April 10th 2018. By Rupert Holmes.

How much does it cost to own a boat?

There are as many different answers to the cost of running a yacht as there are owners, but this guide will help establish the likely costs for any boat you buy.

It is of course understandable that’s anyone would want to have a good handle on what their prospective future vessel may cost during each year of ownership, and concerns about the cost of running a yacht undoubtedly deter many potential owners. This is particularly true for first-time buyers, who don’t have an established spending pattern that might help to gauge the costs of a perhaps larger vessel than their current one.

However, asking how much it costs to own a boat is somewhat akin to asking how much it costs to own a home. For some the answer to the latter question will be well into seven figures of capital, plus a six-figure expenditure every year. For others a £20,000 deposit, plus monthly costs of less than £1,000 would happily suffice.

Similarly, I know people who run well maintained 35ft boats for less than £100 per month. And others who spend 10 times that amount. Nevertheless, prospective boat owners are right to investigate the potential costs of their purchase. These tend to split into a number of main areas.

Where you keep your boat will make a big difference to your annual costs

For most owners, the type of mooring on which a vessel is kept has the biggest single bearing on annual costs.

Costs of owning a boat

  1. Depreciation
  2. Moorings
  3. Boat yard and routine maintenance costs
  4. Equipment replacement, upgrades and renewals
  5. Fuel
  6. Insurance
  7. Contingencies

Many costs, such as moorings and boat yard lift outs / storage, tend to vary with the overall length of the boat, including appendages. The exception is some Mediterranean marinas that charge on the basis of the area the boat occupies – i.e. length and beam. This means costs increase roughly with the square of the overall length.

Other expenditure, including fuel for motor yachts and sails, rigging and deck hardware for sailing boats, are also non-linear. These may vary with the square of the overall length, or with increasing displacement, which again means larger boats tend to cost disproportionately more to run than a smaller vessel.

Depreciation

Predicting depreciation is never easy, especially in a market that doesn’t have a huge amount of data. Figures will also vary somewhat depending on the style and age of the boat. As a rough guide, new vessels generally lose around 40-50 per cent of their initial cost over the first 8-10 years, with around half that figure loaded on the first two or three years. Once a boat is a decade old depreciation generally slows to less than five per cent annually.

With an older vessel – one that’s greater than 25 years old – there may be relatively little depreciation of the hull and structure. However, the on board systems and equipment will represent a high proportion of the total value, especially as today’s expectations mean these tend to be more sophisticated than in the past. The age and condition of these items therefore has a significant bearing on the boat’s value, but on selling a boat you will only ever recover a fraction of the money spent on new gear and equipment.

With my own boats I tend to allow for replacement of batteries every five years; electronics, canvas, cruising sails and standing rigging every 10 years; upholstery, fridges and other domestic equipment, including generators, every 15 years; and engines every 25 years. This generally results in a pessimistic budget – unless you’re unlucky, with proper maintenance these items will last longer than this – but that gives some extra in the kitty for unexpected expenditure.

Costs of boat ownership: arger boats cost more to keep

Larger boats tend to be disproportionately more expensive to run thanks to complex systems and costs that escalate with the square of the size of the vessel.

Equipment replacement, upgrades and renewals

The above rough guidelines are also a useful starting point for calculating the potential cost of equipment replacement, upgrades and renewals. This is a category in which it’s easy to spend a lot of money, especially for gadget freaks or those who want to travel with as many home comforts and conveniences as possible. It should be no surprise that there are plenty of companies that are happy to take your money in exchange for making your boat bristle with the latest tech. It’s therefore important to distinguish between essential expenditure to maintain the boat and niceties that are not needed if there’s no spare budget.

Moorings

Where you keep the boat will have by far the biggest bearing on annual outgoings. A lot will depend on whether you want the convenience of a walk ashore marina berth with full facilities on tap, or whether you’d be happy to accept a mooring that can only be reached with a tender, water taxi or yacht club / boat yard launch.

At one extreme, for a 40ft (12m) yacht it’s possible to spend up to £10,000 per year on a Solent marina berth, although other alongside and walk ashore options, albeit in less salubrious settings, work out well under half that figure. Mid river moorings in popular Solent areas can be around £1500-£2500 per year and in many cases no longer have long waiting lists. Even in this area sailing club moorings for smaller boats can be found for as little as £300 per year.

In less busy parts of the UK marina prices tend to be more economic and a higher proportion of boats are kept on low cost swinging moorings, where many people spend well under £1,000 pounds per year, even for 40-45ft boats. One option for containing costs is to keep the boat on swinging mooring for the summer, then move to a marina, at a discounted rate, for the winter.

Insurance

This is another cost that is normally easy to quantify in advance. Marine insurance is a competitive market, and prices are surprisingly reasonable, providing you don’t engage in higher risk activities such as racing and long-distance solo passage making. At the time of writing insurance for a yacht with a value of around £100,000 is likely to work out at around 0.4-1.0 per cent of the vessel’s value.

The cost of insurance expressed as a percentage rises for lower value boats, reflecting the fixed costs of administration, and third-party risks. Many owners of boats worth less than £5-£10,000 opt for third-party only policies, which can cost under £100 per year.

Cost of boat ownership: small boats

Financial headaches take the joy out of boat ownership. Opting for a smaller design may therefore provide a better overall experience than one that stretches budgets.

Boat yard and maintenance costs

The cost of maintenance has the potential to be lot less predictable than most of the costs above. However, a minimum baseline is not too difficult to establish. In general, every boat will need a minimum of one haul out each year, plus antifouling, engine servicing and other small underwater items such as replacement anodes. Most yards publish their rates for haul out and storage ashore, so it should not be too difficult to figure out these costs in your local area. One useful tip is to look for summer discounts, where a reduced rate is often offered for up to one week on shore.

On sailing boats, spars and standing rigging should also be inspected annually and key deck equipment such as winches and windlasses serviced. The systems of older boats are likely to need a little more attention to keep them in working order, and buying some spare parts each year is inevitable. The cost of these may vary from as little as a couple of hundred pounds for a relatively simple smaller boat up to several thousand for a more complex and larger vessel.

Fuel

This is a variable cost that changes with the amount a boat is used, but should not be ignored, other than for sailing boats that cover only short distances. With most boat and engine combinations it’s possible to find fuel consumption figures online, which can be used to figure out a rough annual expenditure for the type of use you plan to give a boat and the annual mileage you expect to cover.

Contingencies

There is plenty of scope for unexpected expenditure when owning a boat, especially if you plan to venture far from its home base. This makes it prudent to leave plenty of headroom in both your capital and annual budgets. In many cases a figure of 20 per cent for this would be sensible. Don’t worry if that means the boat of your dreams appears to be out of reach – there is a vast difference in the lifestyles of those who own a boat of any kind, compared to those who do not have one. On the other hand, a larger and more expensive boat only buys an incremental difference compared to a more economic alternative.



Rupert Holmes has more than 70,000 miles of offshore cruising and racing experience, in waters ranging from the North Sea to the Southern Ocean and Cape Horn. He writes about all aspects of boat ownership and marine travel, including destinations, seamanship and maintenance, as well as undertaking regular new boat and gear tests. He currently sails around 5,000 miles per year and in the past couple of seasons has cruised from the UK to the Azores, as well as winning his class in the 2014 two-handed Round Britain and Ireland Race. He also owns two yachts, one based in the Mediterranean and the other in the UK.