Making the most of your budget

There are a number of different factors which can affect how you narrow down your search when looking to buy a boat. They are all dependent on your budget, but with careful consideration, you can make the better use of your budget and get a better price than you may expect.
New or Used
Whether you fancy a classic sailing boat, inflatable, fishing boat or houseboat, deciding whether to buy a new or used boat is in part dependant upon your budget. However, there are other factors you need to take into account too.
Buying a new boat suits those who looking to ensure their boat is guaranteed to last for a number of years (say 7-10 years). The benefits of buying a new boat are that you can choose the precise specification and colour ways that suit you. You also have the benefit of the warranty protection that comes with new purchases and have the peace of mind that you can return to the dealer or boatyard in the future for advice, training and assistance with boat maintenance. Also, if you choose to stick with the same brand and upgrade your boat next time, you'll probably be offered a very advantageous part-exchange price on your existing model.
The negatives of buying new are that your boat will depreciate significantly in the first few years' of ownership. Thereafter though, if you hang on to your boat, you may find that it actually starts to appreciate, returning eventually to the value that you originally paid for it! But if your plan is to change or upgrade your boat within 2-4 years, you can expect to bear the brunt of your boat's depreciation.
Generally, unlike cars, boats are not assembled by computer-driven robots and with all the benefits of precision and reliability that comes with it. New boats will have faults inadvertently built in to them, either during the assembly process or in the supply of the components that are fitted to your boat. Times do change though and this is advice is only offered as a warning rather than assuming all new boats carry faults.
Saying this, when you buy a new boat you may expect to use that warranty! The upside of this is that once these initial fixes are carried out, you’ll have the added confidence of knowing how to troubleshoot any problems in the future.
Buying a used boat carries the big benefit that you'll get more boat for your money. Buy a model that's 5 years old and you could be paying half the price of a new one. Even if you buy a boat that is a year old, you could expect to pay up to 20-25% less than the new price. Provided that the boat has been used by its previous owner, all the early fixes required from when the boat was new are likely to have been identified and fixed by the time that you're buying it.
However, there is a hidden price to pay for these benefits. Depending on what you are looking for, you may have to make some compromise on the specification of the boat that suits you best, even if it's just that the colour isn't your absolute favourite. Without knowing the full history of the boat or reasons for it being sold, your decision to buy will rely on how well you can satisfy yourself that the boat you're buying is great value, in good condition and well maintained. You may also receive a limited warranty from a Dealer or Broker that you buy from, but you'll certainly not receive a warranty from a private seller.
Unless you're lucky or you don't make a point of asking, you won't get the backup, advice and assistance during your period of ownership. However, this may not be a problem to you, especially if you're an experienced boater or a very practical D-I-Y type.
Buying new or used should be entirely dependent on what your search for your perfect boat yields. Both have their benefits, both have their downsides.
Where to buy
If you are buying a new boat, this can be more straightforward. In this instance, you should either buy direct from the boatyard that builds the boat of your choice, or buy it from one of their appointed Dealers. Any boat advertised as new and that does not appear to originate from either of these sources should be checked out carefully with the boat builder, before proceeding to view.
When buying a used boat, you have more choices. You can buy from a Dealer who has taken boats in part exchange and now has them for sale, or you can buy from a Broker, who is selling boats on behalf of private individuals. You can also buy from private individuals who have chosen to sell their boat themselves.
In price terms, you can expect to pay more for the same boat from a Dealer who is trying to sell a part exchange, than you are from a broker or a private individual. However this is not always the case and it is something that you should always check with a thorough search. You may well be offered a warranty with a Dealer, particularly if they are selling you a used boat from the brand that they represent. With a Dealer or a Broker you can be assured that all of the necessary paperwork and checks required to protect you, as well as themselves, will be carried out.
Dealers and Brokers’ reputation and future business relies equally on your satisfaction with your purchase as much as the sale. However, the lack of risk from buying from these sources is principally why you'll often pay a lot less with a private seller.
Tip - Find brokers and dealers using our broker locator.
The vast majority of private sellers are genuine individuals who are often looking to upgrade to another boat (and the builder/dealer doesn't take part exchanges) or who are trying to avoid paying brokerage fees and are passing some of that saving on to you in the form of a reduced sales price. Sometimes the sale price can be lower because they want to sell their boat quickly; they perhaps need the funds for other purposes or they are 'bridging' their new boat with their old one.
Occasionally, but rarely, private sellers are not what they seem. It's possible that they could be offering a boat for sale that's stolen or are attempting lure you into entering into a fraudulent transaction and this is this risk that you take when not buying from an established business. But there are steps that you can take to minimise greatly this risk.
Tip - See our Fraud Warning for further details.
Because a private seller needs no sales or even boating experience, there's no guarantee that they'll provide the right paperwork to back up the sale and value of the boat. It'll be up to you to satisfy yourself and unlike with professional Dealers and Brokers, you'll have little recourse in law if the deal goes wrong. There are steps that you can take to protect yourself and minimise the chance of a private seller deliberately or otherwise selling you a 'pup'.
There is no right or wrong way to buy a boat, it's a matter of what suits you and your budget. Whoever you attempt to buy from, don't be put off, just proceed carefully, taking all of the necessary steps to protect yourself and the chances are that you'll buy yourself the perfect boat at a great value price.
Financing Your Boat
Buying from a Dealer or Broker
If you're buying through a Boat Builder, Dealer or Broker - paying for your boat is comparatively straightforward, but be prepared to be asked for a deposit, which may be non-refundable if you back out of the transaction. You should therefore budget for extra costs before fully committing to the purchase.
If you require finance, the seller may be able to introduce you to alternative sources of borrowing (for which they may receive a generous commission for the introduction). This may make the deal run smoother if the seller is in liaison with any lending company that you may choose. Unsecured loans are available from many lending sources for sums of up to £20,000 but often more competitive rates can be obtained by choosing to go for a marine mortgage.
A marine mortgage is secured against the vessel, with the upper limit usually being 80% of the purchase price. Before granting a marine mortgage, the finance house will require a full out-of-water survey and valuation on boats other than brand new commissions. There is a degree of security in choosing this route as the mortgage lender will also ascertain that the boat is free of financial burden.
Marine mortgage companies will also probably require the boat is registered on the official register – Ships Register: Part One or possibly the Small Ships Register. At the time of going to press the cost for a 'Part One' registration can be approximately £200 to register a ship and mortgage, compared to £12 on the Small Ships Register.
Buying from a private individual
Dealing with a private individual is slightly more complex, but not onerous. They will have no interest in how you obtain your funds, just as long as they receive settlement in full. Also they are not professional sellers and will not necessarily know how to formalise the transaction to help protect not only yourself but them as well. So it is as much up to you and in your interests to sort this out, as it is them.