Negotiation on New Outboard Engines

[PJMSport15MY1984]

Hello Fellow Whaler Junkies; what generally is the percentage dealers can negotiate on new outboards? My wife and I are looking at the Yamaha F70. We would, ultimately, love to find a used one, but due to the fact this outboard is so new, we might have to buy a new one. Thanks in advance for all of your replies. Take it easy--Paul

[The topic has been moved to THE GAM for discussion--jimh]

[Jefecinco]

Are you going to install the motor or do you need the installation to be done by the dealer? You could save a minimum of the dealer's price to install by doing it yourself.

If you do the installation it really does not matter where you buy the engine. You can contact every dealer withing a one or two hundred mile radius to find the best price. Once you have a more competitive price you can give the closest dealer an opportunity to meet or beat that price. It's probably smart to buy locally from a well regarded dealer for the good will that generates. That dealer will probably be the source of any future repair or warranty work and any annual service you need above your skill level. For that reason you may feel it worthwhile to pay a small premium locally.

As to bargaining in the cold, I would offer a cash deal for a 20% discount and go from there. Ask for added services during the process and offer to meet a price if it includes rigging or a propeller or a factory supported extended warranty or discounts on those things. Use your imagination and try to have a little fun during negotiations.

[PJMSport15MY1984]

Butch--thank you for responding. Here is the dilemma for re-powering our old Whaler. We live in a suburb about forty miles north of Seattle, Washington. Portland, Oregon is about 210 miles away, and they are a sales-tax-free state. The sales tax on a Yamaha F70 purchased in Washington state with controls, wires and a tachometer is anywhere between $790 and $960 depending on how much you pay for the outboard. As you can see, this is quite a large sum of money especially when it can be avoided since we have already paid sales tax on the boat when we first purchased it seven years ago. Outboards are not registered in Washington state; vessels are, but there isn't any yearly registration on outboards.

We do need to have the outboard installed once we purchase it. I am not a bad mechanic, but outboard installation for one that is this heavy is not something I would ever even remotely consider doing myself. I know a service shop in Everett, Washington, that I completely trust to do the installation of an outboard, but they don't sell new outboards, and if they did, we would have to pay sales tax.

Our neighbor across the street is a salesman for Boat Country in Marysville, Washington, and they do sell outboards, but I am torn on whether to purchase it from him or try to get one in Oregon. Oregon has as many marine dealers as Washington does.

Take it easy,
Paul

[jimh]

Retail dealers buy their outboard engines from the manufacturer at various price discounts, depending on their relationship with the engine manufacturer. Retailers who are well-established with a particular manufacturer, have certified repair technicians with current training, have inventories of service and repair parts on hand, and sell a substantial volume of engines will receive the best discounts on their outboard engine purchases from the manufacturer.

As for how much of that discount they will to pass on to their customers, I don't know of any way to predict that behavior. Like any business, particularly any retail business, the owner has to decide what sort of price mark-down he wants to sell at.

[jimh]

Buying expensive items like an outboard engine from out of state to avoid paying the in-state sales tax may be a way to avoid paying the sales tax, but you will likely be obligated to pay another fee--the same amount--for the importation and use of the outboard. There is quite an informative discussion on this topic from the archives. See

http://continuouswave.com/ubb/Forum1/HTML/021806.html

Note in the discussion a resident of Washington reports that Washington does have a use tax provision.

[jimh]

Another problem in pricing a new "loose" (not attached to a new boat transom) outboard engine is separating the cost of the engine from any accessories and services provided with it at purchase. For many brands, a new outboard engine must have its installation certified by an authorized dealer in order for the warranty protection to go into effect. Modern outboard engines are complicated devices, and the manufacturer is not willing to protect their products against all harms unless the installation of the outboard was accomplished in accordance with the manufacturer's requirements. The warranty may also require that certain minimum accessories be purchased, such as warning gauges or diagnostic gauges to alert the operator to problems in the engine operation.

[Phil T]

Paul--keep in mind some dealers do not sell "loose engines". Others are hesitant to install an engine bought somewhere else. Could charge more. Does Yamaha warranty specify dealer certification for warranty in the same was as BPR does for E-TEC?

Shopping for an outboard is as complicated as shopping for a new car. You really should shop around and get written detailed price quotes for the entire project. For each vendor (minimum of 3), get detailed, line item prices for:

- loose outboard
- harnesses (list p/n)
- gauges (which ones, p/n)
- Binnicle (p/n)
- prop (brand, model and material)

Don't forget to obtain costs for:

-Remove old engine, harnesses, gauges (don't forget it is worth $$)
-Install of new engine, transom repair (if old bolt pattern)
-Rigging
-Fine tuning of motor height and re-size prop.

Sales tax should not be your concern. Getting the best deal should be.

[PJMSport15MY1984]

Our old Johnson 70 was removed a few years back when it was on it its last leg. We removed the entire thing, and a dealer in Mount Vernon sold it for us. We have since redone done the entire inside deck on our classic 15.

If I purchased the Yamaha in Oregon, I would have it installed at the dealer I purchased it from. In fact, I would have it installed at any dealer I purchased it from. I am currently in the process of doing the research on the best pricing for the F70. I, actually, have way more than three quotes.

If we decide to purchase a new outboard in Oregon, there is no sales tax enforcement across state lines. It would be the same thing as buying your mom a Kitchen-Aid mixer down there. It would cross the state line, and nobody would ever even know you were there. The only state that has some kind of enforcement on the west coast is California. When you cross the California state line, they check vehicles for citrus fruit.

As far as the Washington use tax, this might be valid on large vessels, but there is no such thing on small vessels. You simply pay your registration each year, and you are good to go. There are marina fees to launch, but they never ask any kind of details about how many hours you have used your vessel.

Thanks again for all of your replies,
Paul

[jimh]

As far as the Washington use tax, this might be valid on large vessels, but there is no such thing on small vessels. You simply pay your registration each year, and you are good to go.

I do see that use tax on "vessels" is to be calculated on a different basis, probably applied at the time of registration of the vessel or renewal of the registration. But I don't see that this exempts separate components of the vessel, like an outboard engine from payment of use tax if the outboard were purchased out of state and transported to Washington and used there.

[jimh]

On a new engine purchase, the time of year is an important consideration. Usually there are sales incentives provided by the manufacturers and publicized to the buying public in the late winter and early spring--the boat show seasons. The sales incentives can be in many forms, but often are a cash rebate (usually in proportion to the engine horsepower), an offer of a credit towards the purchase of accessories for the engine, or an offer to extend the warranty coverage period by several years. It is also common that all three forms of sales incentive are available and the customer can select the option he prefers. That means that right now is a good time to buy a new loose outboard engine.

[PJMSport15MY1984]

I am going to explain how the Washington state property use tax works. There is a page on the Washington state government's web page in which all Washington residents are supposed use when they cross over the borer of another state, and purchase goods to be used in the state of Washington. There isn't any enforcement of this property use tax by the state of Washington. This web page is simply there for Washington residents to use. Of course by law, they are supposed to be using this web page. There isn't any state agency checking items going over the Oregon or Idaho border.

When you purchase a car, motorcycle, recreational vehicle or boat out of Washington state, the purchaser will eventually have to register it in Washington state. At this time, the purchaser will have to pay Washington state sales tax on the purchase of the piece of equipment that was purchased originally out of state. The sales tax is calculated from the purchase price on the bill of sale of the item. After the purchase and the sales tax has been paid, the only thing that is required of the item by Washington state is yearly registration. If your motor fails on your automobile, and you purchase a motor down in Portland, OR to replace the broken engine, nobody or government agency ever has any knowledge of the new engine from your yearly registration documentation and fees. The only way they would know this is if the purchaser used the property use tax web page, which most Washington residents don't even know exists. Motors and outboard engines are not registered in the state of Washington. The vehicle and the vessel are, but there isn't any engine registration.

Outboard dealers down in Oregon love Washington residents because Oregon is a sales tax free state, and Washington residents know they will save a ton of money by purchasing their outboard down in Oregon. Washington residents who need to repower their boats, use Oregon outboard dealers all the time. This is why Oregon has such a captive market on California, Washington and Idaho residents who need to repower their vessels. The only drawback to purchasing an outboard down in Oregon is that for Seattle residents Portland is 210 miles away, which is not at all convenient as far as working with your dealer on warranty work, after purchase work or items that were negotiated during the original purchase price. How friendly Washington outboard dealers are with outboards that have been purchase out of state is a question I can't answer.

Thanks for reading,
Paul

[jimh]

...by law, [Washington residents who purchased goods in another state and bring them back to Washington] are supposed to [self-report those purchases]

I think this was already clear to everyone that Washington has a use tax and is no different than most other states. Most states have use tax laws, and they depend on self-reporting to become aware of an individual's obligation for pay the use tax.

Unless a retailer in some state has some sort of cooperative arrangement with the government and taxing authority of all 49 other states and sends data about sales he made to residents of those 49 states to each state taxing authority, there probably is not a simple way for a state to gather data about out-of-state purchases. The collection of use taxes seems to depend on self-reporting.

There is a general trend in all government to continually look for sources of tax revenue, and with the rise of mail-order purchases or electronic purchases in today's economy it would be foolish to think that all states are going to sit back and do nothing to recover the use taxes they are due from these purchases.

The State of Michigan changed its laws in 2015 in order to put the onus on the retailer to collect, report, and forward to the state use taxes on purchases made by residents of Michigan from on-line sources. The new law is summarized here:

http://www.michigan.gov/documents/taxes ... 2073_7.pdf

[Dutchman]

Outboard dealers down in Oregon love Washington residents because Oregon is a sales tax free state, and Washington residents know they will save a ton of money by purchasing their outboard down in Oregon. This is why Oregon has such a captive market on California, Washington and Idaho residents who need to repower their vessels. The only drawback to purchasing an outboard down in Oregon is that for Seattle residents Portland is 210 miles away, which is not at all convenient as far as working with your dealer on warranty work, after purchase work or items that were negotiated during the original purchase price.
Thanks for reading,
Paul

Paul you already mentioned another reason why the Oregon dealers love out of State purchasers because they don't have to deal as often with warranty and lots of little complaints as most customers won't drive the 420 miles for what the can have taken care of locally for $100 or $200 bucks.
Been there done that with a car (Mini Cooper S) for my wife. You think twice before driving 150 miles 2x as that basically cost you a day. Even when they opened a dealer 50 miles away it was still a hassle. Luckily the car didn't have any problems in the 11 years we have it.