For many, buying a boat is one of the more enjoyable experiences in life. It certainly has the potential to be one of the most life-enhancing purchases you can make, opening up a new world of time on the water with friends and family. However, like buying a house, it can also be stressful, and that’s where this boat-buyer’s guide aims to provide assistance on each step in the buying process you need to consider.
There are many guides available to help beginners buy a boat for the first time, including several that we’ve published. Boat buying for absolute beginners, published on the US version of boats.com several years ago, addresses the reasons for buying a boat and the uses you might have for a boat. There are others on the UK version of the site, including the lighthearted Good reasons to buy a boat.
In this guide, we’ll start with the assumption that you’ve identified a suitable vessel. If the boat is brand new, much of the following will be handled by your dealer as a matter of course, but it’s still worth reviewing each step so you can go through the process with your eyes open.
Your first step, especially in the case of a used boat, is to ensure the seller actually owns the boat and that there are no outstanding encumbrances such as unpaid marine mortgages, boatyard charges, or mooring fees. And private seller, dealer, or broker should be knowledgeable about the boat and be able to provide sufficient documentation to support claims of ownership.
A yacht broker or dealer who is a member of an association with a code of practice its members must adhere to, such as Certified Professional Yacht Brokers, the British Columbia Yacht Brokers Association, or Boating Ontario Dealer should compile all the relevant paperwork. This provides more assurance than buying a boat privately, and there’s also a degree of legal protection. It’s important to note that, unlike when buying a used car, boat dealers rarely own the second-hand vessels they advertise – they are merely acting as agents.
BOAT TITLE DOCUMENTATION
It is important to see title documentation for the vessel, including bills of sale, the documents that transfer legal title in a boat. Ideally these should show a complete paper trail back to the original builder’s certificate. In reality older boats (particularly those more than 20-30 years old) may not have a full set of documentation. However, any owner should be able to present a bill of sale showing they actually bought the boat, as well as other documentation such as receipts for moorings, boatyards, and so on that substantiate their involvement with the vessel over a period of time.
Pleasure boats in Canada may be either licensed or registered. The Transport Canada website provides a Canadian Register of Vessels page explaining the differences. For information on licenses, see Pleasure Craft Licenses: Questions and Answers. Follow links on the Transport Canada site to download forms, learn about travelling abroad, and more.
ARRANGING A VIEWING
Check that the seller is knowledgeable about the boat and has a legitimate reason for the sale. Ask yourself whether the price is similar to other boats on the market. If a deal looks too good to be true, it probably is. In most cases it’s unlikely that you will be able to arrange to view the boat at the seller’s home address, as you would expect to when buying a used car privately. If after viewing a boat you’re interested in the vessel, then it’s worth speaking to the boatyard, marina, or mooring operator where you viewed it, to confirm they know the vendor and that there are no outstanding bills that could be levied as a charge against the vessel.
Any costs that involve the trial, such as launching or skipper fees, where applicable, would normally be the responsibility of the buyer, not the seller. This is an opportunity to ensure that the equipment is all in good working order. With a sailing boat, for instance, you can check that all sail-handling systems, plus items like the anchor windlass, operate as they should. Similarly, engines should start easily, both when cold and warm, and should not produce undue amounts of smoke.
NEGOTIATING THE RIGHT PRICE
You want to make sure you do not pay over the market price for your boat. Searching boats for sale on boats.com will allow you to get an idea of the value for similar boats, although the value of boats can vary enormously based on equipment, condition, and other factors, including location.
To get the best evaluation, you need to look at various sources of information to help, which can include other sites like YachtWorld and owners’ forums. The US boats.com site carries a helpful article on how to determine boat prices using NADA Guides. Most yacht brokers also have access to details of actual selling prices over time should there be no other similar boats for sale on the market when you’re buying. The more research you can do, the more accurate a picture you will have of a boat’s value. Once you have a good idea of the boat’s fair value, speak to the seller using your research information to help negotiate the price to pay.
While the cost of purchasing the boat may be substantial, it’s also essential to bear in mind the costs of maintenance, mooring, insurance, certification, winterisation, and many other factors, depending on the type, size and age of the boat. Also remember that the final price will include all applicable provincial and federal taxes.
Once an offer is accepted – usually subject to survey – then you enter into a contract in which you are legally bound to buy the vessel. Note that the stage at which you enter into this legal obligation happens much faster than when buying a house.
A written contract is advised in any purchase or sale, laying out the terms and conditions relating to the sale and purchase. Dealers and brokers will use industry-standard forms. If the sale is private, contract templates are available. Contracts normally give a two-week period for a survey to be carried out and are binding unless material defects of which seller and purchaser were previously unaware are uncovered by the survey. At the same time as signing the contract a 10-percent deposit is normally paid. With a boat sold by a broker this should go into the company’s client account, which protects the amount from creditors should the business go bankrupt before the deal is concluded.
A full-condition survey, often known as a pre-purchase survey, is the most appropriate when looking to buy a boat, whether it is new or used. This comprehensive and detailed survey is a non-destructive examination of all accessible areas, and equipment as specified, to provide an opinion on the condition, integrity, and durability of the hull and structure of the vessel and its equipment. If you require finance for the purchase, then you may also need to have a valuation of the boat completed as a part of the survey.
It is advisable to explore the costs and terms of any boat insurance before hiring a qualified marine surveyor, as the survey requirements of insurers can differ. If you find you need additional checks after you have already had a survey completed, this may involve more costs.
In many cases, the review of finances happens when you first look at purchasing a boat. It’s important to look carefully at the budget required and the amount you need, if any, to finance your purchase. There are many finance providers and it is worth getting quotes from a few different ones, as well as details of their services. As already mentioned, when transferring funds to a yacht broker or agent these should be paid to their client account, which offers a degree of protection should the company go bust before the deal has been completed.
You will need to check what type of insurance you need to purchase, as it will depend on how and where you use your boat. Using a boat offshore, for example, generally requires different – and more expensive -- insurance than if you use the boat exclusively on inland waters.
In terms of minimum coverage, it is recommended that theft, fire, malicious damage, loss or damage while in transit, and third-party liability insurance be included. Otherwise, the policy can very much be based around your own peace of mind, when away from the boat or out and about enjoying it.
USEFUL FURTHER READING
We've mentioned a variety of relevant pieces already, but if you are serious about buying your first boat, take some time to look at the resources on our US and UK sites. Useful examples include:
CHOOSING A SAFE BOAT
FIVE REASONS YOU SHOULD OWN A SAILBOAT
How to choose a yacht for ocean cruising
WATER SKI AND WAKEBOARD BOATS: DESIGNED FOR WATERSPORTS
How to inspect a second-hand boat before buying
BOAT BUYERS BEWARE: 10 HIDDEN PROBLEMS TO LOOK FOR IN USED BOATS
BOAT BUYING FOR ABSOLUTE BEGINNERS, PART I: TYPE
BOAT BUYING FOR ABSOLUTE BEGINNERS, PART 2: HULL
BOAT BUYING FOR ABSOLUTE BEGINNERS, PART 3: POWER
BOAT BUYING FOR ABSOLUTE BEGINNERS, PART 4: LAYOUT
BOAT BUYING FOR ABSOLUTE BEGINNERS, PART 5: ACCOMMODATIONS
BOAT BUYING FOR ABSOLUTE BEGINNERS, PART 6: STORAGE
Once you’ve done your research, the world of boating and yachting is ready to welcome you.