A boat is a huge investment. Before making this investment, it is important to evaluate all of the costs that go into boat ownership. Once you know what you can expect to pay, you can begin figuring out what type of boat you can afford.
Costs Associated with Buying a Boat
The first step in boat ownership is purchasing a boat. According to the National Marine Manufacturers Association, the average price of a cruiser with inboard engines was $465,862 in 2007. The average sailboat cost $60,708, and the average price of a ski boat was $47,234.
However, these are just averages. Boats vary in price according to their size, age, condition, engines, uses, equipment and design. It is possible to pick up a used boat for a few thousand dollars. It is also possible to purchase a mega yacht for a few hundred million dollars. Boats are available in almost any price range. When purchasing a boat, the thing to remember is that there are many additional expenses besides the boat itself.
If you can’t afford to purchase a boat outright, financing is available. Of course, this means that you will also pay interest. Once you purchase the boat, you must register the boat and pay tax. Registration fees vary by state and are usually based on the boat’s length. In Florida, a 40 to 64 foot boat costs $134.50 to register. You may also have to pay sales tax and personal property tax. Sales tax will vary from two to 11 percent depending on your state and county. Property tax also varies by location.
Docking and Storing Your Boat
Once you have purchased a boat, you need a place to keep it. Dock space is typically rented on a month-to-month basis. Prices vary by marina and location. As a rule of thumb, you can expect to pay around $10 a foot for dock space. If you own a 30-foot boat, you’ll pay around $300 a month for dock space. It will also cost around $300 to have your boat put into the water and another $300 to have it hauled out.
The Cost of Repairs and Maintenance
Boats require a lot of maintenance. The equipment, pumps and bearings must be regularly inspected and repaired. Just like cars, boats also require regular oil changes. Every 12 to 18 months, you must clean and repaint the bottom of your boat
The older a boat gets, the more maintenance it will need. The average twin diesel motor yacht costs around 7% of its value each year to maintain. After ten years, more maintenance will be required. Expect to pay around $3,500 a year to maintain a $50,000 boat.
Factoring in the Cost of Fuel
Fuel is another important cost. This cost will depend on your boat, how far you travel, and how fast you travel. A 33-foot sailboat traveling at 7 knots should be able to travel 300 miles on 50 gallons of diesel fuel. If you are paying $4 per gallon, the trip would cost you $200.
Most boats have much larger gas tanks than cars. A 40-foot sports yacht may be able to hold as many as 250 gallons of gas. Typically, double-engine boats hold more fuel than smaller boats. Larger boats also go through fuel much faster.
The Cost of Boat Insurance
Once you have a boat, you need to insure your investment. Boat insurance premiums depend on the value of the boat, the provider, deductible and coverage. There are two main types of policies: peril and all-risk policies. A peril policy will cover accidents, theft and weather related damage. All-risk policies offer additional coverage, like injury coverage and equipment damage. The average annual cost of boat insurance is between $300 and $500. However, larger boats may cost more than $1,000 a year to insure.
The Total Cost of Owning a Boat
After taxes and registration, a $50,000 24-foot cruiser may cost around $55,000. If you take out a 10-year loan, you’ll pay between $10,000 to $15,000 in interest. After one year of insurance, maintenance, fuel and storage, you’ll have spent around $75,000 to $85,000. This is assuming that you haven’t had any major accidents or problems.
Within five years, your $50,000 boat may have cost you double its original price. Boats are expensive investments. Fortunately, as long as you can afford the upkeep, owning a boat is an extremely rewarding experience.