Getting out on a river, lake or ocean in your very own vessel can be a dream come true.
But while owning a watercraft can provide a sense of freedom and excitement that no other form of transportation can offer, it’s not without costs. In fact, boats can be more expensive than you anticipate, and not just at purchase.
Here is the difference between a boat and a yacht, and how each can come with a vast array of associated costs.
What Is the Average Cost of Owning a Boat?
The first cost associated with a boat is the purchase price. Fish and Ski Marine, a Texas-based boat dealership, reported the average purchase price for a new 20-foot boat in 2023 was between $40,000 and $60,000. If you bought the same vessel used, it would be between $10,000 and $20,000.
Boats come with other upfront costs besides the purchase price. Unless you’ll be buying with cash, you’ll finance the boat purchase.
The typical down payment is between 10% and 30% of the purchase price, and 15% is typical. According to Boat Trader, the average loan interest rate is between 7% and 10%, depending on your credit score, age, the type of boat and the economic climate.
You’ll also need to register your boat and pay the sales tax, which may be added to the purchase price.
Fish and Ski Marine reports the annual cost of owning a standard fishing or pleasure boat typically ranges from $3,000 to $7,500 per year. This includes trailers, insurance, storage and marina fees, maintenance, fuel, education and licensing fees, and equipment and accessories.
[READ: The Best Time to Buy Everything.]
What Makes a Boat a Yacht
Boats come in a vast number of varieties, from those that don’t have motors, like sailboats and catamarans, to those that do, like cruisers, speedboats and yachts. And while all yachts are motorized, for a vessel to be considered one it must have certain characteristics, including:
— Minimum size. In general, a boat becomes a yacht when it is at least 33 feet long.
— Recreational purpose. Boats can have a wide variety of functions, such as sailing, fishing and business, but yachts are designed for comfort, entertainment and pleasure.
— Luxury features. Yachts usually have spacious staterooms, complete kitchens, several heads (bathrooms) and other living spaces. After that there are countless extras, from pools and hot tubs to multiple dining rooms, bars and even helipads.
— Sufficient power. Compared to other types of boats, a yacht’s engine should be powerful enough to travel far distances.
The Bigger the Yacht, the Higher the Cost
For yachts, size is a major factor in the purchase price. Per Galati Boat Sales data, the average costs in 2023 were:
— Small (less than 50 feet): $500,000 to $2.5 million
— Mid (50 to 70 feet): $2 million to $6 million
— Large (70 to 90 feet): $6 million to $15 million or more
— Super (90 feet and longer): $10 million and more
— Mega (165 feet and longer): no average, but $600 million was a current going price
Jim Burns, owner of Knot 10 Yacht Sales in Granville, Maryland, says there are many factors that go into the cost of yacht ownership.
“Keep a boat in your driveway and it won’t cost much, but if it’s in a marina slip, you’re paying for that,” Burns says. “The bigger the boat, the higher that cost will be. Everything is done in feet, and all the marinas vary.”
For example, at the Kona Kai Marina in San Diego, the range is $28 to $60 per foot based on boat length over all (LOA) or slip LOA, whichever is longer. At the Cooper River Marina in South Carolina, long-term dockage is $15.25 per foot.
Boat and Yacht Upkeep Costs
Once you have the vessel, you’ll have to ensure it remains in proper working order. Time spent on the water is a major factor in how much it will cost in maintenance.
“You’re putting a ton of stress on the boat, just from the wear and tear,” says Yosef Shimels, co-founder of Destiny Yachts, a Miami-based private luxury charter company.
“You’re utilizing the AC, the water pump and the generator. Anything can go out at any time. We have to keep reserves for unexpected maintenance costs. I learned that something will go out, and more frequently than I expected,” he adds.
Trish Taylor co-owns Fire Drill Charters, which operates on Lake Michigan, with her husband, and she has a warning.
“There’s a saying that ‘BOAT’ stands for ‘break out another thousand’ and that’s not just one time, but over and over again,” Taylor says.
“And it’s true. Most people have no idea of the upkeep on boats. Boat ownership is different from owning a car. They simply don’t know what they don’t know,” she says.
Be on the lookout for the cost of regular oil changes, fuel filters, adding necessary technology and storage fees.
To reduce the monthly costs of keeping the boat in a slip (if it’s too long to keep in your driveway), you may consider taking it out of the water and paying for a storage space. Burns says $200 a month is typical, but it ultimately depends on the size of the vessel.
If you can’t find covered storage, you may have to pay to have the boat shrink-wrapped so it’s protected against the elements. That too, can set you back. For example, at Michigan’s Pier 33, wrapping a boat between 34 and 35.11 feet will cost $805.
Are Boats a Good Investment?
“Boats generally lose value after purchase,” Burns says. “If you buy one for $100,000, know that you’ll never sell it for that.”
But what you put into the vessel as well as the type can help keep its value or even increase it.
“We own a 1993 Tiara Yacht we bought eight years ago,” Taylor says.
“Because of the tech and performance upgrades as well as a sought-after style that’s not made anymore, it can go for double what we bought it for. Buyers recognize well-maintained boats that have been upgraded to make the boating experience even better,” she adds.
[Things You Can Rent Instead of Buy]
Is Buying a Used Boat Worth It?
“In most cases a used boat is a phenomenal option,” Burns says. “For a 43-foot yacht you may pay $43,000 because it’s 25 years old. To buy a new one it can be millions.”
Do make your purchase through a qualified broker, though.
“Private sales can be risky,” Burns says. “It’s like buying a used car from a person online. As a broker we go through a process and handle all the transactions so the buyer gets a legal boat, and in a condition that’s acceptable for their intended use.”
It’s especially important to buy a used boat with the assistance of an expert if you’re a first-time boat owner.
“If you don’t, you won’t know what to look for,” Burns says. “What’s underneath the shine? These things can cost tens or hundreds of thousands of dollars. It could be rotted out from moisture, and a fix could cost $30,000.”
[see: Things You Should Never Buy Used]
Pros and Cons of Owning a Boat
In the end, there are many reasons to have a boat or yacht of your own.
“They are pleasure crafts, so it’s tough to put a price tag on being with your family, hanging out at a really good marina and having fun,” Burns says.
Shimels says chartering the boat out helps cover costs and provides him with residual income. “It’s also a tax benefit, because I can write off the depreciation,” he says.
As for the disadvantages, they include the unpredictable costs. “We just had an unexpected repair,” Shimels says. “A generator just went out, and it was $10,000.”
Finding the right people to help keep the boat or yacht in good working order isn’t always so easy, either.
“You have to find a good mechanic, someone to do the cleaning,” Shimels says. “There’s a variety of people you have to rely on.”
Finally, not everyone can handle the money and stress of boat ownership, and that’s OK.
“We’ve had customers who sold their boat and simply do multiple charters with us,” Taylor says. “All they do is walk on, fish and pay us. They love it. No cleaning or upkeep anymore for them.”
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How Much Does It Cost to Buy a Boat Versus a Yacht? originally appeared on usnews.com
