$54,000 for a boat? And I can’t move it?!
April 29th, 2007 | by mbhunter |Our local mall had a boat show this weekend. There were all shapes and sizes: small ones with outboard motors, larger pontoons, all the way up to what appeared to be small yachts.
The upper-end one was $54,000. Our credit union does 100% financing on boat loans up to ten years. The middle of the rate range was 10.75%. For a ten-year loan, that’s a payment of $736.23. That’s more than just a boat payment — that’s pushing a mortgage payment!
And that just gives you the right to take it off the lot. It hasn’t actually physically moved yet. So you need to get a muscle vehicle to tow it around (which guzzles a lot of expensive gas) or pay to have it transported to a marina, which immediately starts charging you rental. Then you need to insure it. Then you need to put minimal safety equipment on it. Then you need “situational awareness” equipment which may or may not come with the boat — VHF radio, GPS receiver, SONAR depthsounder, autopilot. Then you need to buy a lot of fuel for it — which, as you might have noticed, is getting more expensive. Each year, you need to winterize it, clean it, and store it. When things go on it, you need to fix them with marine (i.e., really expensive) components. Some interesting boat cost experiences can be found at Epinions.com.
I’m not really sure how much the salespeople get into these expenses with customers, but I do imagine they practically make the earth move to get financing secured for folks so they can leave with their brand-new boat! And one boat dealer had “Buy Now — Pay Later” taped on all of his boats.
Our credit union (whose rates I quoted above) has two repossessed boats for sale to the highest qualifying bidder. Given what I’ve learned about boat costs from this post, I imagine it’s pretty easy for the expenses to run away from you. Getting a used boat saves on the initial outlay, but as with a used car, maintenance will be more expensive, and the ongoing costs like insurance, fuel, docking, and cleaning will be the same. So it’s still really expensive.
My initial impression was “Who the heck would ever knowingly and willingly get themselves into a financial tango of death like this?” But, apparently, the expense is worth it to some people, even as high as it is. Likely, though, they knew (somewhat) what they were getting into and planned to use the boat for a lot of their leisure activities.
So even though it’s not personally worth it to me, it is to others. But for as many boat owners who successfully maintain their boats, there are others who end up either taking a big loss on them or have them repossessed. The day they got rid of the boat was a happier day than the day they bought it.
The bottom line is that if you purchase a boat, you’d better know what you’re getting into!
A much cheaper alternative: Have lots of friends and some of them will probably own boats!
Cheaper still: Rent a canoe!
6 Responses to “$54,000 for a boat? And I can’t move it?!”
By Matt on Apr 30, 2007 | Reply
Not that much different from owning a brand new car, especially something like an SUV. Sure you can drive it off the lot but it depreciates in value drastically, you have to keep dumping money into it to maintain it, and depending on where you live the cost of insurance can put you into the poor house.
Boats aren’t meant for people with limited incomes; if I hadn’t gotten mine for free I would never contemplate buying one. They’re insanely expensive though they can be fun.
By J on Apr 30, 2007 | Reply
Actually, boat ownership starts making sense if you are a live-aboard. For a single person, you can go to any decent marina and enquire as to what is for sale, and do they permit live-aboards.
You pay by the foot for moorage, and it is typically much cheaper than rent. Extras are plumbing and electrical hookups, which still keep this living option quite economical compared to renting an apartment. Best of all, for those without a lot of coin for a house purchase, with a boat you own some equity for a fraction of house cost. Same argument for trailer home ownership, I suppose.
By VirginiaGal on Apr 30, 2007 | Reply
There is a saying that the two happiest days in relation to a boat are the day you buy it and the day you sell it. Then there is also the definition of a boat – a hole in the water into which you throw money.
Another cheaper option – talk your parents, in-laws, or other close family member into buying a boat (this only works if they are within easy driving distance). It’s win-win, they get to spend time with you, and you get to enjoy the boat.
By mbhunter on Apr 30, 2007 | Reply
Matt — interesting point. I’ve heard this as a caution against parents putting down payments on houses. (Not with you and your boat necessarily.) If the upkeep and/or payments are more than the child can handle, is it really a gift?
J — hadn’t thought about living on the boat.
VA Gal — also have heard BOAT is an acronym — Bring On Another Thousand.
By tinyhands on Apr 30, 2007 | Reply
VAGal took my two best boat comments. My father has owned used boats all his life. Floating death traps, but I’m sure your experience will be better.
By Plus6 on May 4, 2007 | Reply
I have never understood fully the draw of owning these. The amount of maintenance involved is out of the world, and something is always in need of being fixed. I have quite a few friends that are just getting started in their mid 20s and are purchasing these. Wakeboarding is huge in my area so having the latest and greatest is a big deal.