Did you know that over 50% of boats are sold pre-owned? Whether you want to buy your first boat or upgrade, there are many benefits to purchasing a pre-owned boat. They can be cheaper and have less wear and tear on them.
But how do you know you're investing in a boat that's worth the money and falling into a financial scam? With so many dealers offering used boats, choosing the ideal one might seem difficult.
In this article, we'll guide you on how to purchase the best pre-owned boat without going into a financial loss.
There are many boats available on the market. Thus, take some time to determine what kind of vessel will best meet your needs.
Do you need a cabin cruiser for extended trips or a smaller fishing boat for weekends out on the lake? Also, think about how much space you'll need and what kind of activities you'll use the boat for.
When looking for a used boat, it's crucial to find a reputable dealer who will guide you through the buying process and help ensure that you're getting a quality vessel. Ask around for recommendations from friends or family members, or do an online search to find a quality dealer near you.
If possible, take time to meet with the current boat owner and tour the vessel. This is your opportunity to check out the vessel's condition, especially if it has been used for commercial purposes like fishing or scuba diving.
During this meeting, ask about how well-maintained and seaworthy it is. Also, inquire about its history, including any accidents or mishaps that may have occurred.
For example, if there are orange stains on the hull, rust is starting to develop. It's a sign that you need to factor repair costs into your budget.
If you're seriously considering buying a used boat, it's always a good idea to have it inspected by a marine surveyor. This professional will look for hidden damage or problems with the vessel. Most of these problems are not visible to the naked eye.
Considering that a few will try to "pull the wool over your eyes," this inspection is inevitable. The professionals will provide you with an estimate of what it will cost to repair them.
When purchasing a pre-owned boat, check the title and registration to ensure they are both in order. If there are any liens against the vessel, it could affect your ownership rights down the road.
If a broker is selling the boat you're interested in, always get a copy of their written brokerage agreement. It should include things like the commission percentage, when it's due, and who's responsible for paying the advertising fees, and so forth.
Although anything may seem like a good buy when you're emotionally attached to it, don't let the salesperson talk you into buying a boat that you'll later regret.
It's important to stay objective and take the time to inspect any used vessel before agreeing to buy it properly. Remember, you are making a significant investment and should not rush into anything.
Even if a used boat looks like it's in excellent condition, there's always the potential for hidden repair costs. Be sure to factor these into your budget. Also, include the cost of any upgrades you may want to make to the boat once you own it.
If you cannot pay for a used boat in cash, get a loan pre-approval from your bank before you start shopping around. This will ensure that you're able to buy the vessel when you find the right one. It's also common for most boat dealerships to offer financing options for interested buyers.
Carefully review any loan agreements before signing them. Be cautious about high-interest rates, penalties for early repayment, and other unfavorable terms.
Make sure nothing is missing or ambiguous before signing anything. You should also know what interest rates are being charged when payments are due. In addition, check out how much prepayment penalty might cost you if you want to refinance or sell before the initial agreement ends.
Insuring a boat can be expensive, so be sure to factor this into your budget. You may also want to consider purchasing a boat insurance policy that'll cover you in the event of an accident. Several insurance firms have different boat insurance plans that can be customized to accommodate your finances.
Boat ownership laws vary from state to state. It's essential to educate yourself about the specific rules that apply to you.
Before buying any boat, make sure that it is legal to own and operate in your home state. For example, some boats are only allowed in certain inland waters of a particular state or states. You might not realize if you're purchasing out-of-state.
Check whether there's an excise tax on the sale of any boat priced over $3,000. Also, check whether your home state has its separate registration fees for off-shore vessels. These fees can cost up to several hundred dollars per year, depending on where the boat will be anchored.
If you're buying a pre-owned boat that has been registered with the U.S. Coast Guard, you'll want to find out if it's been placed in the Coast Guard's tracking system. If so, this will be an excellent way to ensure that all future owners are aware of its location.
This way, they can't make false insurance claims in case of an accident or damage.
If you're considering buying a used boat, be cautious about purchasing anything made by hand, especially one constructed on your property. This type of vessel is far more likely to sink or malfunction than something that was professionally built.
Before committing to buying a used boat, be sure to find out what kind of warranty is available on the vessel.
While some warranties are limited to 30 days, others apply for as long as you own the boat or even longer.
Don't accept verbal promises even if the seller's lawyer makes them. Most claims for breach of warranty or misrepresentation can be fought successfully if there is written evidence.
If you don't get it in writing before buying, insist on a contract or Bill of Sale containing promises and guarantees. They should come along with detailed information about any boat problems within 30 days after purchase.
Make sure the document includes the names, addresses, and phone numbers of everyone involved. This includes complete titles and records, warranties (both express and implied), insurance coverage descriptions, plus dates of expiration.
Also, have a set of rules to follow should arbitration become necessary, what happens in case of future disputes, and notice to whom should any legal proceedings be addressed.
Oil leaks are a significant problem with older vessels, and a tiny amount of oil can damage the water. Make sure you check for any signs of leakage, general corrosion or pitting.
Get down on your hands and knees and check around all boat areas where water might enter. If everything looks okay "up high," don't forget to check below the decks. Also, ask the seller about any repairs or replacements done recently, even if they seem minor.
If your used boat is an internal combustion vessel, it's also essential to check for signs of waterlogging around the engine block and fuel tank. A buildup of rust here could mean that there are problems with holes or cracks in these components.
Inspect the engine compartment for oil or water leaks, rusty areas, and loose wires. Look for any belts which may be worn out and in need of replacement. Also, look out for signs of overheating or other problems that could indicate internal engine damage.
Have you checked how many hours are on the odometer? Depending upon how it is used, an average "workhorse" such as a Boston Whaler might require overhauling every 150 to 200 hours, while a "weekend warrior" like a Formula 31 might only call for its first one at 1,000 hours or more.
You'll want to find out from the seller exactly how many hours are on the engine to get an idea about its overall mechanical condition. If applicable, ask how much time has elapsed since significant repairs were made.
Electric issues are common among older vessels. Look for signs of frayed wires, corroded connections, or other irregularities that could show problems with the vessel's electrical system.
If the boat is equipped with electrical systems including navigation lights, bilge pump, auto-pilot, GPS plotter, and depth sounder, ensure it works properly. It shouldn't have a shot or produce erroneous readings.
It's also imperative to check all running gear, including the shafts, propellers, rudder, and steering systems. Buying a boat is a significant investment that needs serious scrutiny during the purchase process. Otherwise, you'll lose thousands of dollars on a vessel that won't offer any service.
You may also want to consider having your boating friend help you by performing an electrical inspection. This way, you'll be sure there are no issues before buying the boat.
Once you've completed your general inspection for any significant issues, take your used boat out onto open water. Bring along a notebook and pen to make notes about anything that still needs attention. Also, include details on how easily it speeds up, slows down, turns around at high speed, and otherwise handles in a wide range of conditions.
Warped or cracked components will need replacement as soon as possible. Remember, they may be unreliable and possibly dangerous while on use in the open water. Check everything from transom brackets and outboard motor mounts to the hull and deck joints for any irregularities that could indicate a problem.
If the boat you're interested in comes with a trailer, scrutinize it for rust, damage, and missing or broken components. The trailer should also have working lights, reflectors, and brakes to avoid accidents while transporting your new vessel.
If you're buying a used sailboat, ask the owner whether they've ever had it out in heavy weather. If so, find out how well it performed and if any damage was incurred. You should also check the boat's sails, rigging, and other sailing hardware to make sure they're in good condition and have been recently serviced.
While not as important as some of the other items on this list, it's still worth looking at the upholstery and accessories. If not in good condition, ask if you can negotiate a discount for purchasing them along with the boat.
Once you've agreed with the seller, it's time to transfer ownership of the boat. The process usually starts with signing a bill of sale and ends with registering the vessel with your state's Department of Motor Vehicles (DMV).
The exact steps involved in this process will vary depending on your state, but you'll need to provide:
In most cases, you'll also have to pay sales tax, registration transfer fee, documentation processing fees, and any other applicable fees. Be sure to ask your DMV representative about these charges beforehand to avoid any surprises.
Are you on the lookout for a pre-owned boat or have one, but don't know where to learn important boating tips? Worry no more. At Freedom Boat Club, we work with different boat enthusiasts across the country.
We'll not only guide your efforts in purchasing a boat, but keep you in the loop on boating matters. To learn more about buying used boats, register for our boating lessons or become a member at an affordable fee.