Boat Ownership Costs: What to Expect

There’s a popular saying among boaters that there’s nothing more expensive than a free boat. Free or not, boat ownership costs are an important factor in deciding which boat is right for you, or if boat ownership is the right option. In the previous article on boat maintenance we took a look at some of the expenses a boat owner is likely to incur maintaining their boat. However, when calculating your expected boat ownership costs you need to factor in more than just your boat’s annual maintenance. This article will look at some of the common costs of boat ownership and give you an idea of what to expect.

B.O.A.T Costs: Rules of Thumb

Most boat owners are probably familiar with the acronym B.O.A.T or Break Out Another Thousand which is a polite way of saying boat ownership, especially if you don’t have a good handle on your boat’s maintenance and other requirements, can get expensive quickly. While every boat is different and your own capabilities as an owner factor in, a general rule of thumb is that you can expect to spend somewhere between $100 per foot of boat length and 10% of your boat’s purchase price per year.

For boat owners looking at new-ish boats in the 30 feet and under range I think the $100 per foot rule is a good starting point of what to expect when it comes to your boat’s ownership costs. This rule of thumb is applicable for boats in this size range that are kept on a trailer or in dry storage and accounts for maintenance, insurance, storage, and usage costs.

For larger boats kept in the water, our $100 per foot rule of thumb may seem like a bargain. I’ve had some professional captains tell me that the boat’s owners expect to spend close to 10% of the boat’s value per year. That figure also includes the captain’s salary, something most boat owners aren’t paying. However, keeping a boat in a slip and paying for the slip as well as regular hull cleaning as well as the associated additional maintenance of keeping a boat in the water all add significantly to the ownership costs.

Boat ownership costs

Boat Storage Costs

Since storage costs are one of the largest components of boat ownership, let’s take a look at what to expect when choosing how and where to store your boat. The most affordable option for many boat owners will be keeping your boat on a trailer. While the trailer itself will need maintenance, especially if it’s used regularly in salt water, that cost will still be lower than some of the other storage options since you’re likely to keep the boat at your own home and trailer it to and from the boat launch.

In a slightly higher price bracket comes dry storage or a mooring field. Both of these options will likely cost several hundred dollars per month for boat owners. A dry storage marina can be a good option for boat owners who aren’t comfortable trailering their boat, or don’t have a place to keep it. The convenience of calling ahead and having the marina prep and launch your boat for you is hard to beat however it does come at a price. For boats that can’t be kept in dry storage, sailboats for instance, a mooring field where you pay for a buoy and often access to their ferry service to and from your boat, can be an affordable option.

A full service marina where your boat is in a slip, or lift, is the most expensive option. While it’s hard to beat the convenience of stepping on your boat, turning the key, and being out on the water, it comes at a cost. Slips are usually priced on your boat’s length and prices can vary quite a bit by area but $1000 per month is not an unreasonable amount to expect for a slip in a big city for a 40 foot boat. If your boat requires a slip and you’re looking for a more affordable option, check out local classifieds for home owners on the water that are renting their dock or lift to boaters.

Boats kept in a slip add to ownership costs.
For many boaters, slip fees represent a significant fraction of their boat’s ownership costs.

Boat Insurance and Registration

In many localities insurance is a requirement for boat ownership. Even if it isn’t required where you live or for your specific boat, it’s a good idea to have some amount of insurance on your boat. Here in South Florida, the price of insurance for powerboats is greatly inflated from national averages by the prevalence of boat theft. However, having been a victim of boat theft myself, having insurance that helped us restore the boat when it was eventually recovered, was definitely worth it.

In addition to your boat’s insurance policy you should also consider becoming a member of SeaTow or Tow Boat US or a local towing consortium. In addition to towing should you need it these services can help with dead batteries, lack of fuel, and a variety of other issues should your boat need it while you’re out on the water. Many also offer roadside towing plans should you need it while trailering. With packages under $200 a year choosing one of these towing options makes a lot of sense for boat owners and is a relatively affordable form of insurance for things that can happen while you’re on the water.

Your vessel registration whether through your state or the Coast Guard is also a cost to factor in, as is registration for your trailer if applicable. There may also be other recurring annual or monthly registration fees to factor in like fees to use certain lakes, or fees to use a local boat launch.

Usage Costs

While the list of costs can seem never-ending when it comes to boat ownership, one set of costs at least directly relates to enjoying your boat. How much you spend each trip is going to vary by how you use your boat and what kind of boat you own. Sailboat owners are famously frugal and tout their boat’s low operating costs, the wind is free after all. Power boat owners are in a decidedly different boat with fuel costs ranging in the hundreds to thousands for a trip depending on the boat and what kind of trips you take it on.

Things like ice, bait, food should also be counted in. Remember we’re trying to get a handle on what our boat’s ownership costs are throughout the year so adding up what you usually spend on a trip and multiplying it by the times you use your boat each year will help us reach a more accurate figure. Of course, having friends that are willing to pitch in with some of the costs on each trip is always nice and can help defray some of the costs of each trip.

Boat Maintenance Costs

Our previous article on boat maintenance went into a bit more depth on what to expect when it comes to maintenance and associated costs. Maintenance costs are highly dependent on the type of boat you own, how big it is, and how much maintenance you feel is necessary. While a lot of maintenance can be done yourself to save money, some you will need to find a professional to help you out with. Maintenance costs can add up quickly so try to develop a budget for your boat’s maintenance and plan accordingly.

Hypothetical Ownership Costs

I think it’s useful to attach some of these costs to actual boats so we can take a look at what various boats would cost to maintain.

25′ Outboard Powered Center Console

  • Engine Maintenance – $300/year
  • Other Maintenance (waxing/detailing/replacing parts) – $500/year
  • Trailer Maintenance – $200/year
  • Insurance and registrations – $1000/year
  • Usage – $200/trip includes fuel and other expenses.

Our hypothetical 25 foot center console owner can expect to spend roughly $2,000 per year on their boat in recurring fixed costs. A little under the general $100/foot rule of thumb. In addition if they use their boat 15 times a year they’re spending another $3,000 on the boat. You can play around with the usage numbers a bit but remember as you use your boat more your boat’s engine will need more maintenance since that’s done at 100 hour intervals and maintenance on other systems increases as well.

35′ Sailboat

  • Engine maintenance – $200/year
  • Monthly Hull Cleaning – $2.50 x 35 (billed per foot) $87.50 ($1,050/year)
  • Other Maintenance (waxing/detailing/replacing parts) – $500/year
  • Slip Fees – $20/foot per month $700 a month ($8,400/year)
  • Insurance and registration – $800/year
  • Usage – $100/trip

Total yearly costs for our sailboat owner are just under $11,000 in fixed costs before accounting for what they spend on each trip.

Our sailboat owner is saving a lot per trip compared to powerboat owners who often face a large fuel bill each trip. However, boats with a keel are difficult to trailer so they’ve decided to keep their boat in a slip at a local marina. As you can see the slip fees, and associated hull cleaning fees, are the bulk of their expenses. For sailboats kept in the water this is a fairly common occurrence, using the boat isn’t that expensive, neither is any of the other maintenance. Most of the budget goes toward paying for the slip and keeping the hull in good condition.

40 Foot Powerboat

  • Engine Maintenance – $600/year
  • Hull Cleaning – $2.50 x 40 ($100 per month or $1,200 per year)
  • Other Maintenance – $1,500 includes detailing and replacing parts
  • Slip Fees – $20 per foot ($800 per month or $9,000/year)
  • Insurance and registrations – $2,000/year
  • Usage Costs – $300/trip

Large powerboats are expensive to operate and maintain, there’s no way around that. In addition to the slip fees and hull cleaning incurred by sail boat owners, a large powerboat has significant operating and maintenance costs as well. An owner of our hypothetical 40 foot power boat can expect to spend around $14,000 per year in fixed costs. Tack on to that the per trip budget of around $300, a lot of which goes toward fuel costs, and you can see how the 10% of your boat’s value rule of thumb came into existence.

Ownership Costs and Choosing the Right Boat

How much of a role should boat ownership costs play when choosing a boat? That depends on a couple factors, namely how much of your budget can you dedicated to recurring expenses in addition to the purchase price of the boat, and how comfortable are you working on the boat yourself to help save money. In general smaller boats are more affordable not only because they cost less to maintain, store, use, etc. but also because they’re easier to maintain yourself.

Boat owners who expect all systems aboard their boat to work like new are in for a surprise when it comes time to open up their checkbook, ownership costs for a demanding boat owner will quickly add up. In such cases a smaller boat, or one with less component systems aboard, might be a better option than a larger more complicated boat. When choosing a boat you have to be realistic about what you’re capable of doing yourself, how meticulous you are when it comes to maintenance, and what your budget allows you to spend on it. It makes no sense to buy a boat that just keeping it afloat is a major financial strain, even if you can afford the purchase price.

Used boats can be deceptive since a lower purchase price might mask higher maintenance expenses. Older boats have older components aboard which are more likely to wear out and need replacing or additional maintenance than those found aboard a new boat. While boats often depreciate fairly rapidly from new, there is a sweet spot for boat buyers where you can find a boat a couple years old that still has relatively “new” engines and components but at a lower purchase price than the same model brand new. Finding the right boat that matches your needs and capabilities is the best way to save money on your boat’s ownership costs.

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