Buying a Boat
Apart from buying a house the purchase of a boat is a significant life decisions. Not only is it a significant financial purchase but the responsibilities that come with it, the ongoing financial commitment and the lifestyle change necessary to use it all require careful thought.
However buying a boat is your passport into a new life of fulfillment, pleasure and joy. It must not be undertaken lightly as you will have responsibility for others on your own boat and those also sailing around you.
As such thing carefully about a number of things:
- What sort of sailing you intend doing
- What sort of experience you have
- What can you afford to pay for your boat
- What can you afford to pay for ongoing running costs
- Where do you want to keep your boat
- Do you want to sail a catamaran or a trimaran
There are lots of issues in all of these questions that will fill a book. So lets give you a few simple directions to get you going:
There are all sorts of ways of buying a new boat, amazingly some do not involve paying full price and these are considered in the article we published in Issue
Now whatever boat you decided to buy you must consider that it is a major expenditure that needs to be financed. If you are fortunate enough to be able to pay upfront with your own money that simplifies the process. However many owners use finance to assist in the purchase of their boat. A useful article on this appeared in Issue 11:
So let us consider the purchase of a new boat. There are obvious advantages to this but do consider what additional equipment you will need to fulfill your requirements, also VAT is likely to have to be paid on the boat. You must also consider that your boat will depreciate in value so that if you sell in say 2 years you may be surprised at the drop in value and that could be less that the value of the finance outstanding.
If you’ve selected a model only available second hand, you then need to find it up for sale, which may be privately or through a broker. View the boat, make your offer, have the boat surveyed and assuming you are able to negotiate satisfactorily on any “problems” the survey may highlight you could quickly be a proud new owner, but beware…. buying second hand has its pitfalls. Unlike a car there isn’t a legal registration document tracking the ownership, in fact unless you want to take your boat abroad, you are not required to register your boat at all and many people don’t, so checking that the person selling the boat actually owns the boat and that there are no outstanding loans secured on the boat can be difficult.
There are some very good sites with independent advice on buying a boat and importantly people on the end of the phone whose job it is to help you through the process:
There are also many excellent publications that will guide you through the process. If you are considering buying a boat, you may find the RYA guide to Buying a Second Hand Yacht – the legal aspects G21 or Buying a New Yacht G10 of interest (follow the links on www.rya.org.uk through to the shop).
It is VERY important to follow the process and not skip a step or two. This is particularly important if you are buying second hand through a broker or not.
The RYA and the YBDSA can provide you with standard agreements and indeed, we urge you to use one of the standard forms of agreement for the purchase and sale of new or second hand boats.
If the boat was home built or if you are considering buying outside the EEA, you will also need to be aware of the Recreational Craft Directive requirements.
The VAT status of a second hand boat is also important as your boat needs to have VAT paid status to be allowed free transit throughout the EU. It is important to understand that the VAT status of a boat can change during the course of a boat’s life. For further information on proving the VAT status of your boat go to the VAT section of the site.
I know that this sounds like a legal minefield. Remember many have successfully trodden his path!
Once you have agreed to buy your boat do not forget to insure it. As a minimum you need to have third party insurance that in UK should be £5 million. However you are wise to protect your asset so do insure it. The amount you will pay will depend on the type of boat, a racing boat will costs more than a cruising boat, where you intend to sail it, where you intend to keep it and how much of the year you intend to keep it in the water. Rates vary but a guide is around 0.75 – 1.25% of the value of the boat.
Useful article on this appeared in Issue 11 and 12
There are many aspects to boat ownership that we consider from time to time in the magazine so we will add to this.
To help you in your search we have some useful tools: