Selling ships

[suburban_fox]

I have a question. I couldn't find rules in any of the books for selling ships... say a player decides to a) sell their starting ship for whatever reason, or b) acquires another ship (say a failed pirating attempt results in them taking over the pirates' ship) and decides to sell one of their two ships. How would this work in the game?

Obviously they won't get full price for it, but since these things cost millions, even at half the list price these things will net the players several million credits, so I feel there should be more to it than "yeah, so you get xx% of the value, which is xxMCr! Congrats, you are now super-rich!". Would it work the same way as selling cars... they'd put it up for sale in Ship Trader and wait for a buyer then negotiate a price, or what?

So, yeah... just wondering how other people have handled the sale of ships, since I'm sure the situation has come up before. It hasn't happened yet, but I have a scenario planned for the next session that could well end up with the players acquiring a second ship, and I want to be ready.

 

[paltrysum]

I would think that they could get close to full price minus any damages (which could be construed as "quirks") that the ship has incurred. The game seems to imply that most ships the players acquire are used and might be decades or even centuries old. If they had to pay full price (using ship shares, ship awards, and credits spent during play) then it stands to reason that they could sell a ship for similar prices.

 

[ShawnDriscoll]

My ships are famous. End up in museums of the rich and fabulous.

 

[AnotherDilbert]

Core p164 has some information for you.

You are unlikely to actually own any starting ship free and clear. It probably has a mortgage.

If you sell a ship with a mortgage you might get 5 - 10 % of new price. Still a lot of money.


If you "find" a ship somewhere, it is probably not legally yours. You might get a finders-fee, or you might fence it, neither is likely to be anything close to new price.


If you do manage to get hold of the unencumbered title to a fairly new ship; then congratulations, you are rich!

 

[Nobby-W]

I have a question. I couldn't find rules in any of the books for selling ships... say a player decides to a) sell their starting ship for whatever reason, or b) acquires another ship (say a failed pirating attempt results in them taking over the pirates' ship) and decides to sell one of their two ships. How would this work in the game?

Obviously they won't get full price for it, but since these things cost millions, even at half the list price these things will net the players several million credits, [ . . . ]

I've done a little bit of work on a 'cheap ships' economy of secondhand or surplus starships. Generally a used starship is worth the economic value of the ship - i.e. given its revenue generating potential, what is worth spending to get that return?

This will be dependent on the ship's running costs, how long before it needs a major refurbishment and its revenue generating potential. Selling the ship through a broker will also cost you the broker's margin. If the cost of refurbishing a ship rises above its capital value then it might just be scrapped. Without going into a whole ECON 101 lecture, If there's scarcity on the market for secondhand hulls then this will put upward pressure on the costs for cargo or passenger transport, so the revenue generating potential will be reflected in the going rates for shipping.

As an example, say we have an A2 class far trader. Assume this can carry 6 passengers, 60 tons of cargo and 10 low berths, and that we will average flying at 80% of capacity. Under the stock trade rules, the cargo can realise Cr48,000, the passengers can realise Cr50,000 and the low berths can realise Cr8,000. Averaging 2 jumps per month (24/year) this comes to approximately 2.5 million. Annual fuel costs are approximately 1 million and crew salaries are around Cr200,000. Annual overhaul costs around 0.1% of the ship's new price, or around Cr500,000. This gives running costs in the region of Cr1.7 million and revenues of Cr2.5 million for a net profit of Cr800,000.

If we assume that we want a ROI of 15% to represent the somewhat risky investment of a free trader, its market value would be around Cr5 million. This assumes that there are no major repairs coming up. If it needed a major strip down of the jump drive or power plant or major refurbishment work done on the hull then the value would be its economic value minus these costs.

If the ship could do something more profitable (e.g. speculation or smuggling) then it might be possible to find buyers willing to pay more, but in practice the market value will be related to whatever the mainstream application of the craft will bear.

This also leads to the question of 'why bother?' if the economic value of the ship doesn't justify the cost of building it then nobody would do that. Some possibilities include:

• Government subsidy to promote economic development in backwater regions. Perhaps an A-class trader can service colony worlds or poorer regions without needing a large scale investment in infrastructure to support it. Imperial authorities might find is cheaper to subsidise the production of smaller, streamlined trading ships than to build out larger class B or C starport facilities on poorer worlds that couldn't support the volume to justify the investment.

• Surplus military transports - perhaps the ships are naval surplus transport ships being sold off.

• Relics of a bygone era. DC3's were used in large numbers after WWII - right up to the 1970s in fact. They remained popular decades after much better aircraft became available because they were practical to operate in remote areas without good logistic support.

In the light of this sort of scenario, the value of used starships is probably quite low, in many cases just a few million credits.

 

[steve98052]

In the case where player characters defeat pirates and end up with their ship, the most likely situation is that the pirate ship is stolen property -- something the pirates took over from a softer target, and either abandoned their previous ship because it was too battered to use any more, or kept in expansion of the pirate band.

In that case, it's probably owned by the insurance company that paid off the loss to someone who had insured it before it was stolen. So what do you do with it?

Go to the nearest starport and report your capture of the ship. Register your intention to either operate the ship, license operation to a (you hope) trustworthy crew, or place it in secured storage if you can't operate it.

If you're in a backwater port, you'll probably just get a flight plan to a better connected port where you get to register the capture again.

If you're going to operate the ship, you need a crew -- probably temporary, maybe working passage.

When you register the capture at a connected port, you get papers granting you legal possession until the legal owner is identified and contacts you back. If you've licensed operation to someone else, they get papers too. The papers restrict what you can do with the ship, but it's probably notmuch more than checking in to look for a reply from the owner.

Eventually, the owner gets your registration of capture. (Presumably a message was sent through the xboat network, either directly to the presumed owner or broadcast through the system.) They send a message to tell you what they want to happen: either a direct meeting or a meeting with someone they trust to negotiate on their behalf.

The result of the negotiation will most likely be an offer to sell you the ship, because the insurance company doesn't want to own ships. Then it's your problem to sell it. If you have a good reputation but can't afford to buy it, they might lease it to you, with an agreed price you can pay to buy it. If you have a great reputation, they might authorize you to sell it for them and keep a share of the proceeds.

Whatever happens, capturing a pirate ship will be a jackpot. You get a ship for a bargain price from the insurance company, and can operate it with a much smaller mortgage than a comparable ship acquired normally. Or you get a portion of the sale price if you sell it to someone else. If you captured any of the pirates, you might get a wanted criminal bounty. It's a good thing to do.

 

[Rikki Tikki Traveller]

I would treat it more like a used Car..

As soon as you buy it, drop 25%. Then 5% per year after that to a minimum of 25% of full value.

Minus any damage.

Salvage rights will be 10% - 20% of full value, after a year or so working its way through the Prize Court.

Black Market ships are 50% of the above values.

To BUY a used ship on the other hand... 90% of new minus 5% per year minimum 50% of full value. Assume it needs an Annual Overhaul before it is safe to fly. Then add quirks...

That can still be a lot of money, but most ships are not owned outright, so the bank loan must be paid off (in full) before any profits are received.

 

[JMISBEST]

Its your campaign, so despite all this good and varied advise you can, if you want, ignore it do it your own way

1 thing though might be to have A Major Pirate have that ship as part of his fleet and offer them a price for returning it to him that isn't tens of millions, but is a couple of million, and is better then what could and would happen if the captured pirate ships legal owner decides to turn nasty or double-cross the players or both

 

[tytalan]

Nobby is almost right only the value of the ship would not be based on one year but the remaining life time of that ship. In earlier versions of Traveller when you got a merchant trader in mustering out it had a 20 year loan on it and it you rolled multiple times the loan would be 5 years shorter and the 5 years old per extra roll. It was also stated that a merchant trader is considered to have a 25 year life time. This does not mean that the ship is junk after 25 year it just means the cost of keeping it flying goes up extremely with out a complete overhaul which would cost almost as much as a new ship. Since a corp has already deprecated the value of the ship on there taxes and they tend to keep the ships in top condition they buy a new one and let there mustering out personal buy the ship on loan. When you get more they one ship roll on mustering out that ships was most likely either had a bad maintenance history or was kept in service longer that optional.

But either way a ship loan of 25 years when new tells use the optional life span of that ship and there for its value used would be its price dividend by its life span"in adventuring ship most likely 25 years" times what left in that life span. This would go down if the ships not in good shape.

In my games any pirate ship is most likely in poor shape at best and battle damage would decrease the value much more. Also there the point mentioned above that the ship is probably stolen which would complicate matters also. Plus the imperial navy tends to want these ships out space and puts a bounty on the ship itself which could be identified by its emissions.

My players tend to either stripe the ship of anything useful or sellable and leave it or turn it in for the bounties on the crew and the ship both. Less hassle and more lucrative. I normally set a ship bounty at .001 of the new cost still a good chunk of money but most of the time about half of that is spent just getting it to a navy base.

Still I had one group during the very first part of the rebellion making some good money with there Furrey class close escort taking out Ver'rg pirates.

 

[Nobby-W]

Nobby is almost right only the value of the ship would not be based on one year but the remaining life time of that ship. [ . . . ]

OP was asking about the secondhand value of the ship. You could also include a discounted cashflow projection over a (say) 10-20 year period for the return in order to speculate on the value of the ship. My assumption about a 15% ROI was just pulled from thin air assuming a somewhat risky investment. A more certain investment with running costs (e.g. rental property) is generally considered viable at about 8% annual ROI, although this will vary with your running costs.

If you mortgage a new ship then your gross margin needs to exceed the cost of repaying the mortgage, plus any ROI you want to receive on your initial investment. If you bought a free trader worth Cr50 million with a mortgage(3% pa, 40 years) then your payments would be about Cr180,000 per month, or around Cr2.1 million per annum.

This would drive appreciably higher charges for cargo and passengers as you would need revenues of around Cr3.8 million annually to cover your mortgage payments. This means that you would have to either
(a) charge about 50% more for passengers or freight - not strictly canon, but you could argue a case for it in YTU for travel in outlying regions.
(b) supplement haulage with speculation in the hope of making around Cr120,000 extra profit per month (probably the staple of most free trader campaigns)
(c) assume some sort of government subsidy
(d) Indulge in a spot of small package trade, piracy or adventuring on the side.

Under the standard trade rules, an A2 class trader isn't going to be profitable on a run where you have competition from large bulk carriers, but is marginally profitable in frontier regions, particularly if you can indulge in a spot of (b) and (d). The viability of (b) and expected average revenues from speculation might also have a positive effect on the secondhand value of the ship. if you could expect to reliably turn annual profit in the region of 2 million then the base market value of a used free trader (in good condition) would be more like 12-13 million under the previous assumptions. Again, if you want to include amortising the profit at some discount rate for a finite period then this could be used in lieu of the risk premium for the ROI.

 

[tytalan]

Which is why most small merchants get there free traders used from the big companies. And yes the only way a free trader makes money is by staying off the mains. Also there can be a premium depend on the type of cargo or who wants it and how bad. Dangerous cargos often bring in more than safe cargos. If your playing during the Hard Time setting free traders and especially far traders can do much better but they can also do much worse

 

[tytalan]

Which is why most small merchants get there free traders used from the big companies. And yes the only way a free trader makes money is by staying off the mains. Also there can be a premium depend on the type of cargo or who wants it and how bad. Dangerous cargos often bring in more than safe cargos. If your playing during the Hard Time setting free traders and especially far traders can do much better but they can also do much worse

 

[Condottiere]

It's difficult to figure out the economies in Traveller, but the dungeon master can be arbritary using the supply and demand of the local system, and let's those within three parsecs.

While it's tempting to treat second hand starships like used cars, while a used car salesman quadruples the price and is prepared to let you argue him down to half, starships prices range in the millions, so the initial sales price is going to be about eighty percent of what a new version costs.

If there are other used starships for sale by his competition, mentioning this should speed up the bargaining process.

Depreciation factors in a lot less for a well maintained ship, since maintenance costs are only one tenth of a percent per annum.

Remember, there are probably a lot more pilots than starships.