Why are boats so expensive? Why are boats so expensive to maintain? These are the general questions that both fledgling seafarers and veteran vacationers have asked at least once in their life. In all honesty, the answers you would find here would just about be the same, or at the very least, similar to why other products and services are costly.
We'll take a deep dive into the key reasons why boats are so expensive, as well as provide an analysis of the cost of owning a boat. If you are in the market for a new boat (or new boats) or are simply looking up interesting boat facts and information, then keep reading!
The Main Reasons Why Boats are so Expensive
Supply and Demand
The law of supply and demand permeates through every facet of life, regardless of hobby or industry. The same principle applies to the perceived value, purchase price, and overall cost of boats. The more people want to own a boat, the greater the necessity to supply such people with said boats.
However, boat builders' or manufacturers' research, development, and labour-related production lines are limited (and expensive), which means that the selling prices must go up. Boat building is not an easy thing to do, especially when it comes to the high-end expensive boats fitted with the latest pieces of technology.
Conversely, if demand for a particular type of boat is not that great at any given time, then boat prices for that type or variant will be consequently lower, whether it be by thousands of dollars or a few hundred dollars. The fact that boats are swayed by the law of supply and demand, labor and development, and national rules and regulations, is inescapable.
If you are familiar with the microchip shortage that is happening as a result of the pandemic, then you would be easily able to identify the chokepoints and applications of the law of supply and demand in products and services such as electric vehicles, smartphones or other handheld devices, and, most prominently, computer graphics cards.
Raw Materials and Manufacturing Costs
Speaking of microchip shortages throughout the world, another important factor that adds to the price tag or cost of the boat would be all the raw materials (like fiberglass) involved and the costs of delivery or shipment of these goods to the appropriate manufacturers' production facilities.
The process of ordering raw materials and securing the high-end labour and expertise required involves many a process, from business registration and certification to hiring staff and labour workers, and all the way to quality assurance and third-party auditing.
When it comes to the building blocks of a boat, we must consider the following: Steel, wood, fiberglass, aluminum, and ferrocement (with fiberglass being one of the most sought-after). Depending on the type or classification of the boat entering the manufacturing process, a combination of the aforementioned raw materials must be concocted to create the perfect vessel that is compliant with safety rules and safety regulations.
Aside from the creation of the hull and the reinforcement of all other aspects surrounding the hull, it is also important to take a look at the materials used for the creation of engines, motors, safety equipment, and other types of equipment.
An example, in this case, would be the production of navigation technology.
Another example would be the communication system. These pieces of technology require a different set of raw materials that may include copper, iron, microchips, and other components of electronic circuitry.
Research and Development
We have reached a point in our (sea) lives where we can no longer count the number of different fishing vessels and boat types with ten fingers. Heck, we probably would not be able to count how many different shapes and sizes of hulls there are nowadays! Similar to cars, the boat industry has been thriving.
Also similar to cars, we find boats so expensive these days simply because of the significant advancements and developments as a result of thorough research and innovation.
This factor is arguably one of the most important factors in this list and should help you determine which manufacturers to consider in your boat shopping and boat cost analysis.
Speaking of manufacturers, it is also important to talk about the next significant factor, branding.
Branding
If you are familiar with cars produced by car manufacturers like Tesla, Ford, Mercedes, and Kia, then your familiarity is most likely attributed to the marketing and image promotion these providers have done through the decades to ensure that they are perceived as a company that sells cars of value (no matter how costly).
There are even times when even the practical factors of boats are not considered during the purchasing process. Stuff like fiberglass composition, mooring capability, and engine power may take a backseat to the power of imaging and branding, primarily because some customers would rather buy into the lifestyle than the effectiveness of the boats being considered (more on this in the "Luxury, Lifestyle, and Trends" factor).
Regardless of the motivations and factors prioritized, boat builders and marketing departments work hand-in-hand to ensure that the boats are sold and operated by as many customers as possible. The name of the game is to sell, and there are several people in the boat game that know how to justify a price tag through branding.
Design
As an offshoot of research and development, another important boat factor to consider would be style and design. The most prominent form factor to take a look at would be the entire hull of the boat, but that may vary from boat type to boat type.
Aside from the different designs of the hulls, it is also worth considering the placement or positioning of the different "areas" throughout the boat, such as the lounge (or seats), the steering and navigation area, and the storage compartments, among others. Even the design of the motors may strike you more than the actual horsepower of the engines.
Engine and Engine Power
Speaking of engines, let us now talk about horsepower. Just like in motorcycles, cars, and even airplanes, horsepower is one of the purest indicators of speed and acceleration. It dictates how fast (or slow) you can get from your course of point A to point B.
For the relatively lower-priced boats in the market, there could generally be a significant area of improvement in the motor engine department. On the other hand, boats that have high price tags (luxury) could most likely be the fastest and most powerful motor, regardless of sea conditions and weather.
Of course, this will all be irrelevant if you plan to swap out your motor engine, but it is important to think about it nevertheless.
Luxury, Lifestyle, and Trends
Boats cost expensive not solely because of how effective or practical it can be, but also because of the attached luxurious lifestyle you can maintain when it comes to boat ownership.
Just like owning a Rolex or driving a Ferrari, owning a boat could be considered as a statement piece. Of course, the purists could argue otherwise, but for the crowd that prefers boats such as yachts, we could very easily speculate that fishing and enjoying visiting various marine habitats were not the primary driving factors.
The wealthy and successful crowds oftentimes splurge on boat ownership and boat maintenance. This can also be observed in music videos, TV shows, films, and celebrity stories. If you are the type of person who would rather go for a boat because of the attached pride and trend rather than how fuel-efficient and money-friendly it can be, then by all means!
The more, the merrier.
The Costs of Owning a Boat
Fuel
The most expensive and easily identifiable cost of a boat would be the fuel-related costs. Depending on the type and size of the boat, you will, unfortunately, have to part ways with your money on a regular basis (assuming you use your boat on a regular basis, too).
We would conservatively place the monthly estimate of boat fuel costs at $1,000 to $2,000, but again, the cost will vary depending on the type and size of your boat, as well as how often you actually operate your boat or go out boating.
General Maintenance
Maintenance fees and schedules vary not just based on the type of the boat but also based on the manufacturer. In addition, general maintenance may even include extras or add-ons such as a gel coat enhancement, a paint job, or upholstery maintenance.
The annual cost of general maintenance will vary, but we find it common enough to claim that the cost would most likely be around 10% to 20% of the price tag of your boat when you purchased it.
Boating is no joke, I tell you. The money involved is severe, but the enjoyment and experiences you will get from any boat are irreplaceable.
Repairs
Aside from general maintenance procedures, you would also have to take into account the associated costs of repairs, whether it be emergency repairs or minor repairs.
No boat is invincible, and a lot of the moving mechanisms (and even the fixed components) are subject to wear and tear. Whether it be the leather of your seats cracking and tearing, your steering wheel feeling a bit too loose, or your motor guzzling too much fuel, it is important to store in your mind (and your wallet) a hefty budget for those unforeseen boat circumstances as they would cost a pretty penny.
Storage and Mooring
Unless you live right next to the ocean (or do not mind the commute with your boat trailer), chances are you would have to maintain your boat in a storage and mooring facility nearby.
Rates vary from state to state, but you should expect roughly $50 per day to store your boat, perhaps more if you only plan to store it for short periods of time, and definitely less if you take advantage of monthly or annual mooring packages or deals.
Insurance
Interestingly enough, boat insurance is something that several boat owners do not do, but we advise you to purchase insurance immediately since not having one is to your detriment.
Brand new insurance packages roughly assume the rate of 5% of your boat's current price, and the insurance cost would most definitely drop every year as your boat's estimated cost will simultaneously drop.
5% may not seem like a lot of money, but factoring in certain premiums and insurance adjustment, the insurance costs attached may skyrocket, depending on certain registration protocols and circumstances.
Registration, Taxes, and Fees as per Regulations
Unlike the other costly costs listed, registration, taxes, and fees are not as exorbitant or unreasonable. Depending on the state, expect to pay a few hundred dollars on a regular basis just to remain compliant (sometimes, only one-time payments are required).
Check with your local marine agencies for more details on the boat cost.
Accessories and Add-ons
The beauty of a lot of boats in the market is the ability to have custom accessories and add-ons that will definitely be worth the added boat cost. If you have enough budget left after paying for the necessities such as fuel cost and registration cost, you should definitely look into aftermarket boat add-ons.
A General Guide on Different Types of Boats and Their Costs
Listed below are the typical price ranges for the most popular boat types:
- Yachts: $300,000 - $2,000,000
- Speed Boats: $25,000 - $75,000
- Jon Boats: $750 - $10,000
- Pontoons: $750 - $10,000
- Deck Boats: $750 - $10,000
- Sail Boats: $10,000 - $200,000
Frequently Asked Questions
Are boats worth the money?
Boats are worth the money as long as you have the budget to spend. We do not recommend prioritizing buying a boat if you have other bills and payables to take care of beforehand.
How expensive is owning a boat?
Depending on the boat, boat ownership, including fuel, insurance, and other relevant costs, will net you anywhere from $5,000 to $2,500,000.
Is buying a boat worth it?
Buying a boat is worth it if you truly intend on using it on a regular basis. Otherwise, a boat left inactive for long periods of time is a boat wasted.
Are boats money pits?
Just like cars, choppers, and airplanes, boats can be considered as money pits, so be careful when entering into ownership of boats as it may drain your financial resources.
How do people afford boats?
People who can afford boats are typically those who belong to wealthy families or those who have had successful careers or business ventures. A lot of boat owners are also either very successful fishermen or very passionate sea adventurers.
Conclusion
So why are boats so expensive? Boats are expensive because of a growing demand for them, on top of a shortage in production facilities and raw materials, partnered with clear technological advancements and innovations, bringing the value up by thousands, if not tens of thousands, in dollars.
If you still do not believe in the current market rates of boats, then, unfortunately, you are stuck with the current predicament. We would advise you to either wait it out or accept the fact that marine-based vessels and modes of transportation are expensive and take a leap of faith.
