How to buy a used boat, part 1: Getting ready
You’ve been bitten by the bug. You feel the call of the water. No doubt you’re eager to get looking at all the beautiful boats, but first you should figure out what you want to buy.
This article is the first of a series where I’ll guide you through buying a used boat and how long the process takes.
Decide what kind of boat you want 🔗
Every step of the buying process is going to be influenced by what kind of boat you want, so this is important to get right. Things to consider:
What do you want to do with your boat? 🔗
Will you cruise to far-flung corners of the globe? Will you race around the harbor every Wednesday night? Will you party with your friends on the lake? Live aboard, with the boat as your full-time home? There’s a saying that “every boat is a compromise,” so you may not be able to find a single boat that can do all of these things. Deciding which use cases are most important to you will help you home in on what kind of boat to buy.
Sail or power? 🔗
You probably already have feelings on this. Some types of boating activities also imply the boat type – for instance, racing is really only done with sailboats. But for most other purposes, both types of boats will serve you well.
Of course, there are differences: motor boats are faster and aren’t subject to the whims of the wind, but they are expensive to operate due to fuel costs. Sailboats offer a less expensive, eco-friendly ride that many find more relaxing (and quieter).
I’ll admit that before I bought my first boat, I was on the fence. Maybe you are, too. I had never been sailing, and I was very attracted to the space and comfort of a motor boat. However, I took a few sailing lessons and I was hooked. That solidly answered the question for me. If you’re on the fence, I suggest you take some lessons or somehow get out on the water on different types of boats to help you make your decision. You can’t run an effective boat search without narrowing down to one or the other.
Boat Size 🔗
Sized for you 🔗
Yacht broker John Procter phrases this as, “How much boat, given the experience level and knowledge/skills of skipper and crew?” Physically controlling a larger boat is more difficult than a smaller one. And don’t forget the maintenance… larger boats tend to have more systems to maintain, and thus a higher cost.
Insurance companies also often have something to say on this subject. John counsels, “Getting insurance if [you’re] inexperienced can be a problem, depending on how large and expensive the boat is.” It’s a good idea to call some marine insurance companies early on in your boat search so you can get a feel for what size and price they’re willing to insure. If you don’t like what the insurance companies have to say, you may be tempted to not have insurance at all. If you’re financing, the bank will require you to have insurance coverage. If you’re buying outright, most marinas will require you to have liability insurance, which is a good idea regardless. If neither of those apply to you, you can choose not to have insurance, but make sure you fully understand the consequences if something goes wrong.
Sized for your environment 🔗
Think about where you’re going to be using and storing your boat.
Are there any nearby bridges or shallow water? These environmental factors could constrain your choice of boat. You’ll want to ensure that the draft (depth) of your boat allows access to the places you want to go, and that the height of your boat (e.g. masts) will clear under bridges along the way.
How will you store your boat? At a marina? On a trailer in your driveway? On a mooring? These may impose restrictions on the type/size of boat. You don’t need to pick exactly where you are going to keep the boat, but you should at least know there is somewhere you can put it after you buy it, and roughly how much it’s going to cost (we have an article on marina pricing if you find that confusing).
Age and quality of boat 🔗
This one is purely a matter of taste. Within a given budget, generally there’s a three-way trade-off between age, size, and quality. You can typically get more boat for your money if you go older. But is getting the largest possible boat really your goal?
Many older boats, just like older homes, have some character that the modern ones so often lack. Features like tropical hardwood interiors, bulletproof mechanical diesel engines, and overbuilt construction are very attractive. For a certain kind of buyer, they might even sway the decision towards an older boat when the budget could support a newer one. However, newer models will have updated electronics, make more efficient use of limited space, have more creature comforts, and may require less maintenance. Modern hull designs also might be able to go faster and farther with the same amount of fuel (or wind).
Boats that have been well maintained usually command a higher price than “project” or “fixer upper” boats. (I have to say “usually” because every once in a blue moon you’ll find a very motivated seller of a nice boat.) Boats that are more strongly built or of better design usually hold their value better as well, and probably started out more expensive when they were new. You might achieve more time using your boat, instead of maintaining it, if you allocate your budget to a slightly smaller boat of higher quality.
You need to decide where on this scale resonates with your personality and boating goals.
Your budget and financing 🔗
Regardless of whether you’re going to get a loan or buy the boat outright, don’t forget to take into account any repairs or upgrades your new boat might need (your broker and surveyor can help you figure this out).
How much can you finance? Banks will probably loan you less than you expect, yet more than you can afford. Does that sound contradictory? It makes sense once you realize that the loan payment is often only a small portion of the cost of boat ownership. You need to account for all the ancillary expenses, such as maintenance and storage fees.
The minimum down payment on boat loans is usually 20%. Interest rates will be higher than for home loans.
SailsGoal has tools that can help you make these calculations.
Think about boat names 🔗
No doubt this seems premature, but it often takes a very long time to come up with a good boat name, so start a list of potential names early! I started my list about 3 years before I bought my first boat, and it took me most of that time to come up with a name. I kept the list in my phone so I could add more whenever inspiration struck. I’ve continued the list, which provided a name for my second boat, and I still have it going for the future.
- Decide (broadly) what kind of boat you want
- Decide the size range you’re looking for
- Decide the age range you’re looking for
- Figure out your budget, both for the initial purchase and ongoing costs
- Call a couple insurance companies and see if they’ll cover the size you’re thinking about and how much it might cost
Now that you know what you’re searching for, it’s almost time to start the search. But first we should talk about yacht brokers: what they do, why you might want one, how to pick one. That’s the subject of the next article.
My thanks to John Procter for his contributions to this article. John is a certified professional yacht broker with over 35 years of experience based out of Hingham, Massachusetts. I’ve used him as my broker for my last two boat purchases (and one sale), and I consider him the best in the business. If you’d like to contact him regarding his services, he can be reached at Lawson Yachts.