The Price of Ownership

Published on May 16, 2012

When robber baron J.P.Morgan replied to a question about his huge luxury yacht with the now-famous "If you have to ask how much it costs, you can’t afford it," it was an era when only the incredibly wealthy could own a yacht. But today, many families are not only asking the question, but finding that they can afford to own a yacht. A quick look at San Diego’s busy marinas shows that more people than ever are getting out on the water.

But what does it actually cost to buy and maintain a mid-sized yacht in the 28 to 40 foot range? There are as many answers as there are boats, but we\’ve talked to several San Diego experts to give you the details on boat ownership. First, you’ll need to divide your costs into one-time and continuing costs. One time costs involve the actual purchase and outfitting of the boat itself, while continuing costs are the ongoing items such as insurance, maintenance,and dockage.

While we aren’t going into the details of actually choosing your boat, there is one point to bear in mind. Jack Kelly, president of Jack Kelly Yacht Sales and a well-known San Diego yacht broker, pointed out one area where many buyers go wrong. "Too often, they make up a very careful budget and then spend it all on purchasing the boat. They’d be much better off to spend no more than 60 percent of their boating budget on the boat, and leave the remaining money to outfit the boat, maintain it, and take care of any unforeseen needs."

Only the buyer can decide just what type of boat suits their needs, but the basic choice is power versus sail. Once you’ve decided which you prefer, you can analyze what you’d like to do with your boat. If you simply want to go harbor cruising with a few friends, then you won’t need many accommodations and you’ll want more cockpit and seating area. If, on the other hand, you plan to head for Catalina Island with your family, you’ll need enough bunks as well as galley facilities for comfortable living.

You’ll also have to decide whether you want a new boat or a used boat. Price, obviously, is a major factor and a used boat is often considerably less expensive, but you won’t get the exact equipment you want and it is, after all, a used boat. A new boat, however, will require a greater expenditure for the purchase and the outfitting, but you’ll get precisely what you want and you’ll know that everything is brand-new and in perfect condition. The choice is yours, and you should look at both options until you’ve decided.

The first question for boat buyers is usually financing and, just as you would when buying a car, it’s best to shop around for the best deal. Some banks specialize in boat loans, and the boat dealer or broker can often direct you to banks that you might otherwise overlook.

If you’re buying a new boat, then you can expect the dealer to charge for "commissioning," which covers everything from installing any optional equipment or electronics to tuning the engine or raising the mast.

With a used boat, you’ll need to have a survey, which is not only important for your own peace of mind but required by most insurance companies and banks. A survey, done by a marine surveyor, is a comprehensive examination of a used boat. The surveyor pokes, prods and peers into every corner of the boat, itemizes the equipment on board, and gives the buyer a written statement of the condition of the yacht as well as a list of recommendations. These might include minor (or major) repairs needed, equipment that needs service or replacement, and even an estimate of fair market value. The buyer pays for the survey at $3 to $5 per foot (even if he doesn’t finalize the purchase), but it provides excellent leverage for price negotiation as well as an independent evaluation. Since surveyors are not licensed, you should check with your insurance agent or banker for a list of their approved marine survey companies.

State and local sales taxes apply to all boat sales, whether new or used, and cagey buyers can save some money by taking delivery in an area with the lowest taxes.

Even before you sign the check for your boat, you should start shopping for insurance, because it isn’t nearly as straightforward as buying automobile insurance. Prices can vary wildly and I recently received quotes that differed more than 200 percent from the low to the high. Just as with financing, you should look for insurance agencies that specialize in yacht insurance, simply because there are so many clauses in boat insurance that are unfamiliar to the average insurance agent. Insurance for high speed powerboats, for example, is both difficult to find and expensive when you find it. So before you plunk down for that "Miami Vice" speedboat, you should look to see what the insurance premiums are going to do to your budget.

On the other hand, insurance companies that specialize in boats often provide surprising discounts for both your own skills and the equipment on your boat. If, for example, you’ve taken the United States Power Squadron boating class (or the similar U.S. Coast Guard Auxiliary class), you can get as much as 10 percent off your insurance. A boat with a diesel engine instead of gasoline gets a discount, and other discounts apply for built-in fire extinguisher systems, navigational electronics, and more. In some cases, the savings on insurance premiums can actually pay for a certain piece of equipment, such as an electronic "sniffer" that checks for explosive fumes in your boat.

Dockage can be a problem, since there is a shortage of marina space and a growing number of pleasure boats. San Diego, however, hasn’t been hit as badly as other parts of Southern California and slips in popular sizes can still be found without spending years on a waiting list. Slip rates vary depending upon how close the marina is to the ocean, the amenities such as parking and showers, and the general condition of the docks. At Harbor Island West Marina, for example, the monthly slip fee for a 35-foot boat is $296., which includes the water and electricity at each dock.

Maintenance on a boat is another variable item that depends on the type of boat, the usage, and how much you’re willing to do yourself. Every boat that is kept in the water needs to have a coating of special bottom paint, which contains poisons to prevent the growth of barnacles, and this needs to be renewed every year. The paint is expensive, at $60 to $100 a gallon, and the boat has to be hauled out of the water to apply the new paint. Kettenburg Marine, one of San Diego’s leading boatyards, charges $105 to haul out a 35-foot powerboat. Labor and materials to repaint the bottom are additional, and a 30- to 40-foot sailboat takes two to three gallons of bottom paint. Power boat owners generally pay less attention to the condition of their boat bottom than sailors, who want every last bit of speed. Avid racing sailors, in fact, often use one of several San Diego underwater maintenance services which have scuba divers that clean and polish the boat bottom once or twice a month for about $1 to $1.50 per foot of length.

Just like automobiles, there are other maintenance costs that will crop up at irregular intervals. The engines will need regular tune-ups and oil changes, which are done right in your slip by mechanics specializing in boats. Labor runs $30 to $40 an hour and, depending on how often you use the engine, a tune-up is a once or twice a year project.

With modern high-tech materials such as Kevlar and Dacron, sails have a much longer life expectancy than back in the days of canvas and cotton sails. Most sail makers estimate a minimum of five years of normal sailing (or one to two years of hard racing) before replacement is needed, and most sailors stagger the replacements so that only one new sail is added at a time. Since sailmakers tend to specialize in either racing or cruising sails, the prices vary considerably and it pays to shop for the best price, but it’s also wise to choose a local sail loft so that you can get service easily.

Both power and sailboats use other fabric products, such as covers or sun shades (usually called Bimini tops) and, while some sail makers include these in their product lines, they are most usually found at canvas shops that custom produce these for each boat. A powerboat might add a fabric enclosure with clear vinyl windows around the cockpit for protection against wind or spray, while sailboats often add a "dodger," a low top reminiscent of those found on old convertibles, as protection against the elements. With reasonable care, these can last for years.

What’s the next step? Start looking at the boating magazines, and get ready for the upcoming fall boatshows. It won’t be long before you’ll agree with the Water Rat who told the Mole in "The Wind In The Willows" that "There is nothing - absolutely nothing - half so much worth doing as simply messing about in boats."

Or try our Boat Selector!


by Chris Caswell

Category: Sailing , Day Cruising
Tags: Finance