Imagine the sun on your face, the wind in your hair, and the sound of water lapping against the hull as you glide through the waves. Becoming a boat owner can bring joy and adventure, but deciding between a new or used boat will mean evaluating your budget (along with your tolerance for risk).
Consider these Factors to Make an Informed Decision
Before purchasing a boat, new or used, you should be able to answer the following questions:
- Where will you take the boat? (Only inland lakes or offshore, too?)
- How will you use the boat?
- Will you trailer it or keep it at one designated location?
- How many passengers do you expect? What are their ages?
- How much boating experience do you have?
- What is your budget for the purchase itself? Will you need a loan?
- What is your budget for the operating expenses? Expenses such as insurance, storage fees (check out Neighbor for innovative storage solutions), fuel, and maintenance (planned and unplanned).
A lower price on the wrong boat isn’t the wise decision you think it is. Think very seriously about who, where, and how the boat will be used.
Cost Comparison: New vs Used Boats
Purchase Price and Depreciation
Many experienced boaters prefer buying a used boat to avoid the depreciation that a buyer of a new boat will incur.
The price difference between a new boat and its four-year-old counterpart is usually about 20%.
Typically, 4-year to 6-year-old boats are still in relatively good condition. Because of this, the discrepancy between a new and used boat won’t be as dramatic.
However, at the 10-year mark, the price difference could exceed 35% as the used boat’s condition steeply declines.
As expected, the cost of a used boat will vary by the boat’s type, brand, and model. In the same way, used boat prices will fluctuate depending on the boat’s location, amount and type of use, and whether it’s been well-maintained.
Insurance and Maintenance Costs
Insurance rates are determined primarily by the value of the insured boat. Comparable used boats have a lower value, so their insurance rates should be less.
Generally speaking, average costs should be about $200 to $500 annually. However, most insurers offer opportunities for discounts.
CAUTION: The total cost of boat ownership is often grossly underestimated by first-time buyers.
Maintenance costs will vary from boat to boat, even those of the same brand, model, and year. The warranties on a new boat reduce maintenance costs, but even a new boat may not be problem-free. New boat warranty periods vary for different equipment or systems. Some warranties extend only to the original owner.
The Condition and Appearance of New and Used Boats
Considering the condition of a pre-owned boat is crucial when evaluating boats. Aesthetics is frequently important to buyers.
Structural and Mechanical Integrity
The structural integrity of a pre-owned boat should be thoroughly examined. Remember: even “minor” problems like leaky windows can eventually result in a large loss.
Thoroughly inspect the hull inside and out for rotting wood and weaknesses. Online resources discussing DIY inspection techniques are available, but a marine survey is your best protection.
Don’t let the seller or his broker recommend a surveyor! Choose your own surveyor.
In this inspection, don’t forget to check the integrity of life-saving mechanical components, like engines, electrical, plumbing, steering, and emergency dewatering systems. Don’t forget about the generators or air conditioners, either.
Boat Maintenance Records
Ever notice that you can score the best boat prices a few months after a hurricane? If a boat was damaged as a result of a recent hurricane, an affected boat owner may try to pawn off their fixer-upper on buyers like yourself. That’s why you must review all available maintenance records. Marine surveyors may have special access to a boat’s repair history.
Aesthetics
The sleekness of a freshly-polished, modern boat can reel just about any boat buyer. It’s hard to fight the forces of that New Boat glow. While used boats’ appearances may convey a classic, traditional look, they could also just look outdated and grungy.
But don’t rule out a used boat quite yet. It’s surprising how much grunge can be polished out and spiffed up, but, remember, ugly or inefficient design is forever.
Buying Options: Dealers, Brokers, and Private Sellers
Dealers
Advantages of buying from a dealer include::
- Access to new models
- Possible access to special packages and financing
- Greater confidence you’re buying a seaworthy and well-maintained vessel
Buying from a dealer can have its drawbacks, such as potentially higher prices and limited availability of certain boat types or models.
Brokers
Boat brokers provide services similar to real estate brokers. You buy the boat through the broker, not from the broker. The seller is still an individual or dealership. Brokers can serve as either a seller’s or buyer’s agent. Using a broker offers the following benefits:
- Retaining a broker as your buyer’s agent DOESN’T increase your cost
- Your broker’s market knowledge and experience with many boat types boats is an immense help, especially for first-timers
- Your broker can advise you on negotiation strategies and conduct negotiations on your behalf.
- Many brokers are members of professional organizations with mandatory codes of conduct.
The major catch in dealing with brokers is understanding that the seller’s broker is acting on the seller’s behalf. Your broker should represent only your interests. Therefore, you should be the one to select your broker and make all the final decisions during negotiations.
Private Sellers (Unrepresented by a Selling Broker)
Purchasing a pre-owned boat from a private seller has both risks and rewards. Benefits include:
- They may be more willing to negotiate the sale price
- They may provide access to at least some of the boat’s history
- Buying directly from an individual may save money versus a dealer or broker sale
Remember, buying a used boat from an individual lessens assurance of the boat’s condition.
Financing
The following information from Bankrate compares the pros and cons of financing purchases for new boats and pre-owned boats:
| PROS – NEW BOAT FINANCING | CONS – NEW BOAT FINANCING |
| Possible lower rates for creditworthy borrowers. | The overall cost of the loan will likely be higher. |
| Long-term maintenance costs may be less expensive. | Higher monthly payments because of the larger loan amount. |
| Lenders may offer to cover the full cost of the boat. | Most lenders require an excellent credit score for approval. |
| PROS – USED BOAT FINANCING | CONS – USED BOAT FINANCING |
| The lower loan amount may reduce overall costs. | Some lenders may not offer loans for older boats. |
| Depending on the lender, your credit, and the price of the boat, interest rates could be lower. | Used boats may pose more of a long-term financial risk. |
| Potential maintenance costs may offset any savings. |
Takeaways
Whether you decide to buy a new boat or a used boat, these guidelines should help:
- Determine your budget and funding source(s)
- Get a better sense of how you plan to use your boat and the age demographic of your frequent passengers.
- Identify the type(s) of boats (pontoon, cruiser, bass boat. etc.) that meet your non-negotiables.
- Research that segment of the market using online resources such as Boat Trader or Yachtworld
- See lots of boats. Use online resources to learn to inspect a boat yourself
- Once you decide on “the right boat”, carefully inspect it and make an offer
- Depending on the price, hire a surveyor (don’t let the seller hire the surveyor)
- Test drive the boat, with the surveyor if you hired one
- Evaluate the boat’s “saleability” (search for liens and confirm ownership), as well as its “insurability”
- After closing, you’ll need storage for your boat. Check Neighbor’s for boat storage nearest you for your choice of outdoor, enclosed, wet, or dry storage options.
