How much does it really cost to own a boat?
Many people ask me this question, and, as with everything, the answer is, “It Depends!”.
The sad thing is that as a mechanic, I’m usually asked this question by someone who already HAS a boat. So many people are drawn in by the allure of boat ownership and just assume that, like a car, you just change the oil and toss on a set of tires now and then.
Unlike a car, there are many costs related to boat ownership. Many.
In this example, I’ll focus on a 40-45 foot diesel-powered twin engine.
Here are 12 to consider:
Purchase price.
This is the part of boat ownership that you are in control of. There are many options out there in today’s market. Size, Number of Engines, Gas vs. Diesel, Accommodation, Build Quality, Age, Condition, and Location all play significant factors in price.
A new 45 ft cruiser can easily cost upwards of $1.5 million. Used boats range dramatically and are susceptible to market swings. Recently since the pandemic, the price of used boats has taken a significant increase as the number of people who want a vacation spot away from everyone else has sky-rocketed.
One source for boat pricing is the JD Power Boat Guide, or you can visit the boat broker websites like Boats.com.
For this example, we will use a used, 2015 Sea-Ray 40 Sundancer.
Cost: $450,000
Taxes.
State tax laws on boats vary.
Some states only charge a “Sales Tax” at the time of purchase, other states like South Carolina, charge a tax equal to 10.5% of the boat’s assessed value yearly if the boat spends more than 180 days in the state.
Cost: varies
Insurance.
Rates average about 1.5% of the boat’s insured value.
In this case, a $450,000 boat would cost about $3,750 per year to insure. Insurance rates in hurricane-prone areas can be much higher. Many policies restrict the boat’s location during Hurricane season (June – November).
Cost: $3,750
Financing.
If you choose to finance your boat purchase, you will also need to factor in the interest rate on your boat loan. Be prepared to pay several percentage points higher than the going rate for auto and home loans.
Consider using a company that specializes in boat financing, as they will have more options than your local bank or credit union. Your boat broker can point you to some options.
Cost: varies
Registration.
Like a car or truck, the registration costs vary by state, from pocket change in some states to hundreds of dollars in others. Some owners opt to register their boat with the US Coast Guard (currently $26 per year) to avoid registration costs; however, check with your state as some states, like Florida, still require you to register your boat if it is in the state for more than 180 days.
Cost: varies
Mooring.
Waiting lists for a dock or slip in a marina can run for years, so if you’re lucky enough to get one, plan to spend anywhere from the low hundreds annually to as much as $3,000 per month for larger boats.
You’ll also need to budget for electric service to keep your batteries topped up and your air-conditioners or heaters running. Some marinas include this in your slip fee, while others charge as much as $150 per month extra or meter your usage.
Cost: varies
Dinghy.
Many people with cruisers want a smaller “dinghy” or “tender” to explore shallower areas or to get to shore when anchored.
A basic inflatable boat with oars will cost you about $1,000 new. If you want something with a motor, they can range from a simple “RIB” (Rigid Inflateable) to a center console. Plan to spend a minimum of $7,000 for a small RIB with a 9hp motor and upwards of $15,000 for a center console type RIB.
Also, remember that this is another “Boat,” so you’ll have to register, insure, and pay tax on it as well.
Cost: varies
Winter storage.
Unless you live in a warm climate year-round, plan on budgeting for winter boat storage.
This annual fee includes paying someone to haul the boat out of the water, drain all the fluids, add anti-freeze, shrink-wrap it, and set it on blocks. Prices for hauling and storage vary widely depending on where you will store your boat, so shop around!
Cost: about $2,000 to haul and winterize, then $50 to $800 per month.
Maintenance.
Annual maintenance is roughly 10 percent of the cost of the boat. This covers regular oil changes, filters, transmission service, bottom paint, day-to-day minor repairs, and bottom cleaning. Don’t forget that most larger boats have generators on board. These need maintenance too!
If you don’t like to wash your car, you probably won’t want to wash your boat. Boat detailing services cost from $10 per foot for a simple wash to $75 per foot for a buff and wax.
For our example, $450,000 boat, that 10 percent comes to $45,000 annually.
Most diesel-powered boats will also require a “1000-hour” maintenance. This is similar to the “scheduled maintenance” most automotive manufacturers suggest. This involves cleaning or replacing coolers, hoses, injectors, turbos, and pumps. While the general rule of thumb is 1000 hours, time can take a toll on engines as much as running hours. Boats that spend much of their time in salt water require more frequent maintenance.
Costs for a 1000-hour maintenance on a twin-engine boat average between $50,000 and $100,000 per engine and are above and beyond the 15 percent maintenance estimate. If you want to budget for larger maintenance expenses, using 20 percent of the boat’s cost per year is a more realistic estimate.
Cost: $45,000 to $90,000
Fuel.
As with your car or truck, fuel prices for boats vary widely. Recently, we have seen a huge increase in fuel prices, with marine diesel exceeding $6.50 per gallon in some areas. Currently, the average on the US East Coast, according to Cruisersnet.net, is $3.65 for Marine Diesel and $4.35 for Marine Gasoline.
When choosing your boat, carefully consider the fuel type (Gas or Diesel). While gas engines will give you a bigger power boost, they use significantly more fuel, require more frequent maintenance, and are less safe than diesel engines.
Fuel consumption will vary greatly with the size of the engine and how fast you like to go! As a general rule for a twin-engine diesel boat, you can assume about 1-2 miles per gallon. Single-engine trawler-type boats in the 40-50 foot range can get upwards of 10 miles per gallon.
Cost: varies
Safety items.
To meet Coast Guard minimum requirements, you’ll need to purchase life jackets for each member of your family and have a few extra on hand for visiting crew.
At about $70 a pop, a set of five life jackets adds up to $350. A safety kit, including a horn, visual flares, fire extinguisher, and other items, will run you about $250.
Total cost: $600
Navigation equipment.
Most boats in our example size range will come equipped with a Chartplotter, VHF Radio, and Depth Finder, which are the minimum you’ll want for safe boating. Your boat may also come with a Radar, AIS, and Stereo system.
Before venturing out, you will also want to consider a good hand-held VHF radio as a backup ($100-$150) and a set of Marine Binoculars ($80-$150).
Your Navigation equipment also requires regular maintenance and updating. Subscriptions to Map and Chart updates run $200 to $300 per year. When buying an older boat, check with the electronics manufacturer to ensure they still provide parts and support for the installed models. Replacing electronics can quickly run into the several $ 10,000s of thousands.
Cost: $600
Miscellaneous costs.
I have tried to hit the major costs to consider when owning a boat. But like the car manufacturers, I’ll stick in the standard disclaimer “Your Mileage May Vary!”
Boats are “Pleasure Craft” for most people, and accessories like inflatable tow behinds, high-end coolers, galley appliances, and bedding can add a lot to your boat’s initial fit-out and ongoing operating costs.
Remember here that the keyword is “Pleasure” if you are struggling to make your boat payment or are losing sleep about the cost of maintenance or repairs, boat ownership may not be for you.
The grand total.
What’s the true annual cost of buying a $450,000 45-foot cruiser? Using rough averages…
Purchase price: $450,000
Taxes: varies
Insurance: $3,750
Registration: varies
Mooring or dock fees: varies
Little boat: varies
Winter storage: $2,000 + $600/month
Maintenance: $45,000
Fuel: varies
Safety Kit: $600
Navigation Updates: $600
The Grand Total For The First Year of Ownership Comes to $504,350.
The annual tab for upkeep, including insurance, winter storage, and maintenance, comes to $54,300. That’s $4,525 per month.
Neither of these estimates includes taxes, registration, dock fees, loan interest, and fuel, so the REAL cost of owning a boat is even higher.
These are general estimates. There may be ways to economize, like buying all second-hand products, pulling favors with friends, doing some of your own maintenance, and searching for local discounts or saving solutions.
Make sure that you consider all the costs of boat ownership. If you visit most any marina, you will see boats sitting with years of dirt, literally rotting from the inside out because the owners can’t afford to fix or maintain them.
Remember, it’s “Pleasure Boating!”