The Real Cost Of Boat Ownership

Owning a boat is a dream for many, offering the freedom to explore the open waters and enjoy leisurely weekends with family and friends. However, this dream comes with various costs that potential boat owners should consider before making a purchase. Here, we’ll dive into the various expenses associated with boat ownership, from the initial purchase to ongoing maintenance.

Boating Wisdom

It is often said, “A boat is a hole in the water into which one pours money.” Others suggest that BOAT stands for “Break Out Another Thousand.” After paying for multiple repairs over 8 years of ownership, I think that BOAT, has FOUR T’s! B.O.A.T.T.T.T. “Break Out Another Ten To Twenty Thousand!”

The purpose of this article is not to discourage you from owning a boat. Instead, I want to help you enter the wonderful world of boating with your eyes at least partially open to the realities rather than simply being dazzled by the sun glinting off the waves.

The Naysayers

I will address the naysayers right up front. If you walk around the dock talking to boat owners, you will always find someone saying, “I’ve got 10,000 hours on my engine, and I just add oil when the light comes on. I never let those mechanics rip me off by doing maintenance.” Yes, that might be true. However, I wouldn’t want to go offshore in that boat or be the next owner!

While you may skimp on maintenance, it’s guaranteed to be expensive when something does come up. Also, when you sell your boat, the resale value will suffer greatly once a surveyor examines it. If you are buying a boat, ask to see the maintenance records and receipts!

Talk to commercial fishermen who truly have 1000s of hours on their boats. They stake not only their livelihood but their lives on the reliability of their boats, and they will tell a tale of regular maintenance and ongoing repairs.

A Hypothetical Example

In this article, I will use a hypothetical boat and estimate the costs associated with the purchase and the ongoing maintenance and upkeep. Every boat is different, every boater uses their boat differently, and no one can predict mechanical or “user error” expenses. I’ll give examples, and we will add up the total at the end. As they say in the car commercials, “Professional driver on a closed course. Your mileage may vary!”

For our example boat, we’ll name it “Hypothetical,” we will use a 2016 Sea Ray 400 Fly. This boat has twin Cummins QSB 6.7 Diesel engines (960 total horsepower), a top speed of 36 mph, and an overall length of 45 feet.

Purchasing the Boat – The Cheap Part!

The journey begins with the purchase of the boat itself. Depending on the type and size, cruising boats can range from $50,000 for smaller, older boats to several million dollars for newer 50 to 60-foot yachts. It’s important to remember that the purchase price is just the beginning; additional costs will quickly add up.

For our example, “Hypothetical,” we will use a purchase price of $600,000.

Boat Survey: The Marine Inspection

Like a home inspection, a pre-purchase survey is crucial for assessing the vessel’s condition before purchasing. A professional surveyor can identify existing issues, helping you avoid costly surprises in the future. The cost of a survey typically ranges from $40 to $100 per foot and is a worthwhile investment for peace of mind.

A comprehensive survey for a pre-owned boat will generally include three key areas:

1. General Survey: This evaluates the boat’s various systems, including electrical, electronics, plumbing, air conditioning, and general condition.
2. Hull Survey: This ensures the hull is in good condition and free from blisters or voids. It will also evaluate the bottom paint and condition of the propellers and running gear.
3. Engine Survey: This assesses the condition of the boat’s engines and mechanical systems. The surveyor will look at maintenance records on the engines and take oil samples from the engines and transmissions to send out for analysis.

While there are surveyors who are certified to evaluate all three areas, you should consider hiring a specialist in each area for your survey. Surveyors should be certified by the National Association of Marine Surveyors (MAMS), or the Society of Accredited Marine Surveyors (SAMS). Engine surveyors should be certified by the manufacturer of the engines in the vessel if possible, especially if the vessel is still under warranty.

A good surveyor will also review the boat’s maintenance records to ensure that there are invoices and receipts for the maintenance that the prior owner “claims” was done.

Hint: It is advised to keep a folder with all the bills for your boat, even the receipt from WalMart when you buy your engine oil. Every bit of documentation will help improve your boat’s resale value.

Even brand-new boats, fresh from the factory, benefit from an independent survey, as it will identify manufacturing defects before you take final delivery. Yes, even a two-million-dollar yacht will have issues when delivered. Boats are complex organisms!

Investing in a thorough survey can give you confidence in your purchase decision and save you tens of thousands of dollars down the road. It can also help you negotiate the price of the boat or determine what repairs should be completed before closing. With some boats, it’s better to run, not walk away!

ALWAYS get your own survey from an independent surveyor you or your buyer’s broker (not the seller) choose. You want to get an accurate, unbiased opinion on the condition of the boat. Note that an “Insurance Survey” is not a real survey; it’s more of an appraisal for the insurance company.

For our example boat, let’s use $75 per foot @ 45 feet = $3,375 as the cost of the surveys.

Registration and Taxes

Once purchased, the boat must be registered, and depending on your state, this can also include sales tax. States like South Carolina have particularly high sales and ongoing taxes. Sales tax varies but can be around 6-9% of the purchase price. Annual registration fees can range from $75 to several thousand dollars, based on the boat’s size and type.

A Florida example is 6% of the purchase price and $150 per year for registration. So, the first year for our example is $36,000 tax and $150 registration = $36,150 and $150 per year after that.

In South Carolina, the sales tax is 5% of the purchase price. So, $600,000 @ 5% = $30,000. The county tax assessment for boats is 10.5% (6% if you declare it a second home) of the assessed value. For our example, a $600,000 boat with an assessed value of $400,000 @ 6% = $24,000 per year. So that’s $54,000 the first year and $24,000 annually after that. (We moved out of South Carolina!)

Insurance Costs

Insurance is crucial, especially in hurricane-prone areas. Premiums can range from $300 annually for smaller vessels to several thousand dollars for larger boats. Factors affecting insurance costs include the boat’s value, the age, how often it’s used, where it’s docked, and the owner’s experience.

We have a 42-foot 2006 boat with a total loss value of $300,000. We are in Florida, in a private marina. Our Insurance is $2,850 per year through Progressive.

Since our example boat is newer and has a higher value, we will use $3,000 for our example insurance cost.

Finance Costs

If you finance your boat, you must assess the finance costs in your ownership cost calculation. Interest rates on boat loans vary widely based on the amount, term, and credit score. A quick look online shows current rates between 7.5% and 9% for well-qualified buyers on a 15-year term, with some rates as high as 35%!

For our example, we will assume that we are financing half of the purchase at an interest rate of 8.5% for 15 years. That’s a monthly payment of $2,954. Over the life of the loan, you’ll pay $231,759 in interest, just about double what you borrowed!

Slip Fees and Electrical Costs

If you’re docking your boat at a marina, expect to pay slip fees, which can vary widely depending on the location and size of the slip. Fees can start at $1,500 annually and reach upwards of $10,000 or more in popular areas. Additionally, you’ll likely incur electrical costs, which are often billed monthly based on usage. Some marinas will even meter and bill for your water usage!

Another trend we’ve seen becoming more common is the “Live-Aboard” charge. If you plan to live on your boat in the marina, they may assess an additional fee due to increased insurance costs and facility usage. We’ve seen them range between $75 and $200 per month.

Let’s take an example of a marina in Beaufort, South Carolina. They charge $16.90 per foot per month with a one-year contract. So 45 feet @ $16.90 = $760.50 per month. Plus another $300 per month for 50-amp Power, that’s $1,060 per month. Here on the east coast of Florida near St. Augustine, that same slip would be close to $1,800 a month, and in Fort Lauderdale, you could expect to pay $2,500 a month.

Fuel Costs

Now you have your boat, insurance, and a place to dock it. Let’s Go Boating!!! But first, we need to fuel it up. Your fuel burn rate will vary greatly based on the number of engines, how fast you go, hull design, and whether you are gas or diesel. As of October 2024, the average price for Gas on the Eastcoast is $4.45/gal, and Diesel is $4.00/gal.

Hint: If you want to check fuel prices, we use Cruisers Net. They publish a weekly fuel price breakdown by state and region. Go to CruisersNet.net and click on “Fuel Prices”.

Our example boat burns 10.8 gallons per hour at 9 knots (10.3 mph). If you open it up to 27 knots, you are sucking down 61.5 gallons per hour! We’ll assume that you use your boat on weekends and move an average of 20 hours per month. We will also assume that you mostly run around 9-12 knots. At those speeds, you will burn about 20 gallons per hour @ 20 hours = 400 gallons @ $4.00/gal for diesel = $1,600 per month in fuel costs.

To give you a real-world example, our Swift Trawler has twin 340 hp engines. We averaged 9.5 gallons per hour or about 1.5 miles per gallon across the 7,000 miles on each of our Great Loop trips. That’s about 4,666 gallons per Loop!

General Maintenance

Regular maintenance is essential to keeping your boat seaworthy. This includes tasks such as washing the exterior, which can cost $300 to $1,200 each time. Washing your own boat is a right of passage, so we’ll assume that you do it yourself, and the cost of boat soap and wax is minimal.

Bottom cleaning can cost $150 to $400 per cleaning. These costs vary based on the boat size, the services included, and the location. In saltwater locations, you must wash your boat and have your bottom cleaned once per month. You can probably get away with 3-4 times a year in fresh or brackish water. Failure to keep your bottom clean will result in a shorter life on your bottom paint, increased fuel consumption, and engine overheating issues.

While the diver is cleaning the bottom of your boat, they will also check the condition of your running gear anodes (zincs) and replace them if necessary.

For our example, we will assume a saltwater environment and a monthly charge of $150 for bottom cleaning, which is what we pay for our 42-foot boat.

Regular Engine and Transmission Maintenance

Keeping the engine in optimal condition involves regular oil changes and fuel filter replacements. Oil changes can cost between $150 to $300 for smaller engines, while larger engines can cost upwards of $1,000 per engine. Again, there are always variables. If your engine is under warranty, you might be required to use the manufacturer’s oil and filters, which cost more than buying off-the-shelf oil. If you have a mechanic change your oil, you are looking at 6-8 hours minimum at an average rate of $130 per hour. Transmission maintenance is less frequent but necessary, with costs ranging from $200 to $1,200. The recommendation is for every other oil change or once a year for transmission service. If you have a twin-engine boat, double it!

Most manufacturers recommend oil changes and engine service at 100 to 200-hour intervals or one year, whichever comes first. Oil, engine anodes, and coolant will all degrade, even if your boat is just sitting in the slip. Actually, a boat that sits idle degrades faster than a boat that is used regularly due to electrolysis, condensation, and hardening of deposits in the engine. When your boat is running, components get coated with oil, the engine heats up and allows the detergent properties of oil to remove deposits, and condensation in the engine and engine compartment is dried, reducing corrosion inside and outside the engine.

On our boat, we have two engines that each take 4 gallons of oil. The oil filter is $35. Engine oil averages $20 to $45 per gallon, depending on brand and where you buy it. A set of fuel filters runs about $40.

Let’s assume our example boat uses 4 gallons of oil @ $25/gal and a $35 filter per engine. That’s $135 per engine for supplies. Factor in 7 hours of labor per engine, which is another $910, so a total of $1045 per engine x 2 engines = $2,090 per oil change.

You will also need to take incidentals like oil disposal, cleaning wipes, fuel filters, engine anodes, belt replacement, mechanic travel time, etc., which can add another $300-$500 to a service call. If your boat has a generator, factor in an additional $150-$350 for oil, filters, and anodes as well.

Based on 20 hours of usage per month, that’s 240 hours per year. Depending on the manufacturer’s recommendations, that is one or two oil changes yearly. We will go with one for our example. The oil change costs $2,090, $400 for other fees, and $200 for a generator, for a total of $2,690.

Hint: Each time we change our engine and transmission oil, we send a sample out to be analyzed in a lab. This provides a view into the overall condition of your engine and can provide early warnings of things like excessive bearing wear, water or coolant leaking in your coolers or head gaskets, high levels of soot from poor fuel, and much more. We use Blackstone Labs. They charge $35 per sample and will send you Free Sample Kits.

Periodic Maintenance

Certain components will require more detailed upkeep over time. This includes A/C system flushing, coolant system flushing, cooler inspections, water pump impeller replacement, and more extensive engine maintenance, such as injector replacement, valve adjustment, and turbo upkeep. Costs for these services can range from $6,000 to $50,000 or more, depending on the extent of the service required and what parts might be needed.

Additionally, you will need to have your boat hauled out of the water and have fresh anti-foul paint applied every couple of years. Normal bottom paint involves a pressure wash, sanding, and re-coat. That runs around $125-$200 per foot. After several re-coats, you must have the bottom stripped, primed, and repainted, costing $500-$800 per foot.

Here is a chart showing what you should budget annually for maintenance costs based on the boat’s new purchase price. As you will see, the older the boat, the more you need to budget for maintenance.

While you won’t necessarily spend your entire maintenance budget each year, at some point, you will have a major expense, such as needing to replace coolers, injectors, hoses, a/c units, or engine and transmission rebuilds. A new air conditioner can cost $3,000 plus a day of labor to install it, and an engine rebuild can easily cost $100,000 or more.

Most manufacturers recommend that boat engines receive a major service every 500 hours or 5 years. This involves disassembling major portions of the engine and coolant system and replacing injectors, hoses, and pumps. Assuming no major issues are discovered, the 500-hour service will cost upwards of $20,000.

It may seem counterintuitive, but the more hours you run your boat, the less likely you will face a major repair bill in the future. We have seen boats with several thousand hours without a major rebuild. We’ve also seen boats with just a couple of hundred hours on them that needed entirely new engines due to oil or coolant issues and corrosion. Keeping up with regular maintenance will also help reduce the potential for major repairs.

Our example boat is 8 years old, so we will allocate 15% of the purchase price per year to cover periodic maintenance. $600,000 @ 15% = $90,000 or $7,500 per month.

Unexpected Costs

Despite your best efforts, unforeseen expenses will occur. Propeller and shaft repairs from grounding, mechanical failures, or an air conditioning system replacement can happen without warning. A conservative estimate for these repairs starts at $5,000 and can quickly go into the tens if not hundreds of thousands, especially with rising prices for parts and labor. Generator repairs and electronics failures can also add to the tally. A new Chartplotter can run $8,000 to $12,000. Repair or replacement of canvas covers might range from $1,000 to $8,000, depending on the complexity and material.

A quick observation: We have owned our boat for 8 years and have replaced some parts multiple times. In the last 2 years, parts costs have increased by over 30%, and labor has increased from an average of $95/hr to $160/hr.

Here are just a few examples of the unexpected that we’ve come across.

• A boater from Canada had a turbo failure on one engine while in the US. The turbo unit alone cost $15,000, and installing it took 15 hours of labor.
• A boater hit an unmarked rock, damaging the hull, propellers, and shafts. The boat had a $15,000 towing/salvage bill, $40,000 in fiberglass repairs, and $17,000 for new propellers and shaft repairs.
• We assisted a boater who had major electrical issues. They were very short on funds and had to choose between new batteries and a grocery run.
• A Looper developed a leak in their oil cooler, allowing water to enter the engine. The engine had to be completely rebuilt, which could not be done in the boat. They had to remove the engine from the boat, rebuild it, and reinstall it. The final bill was $120,000, and they were disabled for two months. They could not afford both the repair bill and continuing on their Loop trip, so they were forced to sell their boat halfway through their trip.

Totaling Up Our Example “Hypothetical”

So, here is the total budget for our example 45-foot, twin-engine, diesel cruiser yacht.

Again, these are general assumptions for a hypothetical boat!
Your costs will vary depending on:

• how much you use your boat (fuel)
• where you keep it (taxes, insurance, and docking expenses)
• the age and number of engines (periodic maintenance)
• how much of the work you do yourself (periodic maintenance)
• the overall condition at the time of purchase
• how well you maintain it and how lucky you are (unexpected expenses)
  You can improve your luck with regular use and maintenance, but it’s still luck.

Note: Having owned our 18-year-old boat for 8 years, I can attest that these estimates are fairly accurate.

Don’t Shoot The Messenger

I know several boat mechanics, and they all feel hurt when a customer gets angry at them for delivering bad news about a large repair bill. Unless you have your mechanic on retainer and they are responsible for the regular upkeep of your boat, they are dealing with the result of years of water exposure, lack of regular maintenance, jerry-rigged repairs, and the general abuse that comes with the marine environment.

Estimating repairs can be difficult. A rusted-on bolt might have to be drilled out, and what might be a few minutes in one case could be hours in the next. “Boat repairs are like a box of chocolates. You never know what you’re gonna get!” So, if your mechanic won’t commit to a price, understand the variables. Also, your mechanic doesn’t control the price or availability of parts. Frequently, they are as shocked as you are that a part has a 3-month lead time and is 200% more expensive than it was a few years ago!

Also, remember that good factory-certified mechanics are few and far between. Most are quite busy with their regular customers. If you are a transient visitor to an area and call with a problem, the mechanic is probably doing you a favor by dropping whatever they are working on and coming to work on your boat. Be respectful of their time and willingness to help you out in a pinch.

Understand that they don’t know you, and once your issue is resolved, you’ll be several hundred miles away in a few days, so if they ask for payment in advance for parts or to put a credit card on file, it’s nothing personal, just good business. While the vast majority of boaters pay their bills, there are enough that will take advantage of a kind-hearted mechanic to make them protect themselves.

Did You Know: A Volvo Certified Mechanic spends over $30,000 yearly in training and franchise fees.

Finally, remember that your mechanic is working in your hot, cramped, smelly engine room, walking miles up and down docks in the blazing sun while you kick back in your air-conditioned salon, sipping a frosty beverage. Offer them a bottle of water, and consider tipping for good service!

Don’t Be Scared Away, But Don’t Kid Yourself Either!

While the joy and freedom of owning a boat are undeniable, it’s critical to be prepared for the many costs involved. By understanding and budgeting for these expenses, prospective boat owners can ensure their dream remains an exhilarating and enjoyable adventure on the water.

This is “Pleasure Boating.” If you lose sleep at night worrying about making your next boat payment or suddenly have to get a second mortgage on your house because you got hit with a $100,000 repair bill, boating is no longer a “Pleasure,” and who just wants to just go “Boating”?

What are your annual maintenance and operating expenses?
What surprise expenses have you had to deal with?

Let us know in the comments below!

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