When buying a new boat, there’s more to consider than the initial purchase price. You may have additional taxes, insurance, storage, maintenance, and operating costs. With long term financing, the actual monthly boat payments may be lower than you imagined. While that’s good news for your budget, make sure you are prepared for these other expenses.

Boat Taxes

Many states consider boats luxury items and charge an annual luxury tax. Even if your boat is a modest boat, in the eyes of the state, it’s a luxury. These taxes are in addition to your regular licensing and registration fees. Depending where you live, these taxes may be called luxury taxes, unsecured property taxes, boat taxes, or similar sounding names.

At the time of purchase, most states will charge a sales tax which may be computed differently than regular sales and use taxes. For example, in Texas, boat taxes are imposed on vessels (sailboats, personal watercraft, inboards, and outboards) measuring 65 feet or less. Kayaks, canoes, and other paddle boats are excluded from Texas’s boat and boat motor tax though they are subject to regular sales and use taxes.

Boat Insurance

If you will be insuring your boat, and you most likely will need to do so if you are financing the boat, boat or yacht insurance premiums should be taken into consideration. Depending on the boat’s size, you will need either a boat insurance policy or a yacht insurance policy. Like auto insurance, coverages vary and rates differ amongst different insurance companies. Before you buy a boat, shop boat insurance rates to get an idea of the monthly premiums that you will incur. By doing so ahead of time, you’ll be prepared for this expense rather than surprised by it.
 

Boat Storage

Boat storage on and off the water can be costly and should be considered as you work on your boat purchasing budget. The length of your vessel is generally considered both when renting boat slips as well as storing your boat on land at a storage yard. For example, a 25-foot boat stored at a storage facility in Austin might cost about $50 per month while a 40-foot boat stored at the same location might cost about $70 per month.

Storing a boat at a slip at a marina is a popular option as the boat remains in the water. Depending on the marina’s popularity and amenities, slip rates can vary dramatically. Slip rates in the Austin area range from as little as $60 per month to over $300 per month.

Even if you will be storing your boat at home, you may have unexpected expenses related to its storage. For example, you may want to invest in a portable storage cover to better protect your boat from the elements or you may need to build a separate driveway and gate into your backyard as well as pour a concrete slab.

 
Boat Repairs and Maintenance

Just like your car has regular maintenance and repair expenses, so will your boat. In fact, you will have regular seasonal expenses such as winterizing and summerizing your boat. You can pay a private company to perform these services or you can do it yourself if you have the necessary skills.

If your boat is stored at a marina, you’ll have additional expenses such as boat hull cleaning. While cleaning the hull of a boat that’s stored on land is generally a do-it-yourself job, you’ll need a professional with scuba gear to clean the hull and scrape off the barnacles and algae underwater.

The more complex the boat, the more items you’ll need to maintain including the hull, motor, sails, rigging, bilge pumps, batteries, electronics, water systems, electrical systems, and the boat trailer.

Boat Operating Costs

Operating powerboats is generally more expensive than heading out to the lake for a nice sail due to the cost of fuel and oil. After all, the wind is free. Regardless of how the boat is powered, expect to pay boat launch fees as well as additional fees for fishing licenses if you’ll be fishing.

Boat Accessories

When you buy a boat, chances are it will lack many of the features that you want. Accessorizing your boat can quickly lead to larger than expected bills. Whether you need a bimini top, boat cover, CB radio, stereo system, portable toilet, radar equipment, GBS units, navigational systems, safety equipment, ski or wakeboard gear, scuba gear, new rigging, additional sails, or even a boat trailer, these additional items add up. Related expenses include wet suits, harnesses, goggles, lifejackets, buoys, rope, and gear bags.

Tow Vehicles

If you will be towing your boat or transporting a smaller boat on your car’s roof, your vehicle may need to be upgraded. You may need a complete tow package installed on your truck along with an electric trailer brake controller. If you’ll be transporting a canoe or kayak on your car’s roof, you may need to invest in a set of roof racks and roof locks.