What you should know about boat ownership & how to buy the right boat on BoatList™.
Buying a boat is a big decision, and comes with new financial commitments. Most importantly though, boats are very different from cars. We buy them for different reasons, with different kinds of financing terms, and different insurance and licensing requirements. So before getting into the specifics of how to buy the right boat, there are some general things you should know.
It’s generally believed that a license is not needed to operate a boat. While that’s technically accurate, if you were born after January 1, 1988, most states require you to complete a Boater Safety Education Course to operate recreational boats and PWC’s. You’ll need to take the course and keep the card with you onboard to show to authorities if you are stopped while operating a watercraft.
Boats are not Cars
First, the good news. Unlike cars, on newer boat models it’s possible to get a 15 or even a 20 year loan with a relatively small down payment and a competitive interest rate. So payments for a $100k boat are a lot lower than a $100k car.
In most states, boats up to 19 years old can be financed. If they are of high value, it’s possible to find lenders who finance watercraft up to 25 or 30 years old. Why? Boats tend to hold their value better than cars and depreciate significantly less over time.
Now the bad news. Driving a boat is totally different than driving a car. A boat never comes to a complete stop once you leave the dock. There’s always wind and current moving the boat around when you’re going slow. Even when anchored, a boat will swing from side to side.
Learning how to maneuver a boat safely around other boats is very important and takes some practice. If you want to be an owner / operator, start with smaller boats and move up as you gain experience. Just because you can afford a big boat, doesn’t mean it’s a good idea to buy one and play Captain. Instead, if you want a big luxurious boat, consider hiring a Captain and relax while onboard. That said, joystick operation on modern boats can make maneuvering a lot easier.
If you financed the boat, check with your lender about their exact insurance requirements. You’ll most certainly be required to carry some level of insurance. In most cases, even if you own your boat outright, it’s still a good idea to have liability insurance at a minimum. However, that won’t cover accidental damage, fire, theft or submersion. Boats do sink. Many of them sink at the dock.
While insurance is getting more and more expensive, BoatList highly recommends you get insured before taking delivery of a new boat. If your boat is under 27 feet, and has only one engine you can most likely get it insured with a nationwide auto insurance company like Progressive or Allstate for very little money. Once boats get bigger and have multiple engines, you’ll find significantly less carrier choices and you’ll have little choice besides looking for specialized companies for your type of boat. How much coverage to buy is a personal choice and depends somewhat on the size of the boat and your net worth should you get sued.
Storage / Marinas
If you don’t live on the water, one of the most important considerations is where you’ll store the boat. If your neighborhood regulations allow you to keep the boat on a trailer in the driveway, or the back yard — great! Otherwise, you’ll have to use a storage facility. Either way, you’ll also need a truck to tow the boat to a boat ramp on game day.
The other option is to use a marina facility. There are quite a lot of choices, from dry rack storage, to indoor facilities, as well as in water storage and even boat lifts. Prices are usually charged per foot. The upside of the marina is you don’t have to launch the boat yourself, the downside is you don’t have access to the boat once you leave.
Trade-In Credit and Sales Tax
If you’re selling a boat to upgrade to a bigger one, you can save yourself some sales tax using a trade-in credit. After your auction closes, instead of taking direct payment for your old boat, ask the buyer to finalize the transaction through the dealer or broker who you’re buying the new boat from. Simply trade-in your old boat, and have the dealer resell it to the new owner using the winning bid price.
Having a professional involved usually makes everyone more comfortable, and as a result of the trade-in credit, you’ll only pay sales tax on the difference between the sales price of your old boat and the purchase price of the new boat.
Should You Put Your Boat into a Company or use an Umbrella Policy?
Primarily, it’s best to put a boat into a corporation if you have boat partners and will be sharing the vessel. Forming a corporation to own and maintain your boat is essentially like selling the boat to another person, and has all the same implications, positive and negative — and could trigger tax liabilities.
If you have a note on the boat you are transferring into a company it gets more complicated, as your personal guarantee of the note can have the effect of weakening the wall between you and your company from a liability perspective. Taking out a corporate loan may mean a higher interest rate. You can either sell the boat to the company, or take the risk if your lender allows you to keep the personally guaranteed note.
Another option is an umbrella policy in conjunction with a partnership agreement. A $1,000,000 umbrella policy can be as little as $200 a year, so there’s little reason not to have this additional protection.
BoatList Boat Buying Guide
Please use the How BoatList Works page, if you’re interested in learning how to buy a boat at auction on BoatList, as the rest of this guide focuses more on how to find the right boat and the overall process of determining its condition and suitability for your needs.
Figure out your budget
This sounds simple and obvious, but it’s a good idea to think about the expenses in broader terms than just the acquisition cost or the loan payment. There’s also insurance, storage, and fuel costs — as well as maintenance and repairs. All of these can be significantly higher if the boat is over 30 feet long, as for most people anything bigger is simply not trailerable and requires marina facilities and also buying gas on the water instead of at a gas station. Buying gas on the water can cost as much as 20% - 25% more than on the street.
Determine how you will use the boat
If we remove sailboats for a moment — since BoatList doesn’t deal in sailboats — boats essentially break down into three categories — inshore, offshore and yachts. In the simplest terms, a boat is either designed to operate near shore in coastal waters, or it’s designed to travel long distances in potentially heavy seas offshore.
Inshore boats are ideal for most boaters just starting out, anyone on a budget, and anyone who loves inshore fishing or water sports. This category includes bay boats, flats boats, and skiffs which are generally designed for fishing, diving and exploring. Other inshore boats include dual console open bow deck boats for day trips and water sports like wakesurfing and wakeboarding. Ski and wake boats are specially designed to create ideal wakes for each type of activity.
Most offshore boats are 30 feet or bigger. There’s some notable exceptions — but in almost all cases a larger boat is more stable and offers more space for people and gear. Center Consoles, Convertibles and Express designs are best suited as offshore fishing vessels, whereas speed boats and high performance catamarans are best suited for offshore racing.
If you plan on cruising and spending multiple consecutive nights onboard, cabin cruisers and yachts are likely the right choice offering all the comforts of home with the ability to travel anywhere there’s water. As the size of your boat increases, you’ll have new considerations including whether to hire a Captain and crew. Living on a boat over 40 feet without any help is anything but a vacation. There’s daily meal prep, clean up, boat washing, maintenance — and if you’re on the move you’re in charge of navigating, driving and booking the next marina reservation. As a result, for a vessel 50 feet or larger, we recommend factoring in payroll for your crew in addition to storage, insurance, maintenance and fuel costs.
Determine the size and type of Boat
Between the budget and intended use, you should have a pretty good idea what type of boat might suit your needs. We have created a separate, more in depth blog post that goes into detail about each main boat category and what makes it suitable for specific activities. Read What Type of Boat Best Matches Your Lifestyle?
Normally, to compare specific boats we would say go to YouTube and then to the boat manufacturers’s website. However, we’ve already done that for you!
One of the best ways to compare different types of boats is to use BoatList. Just click on Categories and select the one that best matches your needs. From there, scroll down to explore some of the brands that have boat models listed in that category. Not only can you easily see which brands have the most options for that type of boat, you can also learn about each boat model and its specific features by watching videos, reviewing specs and photos — all on one website — without switching to Google or YouTube.
Better yet, if there’s any live or past auctions for that category, brand or model — you’ll see the auction listings associated with it as well. You can see current bids for live auctions, and where bidding ended given the condition of the boat on past auction lots. If you don’t see any live auctions listed, click the bell icon to set a listing alert to receive a notification when a boat in that category / brand / model is listed for auction.
How to Research a Live Auction Boat Listing
OK — you’ve found an auction listing you want to bid on. Now what?
Well, actually there’s a list of things you should do before you start bidding. First, you should make sure you understand how bidding works on BoatList, how much you’ll be charged if you win. You should also have a plan for taking delivery of the boat. You can learn everything about bidding and buying a boat on BoatList by using the link.
The rest of this post is about how to evaluate a boat and what to look for — especially when it comes to an online listing.
Time is on Your Side
A BoatList online auction listing is actually better than seeing a boat in person in many ways. The obvious advantage is that you have as much time as you need. Nobody is waiting for you, or standing over you while you’re assessing the boat.
What To Look For
The other key aspect is all that data the listing gives you. There are likely over 100 photos uploaded, as well as multiple videos and the listing description. Inspect the photos and look for damage and corrosion. Look at the props and the skegs on the outboards. Did the owner damage them heavily by making contact with objects or the bottom?
Watch the videos and read the listing content carefully. If any questions come up for you, ask the seller in the Q&A section at the bottom of every live auction listing.
The more videos the seller posted, the better — but at a minimum every listing has a boat running video and a walk through video. What’s the fuel burn on the boat at cruising speed — is it within the normal range for that boat? Did the engine reach max RPM’s during wide open throttle? If there’s no video of major accessories actually operating, that’s a good question for the public Q&A section of the listing. Ask about the condition of the livewell, seakeeper or bow thruster if there’s no video showing these major accessories are operational.
The same goes for lights, bilge pumps, the horn, underwater lights, or anything else listed in the boat description — ask about the condition of items you can’t be sure about by looking at the photos and videos.
BoatList has curated content for each boat model we cover, including a video gallery, specifications and photo gallery — as well as all of the past auction listings relevant to that section of the site. It’s a good idea to compare the boat you’re bidding on to the original version produced by the factory referenced on BoatList, as well as any past BoatList auction lots that may be listed. That way you’ll be able to assess the overall condition of the boat better, and you’ll quickly notice any modifications or special options that are installed. Any past BoatList auctions will also give you some reference for what a similar boat — although likely in different condition — received in terms of bids and interest from the market.
Contact the Seller
If you have more private questions you can contact the seller through BoatList by emailing email@example.com. Examples include questions about paying off existing loans, or how long the seller may be able to store the boat for you after the sale. Bidders are not permitted to ask the seller about the reserve price during the auction.
Get a Survey
It’s never a bad idea to get a full survey done on a boat you’re considering. BoatList auctions run 7 days, so there’s enough time to hire a local surveyor to inspect the boat and generate a formal report about its condition. Just use the contact seller button to arrange the timing for the inspection, or you can go and inspect the boat yourself. You should have all your due diligence completed before you begin bidding. All bids are final and cannot be retracted.
A Few Final Tips
Once you start bidding, there’s nothing left to do besides winning the auction. There’s no proxy bidding on BoatList, so you’ll need to keep an eye on the auction and be prepared to be present when it ends so you can bid against other potential buyers. BoatList schedules auctions to end between 7pm - 10pm (ET) whenever possible. Wishing you the best of luck!
Please use the link for more information on Finalizing the Sale and taking delivery.