	posted 11-16-2002 05:51 PM ET (US) New engine in the box with warranty $4500-$4700. I would say $3000 to $3200 is what it's worth. I have a 1998 merc 90 hp . No problems- a good engine.
John O	posted 11-16-2002 05:54 PM ET (US) Thanks for the comments on "What's it worth?" I am trying to get some feedback on what this motor may be worth. Thought the question was stated clearly, but based on the lack of feed back it seems to need more clarity.
frank_king	posted 11-16-2002 09:06 PM ET (US) i work at a mercury dealer and have ridden in a montauk with the motor in question. it is a nice motor for the boat. if the situation wasn't based on money i would have gotten a 3 cyl 90 2 stoke and put on my boat. price is set at how much the seller has to get for product, and how much buyer will pay. case by case
whalerron	posted 11-16-2002 11:26 PM ET (US) What is it worth? Whenever you buy something used, you run the risk of buying somebody else's problem. Because of that risk, we expect the sell price to be low enough to offset the associated risk. The real question is how much would you be willing to pay to avoid that risk. That amount is then the discount between the price of that engine new and its price used. Assume you would be willing to pay $1000 to avoid the "used risk". If he is asking $3800 for the motor and it can be had new for $4700, the difference is $900. Since you are willing to pay $1000 to avoid the "used risk", he is asking too much and you should look elsewhere. If he is only asking $3000, the used/new difference is $1700. This is more than your risk value so the engine might be worth the $3000 to you. I think this is why it is so hard to pin down the price on used motors. Everyone has a different "used risk" value that they are willing to deal with.
jimh	posted 11-17-2002 09:39 AM ET (US) The depreciation curve for outboard motors is a strange one. I originally thought that the value of a used outboard motor would gradually decline with use and age, but in my own non-scientific experience, it appears that is not the case. It seems that as long as an outboard engine is still in good working condition, it retains a significant amount of its value. Consider the value of a 90-HP Mercury 2-stroke, the engine mentioned in the start of this discussion. The new cost is about $5,000. This engine has been in production for some time, so it is likely we could locate a 10-year-old model in good condition. What would be the value of this older engine? I suggest that you could probably buy one for about $2,000. At that price, the engine has experienced $3,000 depreciation in ten years. In fact, however, it has depreciated less than that because its original selling price was lower ten years ago than the current pricing today. It probably sold originally for about $4,000, and thus it has only decpreciated about 50-percent in ten years. That is only five percent per year, not a bad rate of depreciation. The other observation I have made on the depreciation curve is that once you get to this point, the value does not depreciate as fast. As long as the engine stays in good running condition, it seems to hold it used value fairly steady. Who buys 10-year-old outboards? For many people it is not a question of preference or acceptance of higher risk of failure, but more a case of simple cash flow. People want to go boating, and if you only have $2,000 in your wallet, you get a 10-year-old engine.
whalerron	posted 11-17-2002 10:42 PM ET (US) jimh, you have raised a good point and Bob Kemmler is proof of that point. He is in the process of a "proof of concept" conversion of a Rage jetdrive to a Rage Outboard drive. When he bought the outboard for that boat, age was no barrier. He just wanted a motor that ran well and that met his low price. He just wanted an engine to get him going on the water. If things work out well, he will probably run the motor til it dies and then upgrade to a newer model.
Bigshot	posted 11-18-2002 09:46 AM ET (US) I posted a new 75 merc(same engine but 15 less hp. for 43995. I would assume with controls etc that $3k would be fair. Ask a Merc dealer if they can download hours from it. Some 2S you can.
kgregg	posted 11-18-2002 10:14 AM ET (US) One can always use http://www.NADAGUIDES.COM to value outboard motors (click "boats" tab at the top, "outboard motors" and enter make, year, model info). Kevin