Which Boat part 2; Pre-purchase Costs

 

Now that you have made a decision as to just what you plan to do with a boat you need to decide just what your budget is going to be.  Not only for the cost of the boat but for the associated costs as well that many people find an expensive surprise!

It is quite common for first-time buyers to make the mistake of spending too much of their budget on a boat and then not having anything left over to really enjoy it.  There is no magic number as to what percentage of your budget should be for the boat and what percentage should be for new gear, slip fee’s, insurance and such but all need to be considered.

It is generally thought that new gear and refit/repair costs will be between 30-50%+ of your purchase cost.  The older and rougher the shape of the boat the higher the costs.  On top of that nationally the monthly cost for a slip/mooring, insurance, water, electricity will run you $500.00 to over $1000 per month.  A survey published 20 years ago found the average cost then of boat ownership was at $1000/month.  Again, a lot will depend on the age of your boat, its size, and your location.

On top of your purchase price you will also need money for a survey $10-$20/ft., Sales Tax and in some local’s property taxes.  Do not skip a survey!  Even though I am quite capable of surveying a boat I will not purchase a boat without and independent survey.  While the surveyor may not uncover anything I haven’t already found he/she will have an unbiased eye towards the reality of any problems.  Many times, I have seen boats purchased without a survey where the new owner ended up either spending way beyond expectations or walked away losing a good deal of money.  GET A SURVEY!

So, let’s say your goal is a 35’ boat and you have a $150,000 total budget.  Your first expense will be a survey for your bank and insurance company, we’ll use the medium price of $15/ft. or $525.00, do you want a sea-trial add in another $300.00 for a professional captain as the broker won’t run the boat and you really don’t want the owner doing so as they can hide or down play problems.  If the boat is stored in the water you can add in the cost of a quick haul for the survey at another $250.00 or so.  Ok you haven’t even bought the boat yet and you’ve spent $1075.00.

Insurance will cost you somewhere in the vicinity of 1-5% and in some cases as much as 10% of hull value so let’s use 100,000 as our estimated hull value after purchase and we spend another $1200.  Insurance can cost you more based on your experience and what you tell the insurance company will be your cruising area.  Staying local being the cheapest, wanting to go off-shore to the Caribbean the most expensive.

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Taxes, everyone’s favorite subject of hate.  Many people find a way around them, at least for a while but they are out there so let’s talk about them.  Sales tax/use tax the only real way around this tax is to purchase and register your boat in a state that doesn’t have any.  Not easy for most people.  If your state has a 6% sales tax rate you will be paying another $6000.00 on top of your purchase price.  Some states also have a property tax and if your boat is located there, resident or not in some cases, on 31 December or 1 January you will get tagged.  Again, a look at states that do have property taxes on boats shows an average of $500.00-$750.00 yearly on a $100,000 boat.

Finally, what is it going to cost to keep her at a dock or on a mooring?  If you are lucky and few of us are you have a private dock to use or your town allows you to place a mooring at no cost, that is rare also.  So again, depending on where you live, Florida for example you can get a mooring in some locations for as little as $400/month, a dock for $800/month but in New England summer storage will run you $3000 +/- and winter storage another $2500 +/- plus the cost to winterize and cover.  So, storage year-round depending on location $4800 to over $6000.00 for storage.

So, before we have even got to use our new boat we have spent, depending on where we live, over $15,000+/-  the first year.  So now our boat buying budget is down to $135,000 leaving us $100,000 for the boat and $35,000 to refit her for cruising.

Your actual costs will vary depending on your experience level, the boats size as well as its age and level of care it has received by previous owners, your intended cruising range, where you live, and how much work you can do yourself and more and more in many marinas how much work on your boat the marina or boat yard will allowed you to do on your own.

Next, How to go about finding your dream boat.

Part 3 published Sept 5, 2017

Part 4 published Sept 6, 2017