The New Way To Own Page 2
According to Flynn, the benefits of leasing with Argosy are manifold. On the financial end, there is little or no down payment due (pending credit approval), nor is there sales tax. Furthermore, because the company offers operating leases (which essentially transfer the right to use an asset but not its actual ownership), lessees are only required to record operating expenses on their income statements. Thus, no debt will appear on their balance sheets. Furthermore, lessees enjoy some tax deductions due to the depreciation of the asset. Based on these advantages, YachtLease has determined that its lessees save an average of $20,000 per every $1,000,000 of new-yacht costs.
Additionally, included in the lease price are an extensive survey and sea trial by an approved marine surveyor, a five-year extended warranty on main engines and marine gears, and the installation of a comprehensive monitoring system that includes access to a concierge/help desk and an SOS emergency center. Moreover, YachtLease provides services such as semi-annual interior and exterior detailing and an annual haul-out and survey. The idea, says Flynn, is not to just help lessees purchase vessels but to assist them throughout all stages of their lease.
All of which begs the question: If there are seemingly multiple benefits to the YachtLease model, why hasn't anyone succeeded at this before? In the past "it has been larger financial institutions getting involved [in boat leasing]," Flynn explains, "and they have targeted the mass market, those 20- to 40-foot boats. We, instead, are super-targeted. We're only focusing on the 80- to 130-foot market, and we're only targeting individuals who've previously owned yachts." He continues, "We're not in a huge hurry to expand this company. Our focus is entirely on providing quality service." Couple that ethos with Flynn's extensive experience in the industry and it's easy to see why his platform may well thrive.
Flynn does point to at least one potential hurdle facing his company, that is, changing the market's perception of what being an owner looks like. "Twenty years ago, there was a stigma attached to leasing cars," he says. "an idea of, 'Oh, you can't afford your car?' That's something we need to help people get over." It is something he hopes to do "by stressing the basics over and over again. That by doing this, you'll get at least a two-percent savings, you get a longer warranty, and you sign up for constant management." It's clear from speaking with Flynn that he has absolute confidence in his concept. Confidence that, slowly but surely, YachtLease will be able to expand its fleet (his is not an exclusive arrangement with Westport). Confidence that dedicated yachtsmen will come to understand the benefits of his business model. And confidence that over time, he will be able to fundamentally change the concept of purchasing—and owning—a megayacht. Innovation, it seems, might just be upon us.
This article originally appeared in the February 2009 issue of Power & Motoryacht magazine.