Tips For Buying A Boat

By Charles Fort

When it's time to buy a boat, you'll need all the tools available to score a great deal.

Photo of a boat show

Wonder just how popular boating is? In the United States, one in three American adults participates in boating every year. That translates to a lot of boats, and a lot of people buying boats. In fact, 1.5 million of us buy a new or used boat every year. Whether you're a first-timer or an old salt, there are things you can do to ensure that your next purchase goes off without a hitch. BoatUS Consumer Protection has been helping BoatUS members navigate the sometimes choppy waters of boat buying for more than 40 years and can guide you through finding a boat, warranties, service contracts, inspections, financing, insurance, and the necessary paperwork to make it all legal. If you're in the market for a new boat (and who isn't?), here's what you need to know.

Shopping For A Boat

Once you've decided on how much you can spend, you get to dive into the fun part, actually searching for your dreamboat. New boat buyers will want to find a dealer for the brand they're shopping for in their area. Ask around and do some research to find a quality dealer.

New boats come with manufacturer warranties that vary widely in their coverage, so compare them before you buy. Look for multi-year warranties for hull and engines. Find out whether the warranties transfer to subsequent owners, which can add substantial resale value. One advantage of buying from dealers is that they can also take trade-ins, but keep in mind that as with cars, you won't get top dollar because dealers have to make a profit on reselling your boat. Selling it yourself will usually bring in more money.

Used boat buyers have a couple of choices. Larger boats are often sold by boat brokers, who operate like real-estate agents. Buyers can hire a broker to help them find a boat, and the commission is usually split with the seller's broker, so there's no cost to the buyer. Smaller boats can be found online at such sites as eBay and Craigslist, but remember that these offerings carry the risk of fraud. There are many unscrupulous "sellers" who'd like to separate you from your money. Be wary of sellers who insist on using a specific online escrow service — it may not be legit. Ask to see ownership documents to verify that the seller really owns the boat. If the boat isn't local, hire a marine surveyor in the area, or have someone you trust verify that there really is a boat and that the seller has the title and registration.

Marine Surveys

Too many complaints to Consumer Protection start with "The seller said that everything worked fine, but when I launched the boat, I found all kinds of problems!" Unless you're looking at a simple, inexpensive boat, hire your own expert to inspect it.

A condition-and-valuation survey is a snapshot of the condition and value of a boat; think of it as an independent document that speaks for the boat. Marine surveyors will check the condition of AC and DC electrical systems, plumbing and thru-hull fittings, deck hardware, propane and fuel systems, steering and controls, and safety equipment. A proper marine survey will be an in-depth written report that evaluates the boat according to U.S. Coast Guard regulations and to American Boat & Yacht Council and National Fire Protection Association standards. A knowledgeable surveyor will also know if a specific make has a history of major problems. A survey is a useful tool for buyers to negotiate a price based on what repairs or upgrades the boat needs. Surveys are sometimes required for insurance and financing, but most buyers should get one even if it's not required — it can easily pay for itself by uncovering potentially expensive repairs, and it gives you a firm value from which to negotiate. Surveys cost from $15 to $25 per foot.

Sales Contracts

Once you've determined that the boat you want is sound, the next step is to complete a sales contract, then pay for the boat. Dealerships and brokers should have their own contracts, but make sure you go over them well. Consumer Protection has had complaints about dealer contracts that had missing or incomplete information, leading to disputes after the sale. If you're buying from a private party, go to my.boatus.com/consumer to download a sample sales agreement or bill of sale. Fill it out completely, and don't forget to list the boat's Hull Identification Number (HIN) and all engine serial numbers. If there's a trailer involved, don't forget to list its serial number. Make sure the terms of the sale are spelled out. Is the sale contingent upon a satisfactory survey and/or sea trial? How will your deposit be returned if the sale falls through? Is there a trade-in? For new boats, request a firm delivery date and a list of all warranties. All contracts should have a statement that the boat is free of all liens and encumbrances. If you're financing your boat, be prepared to provide personal financial statements and tax returns; boats are considered luxury items, so the process is more akin to buying a house than a car. For more on extended contracts, see "What About Extended Contracts?"

Insurance

Only a few states require insurance, but that doesn't mean you don't need it. Even if your bank or marina doesn't require your boat to be insured, having it could save you problems if you're involved in an accident, especially if there are injuries. Usually, homeowner policies won't cover boats larger than a certain size and greater than about 16 feet in length and worth more than about $3,000, and they rarely have the necessary provisions to cover losses that may occur with a boat, such as fuel-spill liability or wreck removal. The more your boat is worth, the more important insurance becomes to protect yourself from financial loss. Not all policies are created equal; look closely at the policy provisions outlined "Do I Need Boat Insurance?" when you're deciding which policy to buy.

Post-Sale Details

Now that you've had the boat inspected, paid the seller, and are holding the keys, the boat isn't really yours until the seller signs over title. (But not all states require titles; go to www.BoatUS.com/Gov to see a list of the states that do.) Look over the paperwork carefully and make sure the HIN on the boat matches the title. Most states require trailers to be registered as well, so make sure you have those documents, too. In most states, boats with motors will have to be registered. Larger boats may need to be documented. 

— Published: August/September 2015


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