It’s a beautiful day and you’ve been out on the water all day. The wind whipping through your hair as you zip around the lake soaking up the sun while enjoying time with your friends and family. And that is how boats draw people in… they are a powerful reminder of good times and fun. They are also, however, a powerful drain on your financial resources.
In this Pro-Tip, I want to make the argument for why you should rent a boat unless you are absolutely certain that you are going to use it at least twice a month or more. Now, there are exceptions to this. One such exception is if you are buying something like a small, flat-bottomed boat and trailer for a couple of thousand that you can store in your back yard and that you will use on local lakes where rentals aren’t available. However, for most cases renting is compelling.
In this article we’ll go over some of the most common costs so you can learn the true cost of owning the boat.
Boat prices can very wildly from $800 flat bottom aluminum boats to multi-million dollar luxury crafts. For most users, however, what you’d likely be in the market for is a 20-25 foot motorboat with some area for laying out, a sun canopy, and options to pull a wakeboard or water skier or a fishing set-up. This type of craft will run you $20,000 more or less, depending on options. (slightly more for new, and slightly less for used). This is also tied to the motor the boat has. In general, plan on $100-150 per horsepower. So, those twin 250hp motors can easily tally up to $50k, but we’ll assume a more modest set-up for our readers. Regardless, you can use the NADA guide to research boat costs.
You also need to consider costs for the trailer ($1000 and up) and for safety gear, gear for wakeboarding, waterskiing, or fishing, and more.
Maintenance, Insurance, & Taxes
Maintenance on boats can vary substantially, but most experts say you should plan on 10% per year, so this means you should plan $2,000 per year on a $20,000 boat. This covers things like cleaning, engine tune-ups, repainting, repairs to the hulls, and winterization so your engine won’t crack in cold weather.
Insurance usually runs at about 1.5% of the cost of the boat per year. So insurance on a $20,000 boat would run about $300 per year, although if you live in a hurricane prone area this can either be excluded or drive your rates up to 5% or more per year, especially if you keep your boat docked.
Taxes can range from 0-10%+ depending on your state. In South Carolina, for example, it can cost you upwards of 10.5%. For our analysis we’ll assume 3%, which is about $600/year.
This means your total for Maintenance, Insurance, and Taxes is $2,900/year.
For buying vs. renting this comes up as a wash, since you’ll pay for gas in any case. But in general you should plan on $50/day out on the water. If you’re out 12 times a year, that’s $600. This varies by boat size, style, and speed you boat at.
Dock & Storage Costs
Dock costs can range from a few hundred to $1000+ per month, depending on marina location, popularity, and your boat size. In general, you should plan on $300-500 per month for docking. This means that you would rack up about $2000 for 6 months of dock fees or $4000 for the year. However, you can cut the costs a little bit by dry storing your boat, which can be very convenient if you boat less frequently as the service includes them taking your boat out, putting it in the water, and gassing it up.
If you live somewhere cold, dry storage is a must, and will run you about $1000 for 6 months of storage. Regardless, you are looking at about $3,000/year.
The brief analysis above can put the cost of owning a boat at $6000+/year in addition to the cost of the boat, which at $20,000 would be about another $400 per month. However, this will be partly offset by the resale value. And if you’re going out with friends? Best you can hope for is to split the cost of gas with them.
So, how much to rent a boat for a day? Typically, this style boat will cost you about $100-150 per hour, meaning it will cost you about $600 for the day. This means that for just the expenses of owning a boat you can rent 10-12 times a year before you are at break-even. For the cost of buying you can throw in 4-5 more rentals per year. This easily covers what most recreational boaters will use over the course of a year with 14-17 total rentals.
Don’t buy the boat! Rent out the boat you want, when you want it, and if you rent less than once a month you will most likely come out ahead. The cost of ownership on items like a boat will run you nearly 30% of the value of the boat a year, making it a financial drain on almost all but the most avid and consistent boaters.
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