Yachts and superyachts are symbols of success. They are attractive to the wealthy but are also very useful business assets. However, they are expensive. In this article, we will explore the price of yachts.
What is a Yacht?
A yacht is a sailing or motor vessel. It is used for leisure, cruising, or racing. Since there is no official definition, the term refers to ships that have cabins and amenities for overnight use.
To distinguish yachts from small boats, recreational boats are at least 33 feet (10 meters) long. On the other hand, it has good aesthetics.
According to the Commercial Yachting Code, yachts over 79 feet (24 meters) are classified as mega yachts. These yachts usually require a proper crew and are built to a higher standard.
How Much Does A Yacht Cost?
To know the context for how much a yacht costs, we define some important terms.
Yacht Terms
Yachting: A sailing or motor boat between 39 and 78 feet in length, accommodating up to 6 guests.
Superyacht: A luxury yacht ranging in length from 78 feet to 200 feet and accommodating 6 to 12 guests.
Mega Yacht: A 200-foot luxury yacht that can accommodate a dozen guests.
Cabin Cruiser: A luxury powerboat between 23 and 38 feet in length.
Day Sailing: Small yacht, usually with a retractable keel, daggerboard or centerboard, and no cabin.
Weekender Yacht: Medium-sized yacht, usually 31 feet long. Usually, they have lift keels or double keels and can do shallow water work for two to three days. Typically, weekend yachts have a simple cabin and a small galley that can accommodate two to four passengers.
Cruise Yacht: The most common private yacht, with good maneuverability, comfort on board, ample interior space, and excellent performance. Typically, they have a teardrop-shaped flat hull with a deep single-fin keel.
Luxury Sailing: Large yachts powered by wind and engines with many luxury features. Typically, yacht builders build these boats with fiberglass hulls and lots of automation, lighting, navigation aids, hot water, and more.
Racing Yachts: Yachts are designed for fast sailing, with heavy and deep bulbous keels, tall masts, and large sails.
Average Cost Of A Yacht
A yacht is an expensive investment. If you want a large luxury yacht over 100 feet in length, you’ll need to pay at least $1 million. Yachts over 100 feet cost about $1 million for every 3.3 feet of additional length; of course, you can still find a yacht that’s not brand new, and on the smaller side (under 100 feet), the price may be a little lower. Typically, second-hand yachts are 50 percent cheaper than new ones, Yang said. For example, a 10-year-old 100-foot yacht might cost $5 million instead of $10 million.
If you want to buy a superyacht, you will get a bigger boat and a higher price. For example, a 100-foot superyacht might cost $10 million to $12 million, while a 130-foot yacht might cost $25 million.
Hidden Costs Of Owning A Yacht
Buying a yacht can be expensive, but buying is just the beginning. There are many other things people forget to consider when buying a high-end boat. Some of these items can include:
Fueling a yacht costs about $400,000 a year, but that price can also include water sports activities that use the fuel. Most yachts usually have jet skis or other boats that require fuel.
Document fee. At $0.50 to $3.00 per foot per day, dock fees typically cost thousands of dollars per month, but the actual amount depends on several factors, including the length of the boat, the dock, and the time of year. Still, if you want to dock or park at the Cannes Film Festival or the Monaco Grand Prix, you can expect to pay more.
Registration If you’re a U.S. citizen and own a vessel that’s 26 feet or more, you’ll likely register with the Coast Guard whether you want to be registered in or outside the U.S.; registration costs about $1,000, Yang said. While registration with the Coast Guard is not required, it is a popular option as this protection is often better than state registration alone. Also, if you want to get a loan from a bank or financial institution to help pay for the yacht, you will need to register with the Coast Guard.
Captain and Docker. A captain and his teammates can set you back financially. Prices depend on the size of the yacht, so if you have a yacht that is 70 to 100 feet long, you may need to pay the captain anywhere from $300 to $375 per day. A partner alone might leave with $175 to $250 a day.
Other crew costs. In addition to paying the crew’s wages, you must also pay for insurance for the crew, including medical and liability insurance, and don’t forget about training costs. All of this can add up to thousands of dollars per month.
Maintenance/painting. Yacht owners are considering giving up to 10% of the purchase price per year to operate and maintain a yacht – and maintenance costs become more expensive over time. A 10-year-old yacht may cost 7.5% of its value just to keep it running and upkeep.
Re-install. Retrofits can constitute anything from a small upgrade to a major refurbishment, but in any case, this is an added price for regular maintenance of the yacht.
Insurance Yacht insurance can cost thousands of dollars a year if it’s not in the six-figure range.
Mixed in between the administrative costs of office supplies and communications support, these miscellaneous expenses can very likely add up to thousands of dollars per month.
Yacht charter. If all these extra costs make you think it might be a better idea to charter a yacht for a while, you’ll want to know that it’s still expensive. Charter costs will depend on the length of the boat, but if you’re interested in chartering a yacht, even one under 80 feet, you’ll want to spend between $15,000 and $35,000 per week.
How to Finance a Yacht
Owning your own yacht may be an eternal dream, but spending money on one can strain your wallet. However, you probably don’t need a ton of extra cash on hand to finance a yacht. There are other possible options that can help you achieve your dream of owning a yacht.
First, it’s a good idea to know your own financial situation. A good way to start is to decide how many boats you can afford based on your current debt, debt, and income. You can do this easily by using LendingTree’s boat loan calculator. Insert the desired loan amount and loan term to see what your estimated monthly loan payments might be. You can even break the ice and stay ahead of the game every year.
After you know how much you can spend, you also need to consider how much to spend on a yacht. Typically, you need to save 20 percent to buy a yacht and have at least twice as much equity in your account — the more equity you have, the better, Yang said. If you own five times the equity, you might only have to put down a 10% down payment. However, if you have zero equity, you will most likely need to put in more, say 30%.
A boat loan can be a solid option to help pay for your yacht. Lenders will look at your creditworthiness, such as whether you have rented other luxury items like a Ferrari or Mercedes, whether you own a $10 million home, and whether you have enough funds. To qualify for a boat loan, you’ll need to fill out an application asking for your income and credit score. Every lender has their own credit score requirements, but typically they’ll be looking for a score of 700 or higher and want to see a debt ratio below 40%. Also, the higher your score, the better your chances of getting a lower interest rate. If you don’t know your credit score yet, you can check it now for free.
Once you have a better idea of possible monthly payments and your credit score, you can shop around and find some potential boat loan lenders. There are many lenders to choose from depending on your financial needs. A possible lender might include Bank of America, which offers boat loans ranging from $5,000 to $150,000, with terms that can start from one year to twenty years. You can discover other places for boat loans by checking out our stories on the best boat financing companies.
Bottom Line
Although owning a yacht is relatively expensive, it is still a huge investment in your health. It will bring you fond memories. There is no other activity that brings family and friends together with a view of the ocean.
