Compare Listings

Is the Term Gray Market Yacht in Brokerage Appropriate?

According to Webster, Gray Market is defined as “ …a market employing irregular but not illegal methods; especially : a market that legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer.”

Indeed, yacht builders set up dealers throughout the world and yacht dealers would prefer that you buy through them. But, what about brokerage yachts? They are not controlled by either shipyards or dealers. However, the problem is that some brokers often tell their clients that boats located in other countries are “Gray market” boats, and that the new owner will have problems importing such boats because of a multitude of reasons such as electrical problems, warranty, resale, etc. However, the most important reason they don’t want their clients looking at these boats is because it takes them a lot less time to sell a US located boat and time is money. Additionally, if they have the listing in the USA, in all probability, they do not have the listing overseas and that will cost them more money. So really, the term Gray Market for US yacht brokers is used solely to make more money. But, the consequence is that the client will pay more for the boat…sometimes, substantially more (look at the article in this section called “The Cost of Xenophobia.”)

To be fair, there are differences between boats sold in the US and Europe. The biggest difference is that shore power in Europe runs at 50 cycles. In the US, shore power is at 60 cycles. The cycles (hertz) in current only affects electrical equipment that runs on AC (alternating current) power, not battery power. Direct current (DC power) from the batteries whether it be 12volts, 24 volts, or 30 volts is the same in the US and Europe. And, since all battery chargers can utilize both 50 or 60 hertz AC, there are never any issues with electrical equipment that uses battery power, such as bilge pumps, all electronic instruments (GPS, radar, Chart Plotters, etc.), DC lighting, etc.

Alternating Current cycles is only important for motors in some fans, pumps, compressors, and other electrical equipment that use the cycles to time the motor. The most common uses on a boat are washing machines, dishwashers, and air conditioning compressors. Therefore, a European 50 cycle motor that runs on US 60 cycles will turn 20% faster. A 60 cycle American motor that runs on European 50 cycle power will turn 16.7% slower. So, what are the consequences? With washing machines, they will run 20% faster, so if you want your clothes washed for 60 minutes, you might set the timer for 75 minutes instead. The same strategy works for dishwashers. With AC compressors you generally have to do nothing because they are made to usually run at 50 or 60 cycles. If they are 50 cycle compressors, the fan motor will blow 20% more air, however, the conventional wisdom is that their lifespan will be shortened 20%. Since most of these compressors last 10-15 years, that is not a major issue. In practice, we have several yachts we brought over from Europe 15 years ago, and of the 7 AC compressors aboard, only 2 have been retired. Note that major USA appliances that use a lot of power always use 220 instead of 110v so there never is any need in changing European ovens, stove tops, electric heaters, etc.

Bilge pumps on boats are always DC pumps because they must work even if the generator is not running. However, on some bigger yachts, especially those whose generators must always run while underway,there are fire-fighting pumps as well as emergency bilge pumps that run on AC power. These boats brought to the US have to have the pumps changed or in the usual cases, they install an electrical converter. Converters cost $20,000 to $100,000 depending on how much power is consumed. This is a small price to pay for a yacht that can cost millions, especially if millions are saved by buying it overseas.

Electrical outlets aboard can be a minor irritant if the boat does not come with international outlets (most new boats built in Europe do). The inexpensive solution is a 50 cent adapter in each outlet. Or, the more expensive alternative is to change the outlets at a price of $50-75 each. And, if you wish to have 110-115v aboard instead of 220-240v, a small $350 dollar transformer installed in the electrical space will do the trick.

There is one further non-consequential electrical issue. Europe 220 uses 3 wires (ground, 220 in, 220 return). American 220 uses 4 wires (ground, 2 x 110 in, 220 return). Therefore, since 110v uses a wire with a larger gauge than a 220v wire rated for the same amperage, to be safe, you should not put as much amperage through a European 3 wire harness that is using US 110 volts. The easy way to fix this is to change the breakers… by using breakers with lower amperage, especially for the electrical outlets; for example, changing 30 amp breakers to 15 amp breakers is sufficient to carry the load of most appliance plugged in an outlet. The cheapest and safest way is to leave the outlets in 220v since nowadays in the USA, all TV’s, audio equipment, computers, cell phones, etc., use either 110 or 220 volt input current and convert it to DC with an external AC-DC converter. But, that might oblige you to buy a 220 hair dryer, coffee maker, blender, and any other small appliance you might need in the galley. Gandhi Appliances in Morton Grove Illinois sells these online inexpensively, although in most cases when we buy a boat in the Med…they leave the appliances on board.

To summarize, the term Gray Boat is meant to keep American buyers away from buying a boat in Europe where you can save up to 40% for the same comparable boat in the US. The only difference between a European and an American boat of the same model is that shore power comes in at 50 cycles instead of USA 60 cycles. These differences are minor and in most case can be either completely forgotten or for the purest who want to make sure that all their on board outlets are 110-115 v the cost of conversion is extremely minor.

img

Josh Mango

Related posts

16 Questions to Ask Before You Buy a Yacht

Buying the right boat for your own use requires asking yourself a few questions about your...

Continue reading
by Josh Mango

How to Buy the Right Boat

Most yachters buy the wrong boat. This a fact proven by boating statistics (the average boat is...

Continue reading
by Josh Mango

Using Exchange Rate Graphs to Find Bargain Yachts

We live in a very small world. We also live in a very competitive world, especially in industries...

Continue reading
by Josh Mango

Join The Discussion