How trade-ins work
A trade-in lowers the price of the new boat. In many states, it also reduces the sales tax on the purchase, because tax is charged on the difference. That tax savings is part of the trade-in's value.
How donating compares
Donating gives you a deduction, generally the sale price on Form 1098-C, if you itemize. It does not reduce sales tax on your new boat. Compare the trade-in credit plus any sales tax savings against the likely deduction times your tax rate.
When donating wins
When the trade-in offer is very low, when the dealer does not want the boat, or when the old boat needs work that would cost more than it adds.
Getting a real trade-in number
Ask the dealer for the trade-in value separately from the new boat's price and any discounts. Bundled numbers can hide how much the trade is really worth.
The sales tax effect
Where trade-ins reduce sales tax, the savings can be significant on an expensive new boat. Include it in your comparison.
Donating the old boat, buying the new one
If you donate, schedule the pickup around delivery of the new boat so you are not paying to store both.
Questions
Does my state give a sales tax credit for trade-ins?
Many do, but not all. Ask the dealer or your state tax agency.
Can I do both, trade the boat and donate the trailer?
Yes. A trailer can be donated separately if the dealer does not want it.
Which is faster?
A trade-in happens on the day you buy. Donation pickup usually takes days to a couple of weeks.
Can I donate the old boat and still get a dealer discount?
Dealer pricing is between you and the dealer. Donation does not affect it.
Which is better for a boat that needs work?
Often donation, because dealers discount heavily for repairs.