How to Budget for Boat Ownership

It can be fairly considerable. Even a basic bass fishing boat can run up to $10,000, while a saltwater boat for offshore excursions can cost upward of $200,000. But the purchase price is just the beginning. A boat requires continual maintenance, and you also have to consider the cost of storing and insuring your vessel. That means your budget should account for both upfront spending and recurring boat maintenance costs.

Upfront vs. recurring

Upfront costs

Here is some of the initial spending to keep in mind to get an accurate picture of the true cost of boat ownership:

Buying the boat

If this will be your first boat, keep it simple. A smaller, used boat is likely a better choice – both financially and otherwise – than a more expensive, larger vessel with all the bells and whistles. As you gain experience and become more comfortable with it, you can always upgrade to a larger or more powerful boat down the line.

The purchase price will depend on several factors, including whether you buy new or used, the type of boat, its size, and what features you want. For example, pontoon boats tend to be relatively inexpensive, while a cruising yacht will cost significantly more.

Financing the purchase

Unless you're paying cash for your new boat, you may need to take out a boat loan for your purchase. You can qualify for financing through many boat dealerships, but you can also find loans through banks and credit unions.

Similar to most car loans, boat loans are installment loans, so you make fixed monthly payments for a certain period, such as five years. The loan charges interest, adding to your overall cost.

Typically, you'll need a down payment and good credit to qualify for a loan; lenders generally want a down payment of 10% or 20%.

Keep in mind: Boats can depreciate quickly. Be careful so you don’t end up owing more than your boat is worth due to rapid depreciation.

Auxiliary expenditures

Other expenses beyond the boat’s purchase price include:

• Sales tax: As a rule, you can expect to pay up to 10% of a boat’s purchase price in state sales taxes. Even in the handful of states with no such levies, you may need to pay local taxes. And you may face a tax bill if you buy in a tax-free state and license the boat in a jurisdiction that has taxes.
• Registration fees: You’ll need to register your boat with the state department of motor vehicles. The fees vary by state, but they're typically based on the boat length. For example, in Florida, a Class A-1 boat shorter than 12 feet is just $5.50 to register, while a Class 2 boat 30 feet in length will cost $78.25 to register.
• Safety equipment: By law, you're required to keep certain safety gear on board, such as life jackets, a fire extinguisher and flares. Requirements vary by state and vessel type.
• Boat trailer: If your boat will be stored at home and taken to different locations, you'll need a boat trailer. Depending on the size you need, the average cost of trailers can range from $1,000 to $5,000 or more. You may need to register your trailer with your state department of motor vehicles.

Equipment and upgrades

Besides the standard safety equipment like life jackets and fire extinguishers, you may want other tools and devices. Examples of such extras include a fish finder or depth-finder devices, radar systems, fishing rod holders, dry bags and boat ladders.

If you'll engage in watersports, you'll also need to budget for things like water skis, inflatable tubes and ropes.

A safe-boating course

As a new boat owner, a boat safety course is optional, but it can be an inexpensive and invaluable investment. The U.S. Coast Guard Auxiliary offers boat safety education courses for people of all ages. These courses teach safe boating skills, navigation and what to do in an emergency. These courses vary in cost, but are generally around $40.

Recurring boat costs

The purchase price is just the start: Boating is a lifestyle, and there are ongoing costs for which you must remember to budget.

Budgeting tip: When estimating the average cost of boat maintenance, leave room for unplanned service. Routine upkeep is only part of the picture, and occasional boat repair costs can add up quickly.

Insurance

To protect your new boat (and to protect yourself against liabilities), you'll likely want to get boat insurance. Costs vary based on the size of the boat, use and coverage limits, but it can range from a few hundred dollars to several thousands of dollars per year.

Trying to estimate the average boat insurance cost for your situation? Factors like your boat type, where you keep it and how often you use it can all affect the premium. Learn more about how much boat insurance you need.

A sea-towing service

The nautical equivalent of automotive roadside assistance plans are sea-towing services that will bring your boat back to port. As with such plans for cars, these services may also provide extra perks, such as jump-starting a dead battery at sea or bringing fuel to the vessel. The cost of such plans can be modest (between $100 and $250 a year), especially considering that single tows without a plan can easily run to hundreds of dollars.

Fuel and operating costs

Unlike with cars, boats do not have fuel-consumption standards, and can use a surprising amount of fuel. Depending on the size of the boat, your boat's engine size, and how far out you go, you could spend $500 or more per trip.

In general, powerboats and offshore vessels use the most fuel. Again, energy costs are often lower for vessels powered by electric or hybrid power, although so may be the boat’s range on any one trip – especially with all-electric models.

Storage and docking

Unless you have a smaller boat you can store at your own property, you'll need to budget for boat storage. With some boats, you can take advantage of dry storage; you put your boat on a trailer and store it in a lot or covered garage at a storage facility. That cost can range from $50 to $400 per month.

But dry storage isn't practical for larger boats, so you may need to rent a marina slip. Depending on the marina (and the amenities it provides), a wet slip can cost anywhere from $150 to $2,000 per month.

And, with some boats, you may need to do a combination approach. For example, you may pay for a wet slip in the spring and summer, but then pay for winter storage in a dry lot. If the marina will have to take the boat out for you, you typically have to pay an extra fee.

Depending on your location, you may have to winterize your boat each year. This annual maintenance involves taking the boat out of the water, draining fluids, and shrink wrapping and storing the boat. The cost of winterization can be anywhere from $150 to $1,000.

Boat maintenance

As with cars, boat engines that use electric or hybrid (gas/electric) power are increasingly available, and may have minimal maintenance costs. But internal combustion power still dominates boating. To keep your boat seaworthy and safe, you'll need regular service appointments, oil changes and cleanings. The power source aside, saltwater boats need extra care to prevent corrosion.

Boat maintenance costs can vary widely depending on your engine, usage and whether you handle basic upkeep yourself.

Is boat ownership right for your budget?

Owning a boat can bring you a lot of joy; fishing trips with friends, peaceful cruises on the ocean, or quiet contemplation on the lake at sunset. But boats are a significant investment, and their maintenance costs and other ongoing expenses can be substantial.

Choosing the right boat means considering what you want to do with it, but also your level of experience and your budget.

Happy sailing!