How much does a boat cost to own and what can you expect to pay to operate it?

A number of people, boaters and non-boaters alike have asked me, how much does it cost to keep a boat? Some are just interested because they are curious, others because they are trying to figure out if boat ownership is for them. I thought I would put together a tool and list out and explain the categories of expenses involved in boat ownership. The cost of boat ownership is more than the purchase price. You can expect to pay roughly 6%-10% of the value of the boat annually in associated costs. This number can vary depending on how much work you do vs having a boatyard do it, where you keep the boat, etc. 

Generally speaking, boat costs can be broken down into fixed and variable and the cost is based on boat length or value. The fixed costs are those you have regardless of if you use the boat or not, e.g. loan, storage, etc. Variable costs are those associated with use, e.g fuel, cleaning, repairs, etc. I will include a sample budget tool to help you estimate your monthly and annual cost.

1. Boat Loan: Depending on how you plan to pay for your boat, the financing can be a large cost.  A boat loan is like a mortgage except they are usually no longer than 20 years and the interest rates are not as low as a home mortgage. Boats, unlike homes, depreciate more like a car and so the risk to the lender is greater. Boat mortgages are usually no more than 80% of the purchase price.  Depending on your individual situation, financing may be right for you.
2. Seasonal storage: There are a couple of options when it comes to keeping your boat during the season. The lowest cost is keeping your boat on a Trailer in your backyard and launching when you want to use it.  There is almost no cost to this unless you need to upgrade your tow vehicle when you buy the boat.  However, there is an inconvenience factor that comes along with keeping a boat this way.  Heading out for a day of boating is more involved and time consuming. The next most cost effective way to keep a boat is on a mooring either yours or a leased one from a marina or boat yard.  A boat on a mooring is more accessible then on a trailer but requires a way to access it either by your own dinghy or a launch. The third place to keep a boat is at a dock, yours or rent one from a marina or boatyard. If you own the dock then the cost is associated with the waterfront property where it’s located. If you rent a dock from a boatyard or marina, you get great convenience and access. Depending on the facility, you may also get access to other things like a bar/restaurant or even a pool. This is the most costly option however.  We have kept both Calypso I and II on a mooring as long as we have owned them. Our boat yard provides launch service included in the cost. 
3. Winter Storage:  Storing a boat off season depends to some degree on where you are located.  Those located in warmer climates may not have an off season, e.g Florida and other parts of the south. In the northeast and other parts of the country where winter comes, you will need to haul your boat and store it.  Again, if you have a trailer, you can store it in your yard for very little cost. If you are somewhat mechanically handy, you can perform all the winterizing yourself. Otherwise your marina can do it for a modest cost.  If you store with a boatyard then you can choose inside heated or unheated or outside and have the boat shrink wrapped to protect it from the weather.  Calypso II is stored outside and shrink wrapped.
4. Haul/Launch: This one is somewhat self explanatory.  In the spring and fall, your boat is launched and then hauled. Assuming you do not do it yourself from a trailer, then a yard will have to do this with a travelift. Typically, hauling includes pressure washing the hull to remove marine growth built up during the season. This is charged at a per foot cost. 
5. Commissioning and Winterizing: Typically prior to launch, the boat will be “commissioned”. What this entails is up to the owner. It can involve as little as starting the engine(s) and ensuring operation is within normal parameters to a full  “commissioning” which includes testing all of the boat’s systems including electronics.The cost is usually based on the number of engines and systems and has a set fee. On Calypso II, we have the engines commissioned but nothing else. Additionally, you may want to have the bottom repainted with antifouling paint. In freshwater this step is not critical depending the body of water you boat on. For saltwater boats, bottom painting is critical. Bottom paint can either be hard multi season paint or soft ablative paint that must be renewed annually.  Bottom pain can prevent marine growth which can seriously degrade your boat’s performance. In past years, we used to apply bottom paint to Calypso I. However, due to the caustic nature of bottom paint, environmental laws have changed so that many boatyards do not let owners do this themselves anymore.

At the end of the season, the boat will need to be winterized, assuming you are not in a warm climate and have to deal with freezing temperatures. Typically, when a boat is hauled, the boatyard will power wash the bottom. In addition, you will need to have the engines and water system winterized. Check out my last blog for a list of winterizing activities. Winterizing usually has a set fee based on what is done.

6. Insurance:  Boats need to be insured.  Well let me put it another way. If you have a loan on your boat then the lender will require insurance. If you keep your boat at a boatyard, then the yard will require insurance. If none of those things are true and you like to roll the dice, then you do not need insurance, all others do. You can expect to pay roughly 1% of the boat’s value per year for insurance premium depending on what part of the country you live in. Those in the range of hurricanes can expect to pay more. As far as a deductible, it is usually about 1-2% of the boat’s value. This is negotiable depending on your risk tolerance and what you want to pay. 
7. Maintenance: Boats break, and they break at the worst time. Accept it now and you will be happier when it happens and not surprised. Therefore it’s best to budget for these things upfront. If you boat in saltwater, they break faster than in freshwater. Saltwater is pretty corrosive to things on a boat. You can manage the corrosive effect with good cleaning and proper care but just be aware of this fact. The newer a boat is, the fewer wear items will need to be replaced. This is similar to a car. There are a number of wear items like cooling system impellers and manifolds that need to be replaced on a routine basis. Not replacing these items can lead to catastrophic failure and much higher expense. Other items only need to be replaced when they wear out with age. Expect to pay .5-1.5%/year in maintenance cost. If you have a good year and nothing breaks, save the money, next year will not be as good. Diesel boats are more expensive than gas boats to maintain but diesel engines are more robust, break less often and last much longer.  Case in point, when changing the oil on Calypso I, our gas Sea Ray 310, the cost was about $180 for both engines including the 10 quarts (2.5 gallons) of oil and filters.  Changing the oil on Calypso II used 12 gallons of oil and I saved the labor by doing it myself.  I spent about $200 for oil and filters. I have heard that a yard can charge up to $800 to change the oil in a twin diesel boat. Yikes!
8. Upgrades and accessories: Let’s face boats have cool gear. You can admit it. We all like to upgrade, replace and modify our boats. From new electronics and dinghy, to those cool underwater LED lights and kick -A%$ stereo with subwoofer. While some upgrades should be done to keep the boat current and up to date the rest is personal. From a cost standpoint, the sky’s the limit. For example. we plan to replace some of the batteries and add SeaDeck to the bridge steps over next spring. I will include what I budget for this area.
9. Fuel use:  The amount of fuel you use is totally a function of how much you use your boat and how much it burns. A small to midsize center console with a single 200hp outboard is fairly thrifty and gas burn will be modest. Calypso I twin her twin 5.7 Mercruiser gas engines, burned 26 gallons.hr at cruise.  Multiply that by $3.00/gallon and you get the idea. Calypso II, which is 2.5 times the displacement of Calypso I,  burns 18 gallons of diesel per hour at $2.55 per gallon. Estimate your use and burn rate from manufactured numbers and you will get pretty close to what you need to budget. 
10. Towing: As mentioned earlier, boats break. They sometimes break down at sea.  Worse, accidents occur and you have an unexpected run-in with underwater objects that causes you to run aground or disable your boat. In these non-emergency situations, you will need a way to get you and your boat back to your home port. The Coast Guard will not tow you home. You will need to call a commercial tow company like SeaTow or TowBoatUS.  If you have a membership with one of these organizations, they will come to your location and tow you to port depending on what membership you have signed up for. If you do not have a membership, then the situation is different.  The tow operator will still come to you but now the cost is negotiated on the spot. If your boat is deemed a hazard to navigation, i.e hung-up on a shoal and in the way of other boats, the tow can be considered salvage.  In that case the cost gets very expensive. Your Insurer may or may not cover it. Do yourself a favor and sign up for a commercial tower. The cost is low, under $200/year and is money well spent. 
11. General use: During the season there will be a cost associated with use.  Outside of fuel discussed above, there are incidentals that come up. If you plan to cruise your boat overnight and stay somewhere other than on your anchor, then you will need to pay for a transient mooring or dock. These costs vary by location. On Calypso II we do many overnight weekends during the season so these costs can add up. Charges are by the foot for a dock and a flat fee for a mooring.  

When you add up all the costs excluding the purchase price and financing, you should leave room in your budget to cover these. This is an important consideration because owning a boat is not just about being able to afford the purchase price. These costs can vary depending on how much work you do and what part of the country or which country you boat in. I will include all those costs in my boat Expense Estimator tool available here.