Many prospective yacht owners tend to overlook a few of the hidden costs of owning a yacht when deciding on making the initial purchase.
Yacht ownership comes with other costs such as maintenance, insurance fees, and even storage costs where the yacht will stay at a marina. It is paramount to understand these costs before buying a yacht. This article covers the actual cost of owning a yacht aside from the purchase price.
Additional Costs of Yacht Ownership
Experts say that the cost of owning a yacht tends to be over $55,000 per year. If you purchase a standard well-maintained vessel at a reasonable price, this annual cost could not be as high. Below are the recurring fees for owning a yacht that you should consider before purchasing one.
In Use Costs
There are a number of costs that you might expect that go along with actually using your yacht for vacations.
They will vary based on a number of factors like length of trip, duration, how many people you haveon board and more. Here’s a short list of the costs incurred while actually using your brand new yacht:
- Fuel: This will depend based on your area, how long your trip will be and how far you’d like to travel on each trip.
- Food & Beverage Supplies: Having enouough food, drinks and snacks on your yacht during your vacations is important unless you plan on staying very close to the shore.
- Mooring Fees: Definitely more expensive than the local parking garage, mooring fees are the costs to park your yacht, and vary across the world. They are typically charged by foot.
- Yacht Crew: Unless you’re planning on hadnling your yacht by yoourself, you should expect some crew fees or salaries. You can rent full crews for weeks at a time, but they’re not cheap.
Yacht Insurance Costs
Insurance is often overlooked when owning a yacht, but it is crucial. Without insurance, your vessel will be highly vulnerable to large losses if anything happens. The insurance cost will vary depending on the insurance you need and the premium you have to pay. However, do not forget that yacht owners have to carry liability and collision coverage aside from the primary insurance policy.
Among the insurance coverages you’ll need to purchase is accident coverage. It covers damages to other boats or structures around, which will cost you extra money each year. Typically, the total insurance policy cost per year could be 0.8 to 1.2% of the yacht’s price.
Yacht insurance costs can vary depending on your years of experience, the type of yacht, location, and age of the boat. Personal accident coverage helps minimize losses if there is damage to property, injury, or death during a yacht owner’s activities inside or outside your boat.
That means you will be protected if an accident happens aboard your yacht. Collision coverage is another insurance policy that is a recommended minimum requirement for all boats at sea.
It protects your boat from huge payouts if there is a collision with other boats or structures such as bridges, docks or piers, etc. The cost of this cover can range from 5% to 10% of the value of your yacht.
The insurance policy depends on what risks you need to protect against and how much premium you are willing to pay for those risks.
It will also depend on the different types of policies available – you can choose a policy that covers all risks or one that only covers a particular type. It is essential that you carefully go through all aspects of buying yacht insurance before making this purchase.
Yacht Maintenance Fees
These are even more costs that are incurred from using a yacht you may not think about. Maintenance costs can vary from pretty cheap to extremely expensive. But just like the cost of the operation, maintenance is also crucial in ensuring that the vessel will not be susceptible to major damage. The cost of maintenance varies depending on what type of yacht you have.
It can range from a few thousand to about a million dollars per year, depending on the yacht and the type of repairs you will need. These costs could include regular maintenance of equipment such as the engines, electronics, generators, propellers, and the hull. It could also include painting and interior works such as marble work or re-decorating the yacht if you feel it’s time for an upgrade.
Yacht Harbor Fees
The other annual expense you should not overlook are the harbor fees. It is a yearly charge that will be paid to the harbor company or yacht club. The reason is that they are providing the dock space in which you keep your boat stored in a safe environment. They will charge you every year. Depending on the harbor and your yacht size, it can range from $2,000 to $3,000 a year.
Even though some yacht owners decide to try dry-docking, it can be pretty expensive given the transport, handling, and storage involved. Dry-docking can cost anywhere from $5,000 to $10,000, depending on the yacht’s size and the dry-docking place. However, these are not the exact estimates; you can always visit a marina near you to check the harbor expenses.
Depreciation is value lost over time after the initial purchase price. Practicing proper maintenance and repairs can help limit the amount of depreciation your yacht’s value incurs over time.
The Bottom Line
The good thing about yacht ownership is that it can be one of the most lavish things you can splurge on. As mentioned, you will have a lot of fun, and you will enjoy your time on the open sea. The downside, however, is that it will be expensive and a lot of work. Maintaining a yacht for years in perfect condition is not easy, but you are good to go if you have a passion and a deep love for it.
If spending tens of thousands per year or more isn’t your thing, you shouold definitely opt for the more cost effective option of yacht charters. Chartering a yacht will be significantly less expensive and you’ll still be able to enjoy life at sea for a day or week at a time, with no maintenance fees or hefty insurance payments.
If you’re looking to rent a yacht in San Diego, our yacht rental service is for you. Our crew is extremely friendly and focused on your happiness at all times. Give us a call to book your San Diego yacht rental today!