An expensive speed boat on the water.

Can You Afford To Own A Boat?

Are you looking to finance a boat? Before you commit to that loan, you should take a look at all of the expenses that come along with boat ownership. You might be surprised at just how costly it is to own that boat of your dreams. Have a look.

The Different Types of Boats

There are a lot of different types of boats that you can buy. Some are designed for specific purposes and some are just for fun. The type of boat that you buy will have a great impact on not only the cost of your boat loan, but also the cost of boat ownership

There are many factors to consider when looking to buy a boat. You want to make sure that you’re buying one that’s suitable for your needs, and also look at the cost. It is not enough to consider simply whether or not you can afford the loan, because all of the other costs can be quite extensive.

Managing Your Boat Owner Expenses

Potential boat owners need to manage their expenses and know how much money they will need to spend on their boat. This is because boat owners have to pay for the upkeep of their boats, for any repairs that may be required, storage, insurance, fuel and a number of other expenses that they may not have accounted for.

It is important for a boat owner to know what expenses they will incur, when, and how much. There are some tools out there that can help you with this process, but it is best if you do your own research and find out what the best option for you will be.

There are many different ways in which a boat owner can manage their expenses, from using an online budgeting tool to using a spreadsheet or even writing down all of the expenses manually.

Whatever method you choose, you need to take action and estimate these costs before you make your boat purchase. Otherwise, you might get into a situation where you can not really afford the cost of boat ownership.

Now, let’s take a look at some of the individual expenses.

The Cost To Insure A Boat

It is important to insure your boat from the beginning. And there are many factors that you should consider when you are looking for a boat insurance policy.

The amount of money that you will have to spend on the insurance depends on a few factors like the type of boat, size, location and even the requirements of your lender.

In general, it will cost less to insure a smaller vessel in safer locations than it would be to insure a larger vessel in riskier locations or an expensive vessel in an area with high crime rates.

Like everything else, boat insurance rates are constantly on the rise but a boat owner can expect to spend roughly 2 percent of the cost of the boat on insurance. So, if you have a 20,000 dollar boat, you can expect to spend at least 400 dollars a year on insurance.

The Cost To Store A Boat

Boat storage can be another big expense and is one that is often overlooked when making a purchase, especially if you are a newbie boater.

Just like with insurance, the cost of storing your boat can vary depending on the type of boat you have, where it is stored and the size. So it is best to check with your local marina or dealer to get an idea on how much they charge for storage.

You can also look to storage lots that specialize in boat and RV storage. Expect to pay at least 100 dollars a month for a basic uncovered spot. That is 1200 dollars a year simply for storage of a small boat. If you have a larger craft, the costs can be much more.

The Cost To Fuel A Boat

Fuel is another expense that novice boat owners do not account for. In fact, most are surprised at just how much fuel a boat uses. Obviously, the amount of fuel used will depend on the size of the boat and the engine or engines that it uses, but even a small craft can be costly.

A small craft with a simple 40 horsepower engine can use 3 to 4 gallons per hour at cruising speed. If your fuel prices are 4 dollars per gallon, that means you are spending 12 to 16 dollars an hour for fuel alone. The outlook is worse for larger craft.

A larger boat with a 200 horsepower engine can easily consume 20 gallons per hour at cruising speed. 80 dollars an hour during operation time is an expense that can not be overlooked.

The Cost Of Boat Maintenance

The last expense we will talk about is boat maintenance. Boats require a lot of it and you need to have it done professionally. This is because you want detailed records of your maintenance for when you eventually sell your boat and with all of the costs of boat ownership, you will likely want to sell it.

The actual cost of maintenance will once again depend on a few factors such as the size of the boat, where you use it and how often you use it. A bass boat used on local freshwater lakes will obviously cost less to maintain than a double outboard ocean going vessel.

If you are curious about how much maintenance will cost, just ask a local deal for the regular inspection and maintenance cost then multiply it out by the times you will need to perform it a year. You could easily be looking at 2000 dollars or more.

To Sum It All Up

There is obviously a lot more that goes into purchasing a boat than just the cost of the boat itself. In fact, your monthly boat payment could be less than the actual cost of operation, maintenance, storage and other fees. As a new boat owner, keep that in mind, because there is a famous saying. The two happiest days for a boat owner are the day they bought their boat and the day they sold it.

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James Car is a finance, loan and budget expert based in the United States. After attending Brookhaven college, he went on to become a successful entrepreneur. He now enjoys writing articles that help people save and make the most of their money.