Are you thinking about buying a boat? It can be helpful to look at the true cost of boat ownership and weigh all of your options before making a quick purchase decision. Much like purchasing a car or a home, buying a boat can be a huge investment. How well it pays off and whether or not you are able to handle the costs will depend on the research you do ahead of time and how willing you are to stick with the discipline it takes to reach your goal.
Taking the time to research the true cost of owning a boat will help you to decide if you are at a point in your financial life where boat ownership is feasible or if you should make your plans for further down the road. Owning a boat might be more affordable than you think, but then again there may be more associated costs that you haven’t considered. This article will focus on all of the areas that you must consider before you make such a larger purchase.
Start Saving for Your Boat
If buying a boat is truly your dream, the best way to start is to begin saving money for a down payment or to purchase the boat outright. Your credit union savings account can be a helpful tool that will help you to grow your money. Interest rates savings accounts and higher payout investment opportunities through your New Bedford credit union can help you to maximize your earning potential. Speak with a representative about our line of credit union savings account opportunities to find out what type of plan would work best for you.
Consider Getting a Loan
Another option for purchasing the boat of your dreams would be to get a credit union loan. While a down payment will help you to lower your monthly payments overall, speak with a local representative at your New Bedford credit union to find out more about loan opportunities that you might qualify for as a member. Once you get the details about how a credit union loan works and what you will need to get one, the better off you will be in making your plans to buy and finance a new boat.
The Cost of the Boat Itself
The first thing that you must consider is the actual cost of the boat. A brand new 22-foot long boat could cost you anywhere between $15,000 – $25,000 on up, depending on the make and model, as well as all of the “bells and whistles” that are included. Putting money away in your credit union savings account to help you with the down payment, accessories or other costs and fees can help you to not feel so overwhelmed throughout the rest of the process.
The Cost of Financing the Boat
Don’t forget to consider the finance charges associated with getting a credit union loan to pay for your new boat. This is when putting money aside through your high interest rate savings or share credit union savings account can help you by reducing the amount that you need to finance, which will ultimately lower the amount that you pay for finance charges throughout the life of your boat loan.
Cost: Varies depending on amount financed and finance rate
The Cost of Sales Taxes for the Boat
The laws on state taxes for boats and personal watercraft vary widely. Make sure you know the law for Massachusetts and Rhode Island for current information on boat sales taxes. Speak with a dealer for details in helping you to figure out this part of your cost estimate.
Cost: Varies by state
The Cost of Boat Registration
There are a couple of registrations that you need to consider. First, there’s the registration of the boat itself and then there’s the registration of your boat trailer, if you are going to own one of those as well. Again, each state varies, so it is important to find out what the requirements are, whether you will be keeping your boat in Massachusetts, Rhode Island or elsewhere in the northeastern region.
Cost: Varies by state
The Cost of Boat Insurance
Another thing that is required by the state you live in as well as by your local New Bedford credit union if you are financing your boat with a credit union loan, is insurance. Insurance rates average approximately 1.5 percent of the boat’s insured value. That would mean that a $20,000 boat would cost approximately $300/year to insure. However, it is important to note that where you dock and store your boat is important and can affect your insurance rates. For example, areas that are prone to hurricanes and damaging storms can yield higher rates.
The Cost of Mooring the Boat
Another cost that many would-be boat owners forget to consider is mooring the boat when it is not in use. Because mooring opportunities are hard to come by – some boat owners wait years to get to the top of the list in busy locations, it can cost anywhere from a couple hundred dollars a month on up to $1,000 per month, depending on the size of your boat and the location that it is moored.
Cost: Varies widely depending on location and size of boat
The Cost of Docking the Boat
Instead of mooring your boat you can also dock your boat. Costs are configured by the length of your boat, meaning the bigger the boat, the higher the cost. Some docks do have flat fees based on the category or type of boat that you have. Check with local docking facilities to find out about costs associated with docking.
Cost: Varies depending on the size and type of boat
The Cost of a Boat Trailer
You really will need a boat trailer, especially in the off-season when you will want to take your boat into winter storage. You can also keep your boat on your trailer at your own property, which is another alternative to costly docking and mooring. Investing in a good boat trailer can help you to save a lot of money over the lifetime of your boat ownership. Consider setting up a special credit union savings account to pay for your boat trailer in addition to the money that you are saving toward your boat purchase, costs and fees.
Cost: $2,000 or more for a brand new trailer or $300-500 for used plus DMV registration fees
The Cost of Storing Your Boat
If you have room on your property to store your boat in a garage or winterize it for outside storage on your trailer in your backyard, then the cost of storing your boat will only include the costs associated with getting it ready for storage. However, boat storage facilities can take care of all of it for you, including hauling your boat out of the water, shrink wrapping it for protection and setting it on blocks.
Cost: $2,000 year for boat storage services or minimal cost for at-home storage
The Cost of Boat Maintenance
The best way to plan for annual maintenance is to figure approximately 10 percent of the cost of your boat, according to the experts. This includes cleaning the decks, replacing the sails, painting the hull, as well as other minor repairs and upkeep.
Cost: A $20,000 boat would cost approximately $2,000 a year in maintenance at 10 percent
The Cost of Gas for Your Boat
A completely wind-powered sailboat would require no gas outside of the cost to haul your boat back and forth to the water. Engine-powered boats should also consider the cost of oil changes and other mechanical repairs in with “the cost of gas” for operation.
Cost: Varies depending on the type of boat and amount of use
The Cost of Boat Safety Equipment
You will definitely want to purchase enough life jackets for each person that will be on your boat. The best way to do this is to get one for each member of your family plus a couple extra for guests. Life jackets cost approximately $70 each, so a set of six would run you about $420. A safety kit should also be purchased that includes flares, a fire extinguisher, a horn and other important items, which runs about $150.
Cost: $550 and up, depending on the number of people who will regularly use the boat
The Cost of Navigational Equipment
Depending on the type of boating that you will do, you might not need to get a fancy GPS or computer system for your boat. However, if you plan on taking big trips or are unfamiliar with the local waters, you might want to invest in a low-end marine GPS system. A high-end system can cost tens of thousands and is not necessarily for every boater or boat.
Cost $200 and up, depending on the type of system you choose
Approximate Total Cost of Boat Ownership
Totaling up all of the costs for purchasing a basic 22 foot boat, not including the taxes, registration and fees that will be dependent upon the state that you keep your boat in, it will cost anywhere between $26,000 and $30,000. That figure includes the first year of insurance, docking, mooring, storage and maintenance, while not counting finance charges or anything else associated with your credit union loan and financing.
It is important to do all you can to research the true cost of boat ownership, whether you live or will be using your boat in Massachusetts, Rhode Island or another local state. Doing this before you head to your New Bedford credit union to get a credit union loan will help. Giving yourself the time to build up your money through a credit union savings account or high interest rates savings program can also be helpful. If you have any questions about how New Bedford credit union can help you on the road to boat ownership, don’t hesitate to give us a call!