How much does it cost to own a yacht a year?

So you want to own a yacht – but first, you’d like to pin down the real annual cost of yacht ownership. As you can imagine it’s about much more than simply shelling out a cool few million for the boat itself. Some call luxury yacht ownership a money pit – are they right? In this article, we’ll explore the financial side of owning your own yacht. 

How much time will you spend on board?

Spending weeks at a time on board your own yacht means you get the most out of the experience, with frequent use making it easier to justify the expense. But if you only manage to spend a couple of weeks a year sailing, you could easily end up forking out a fortune for a very short time on board. Plenty of new yacht owners are over-optimistic about the time they’ll spend on their boat, soon discovering it isn’t quite as easy as they imagined to spare the time. How do you think you’ll fare? 

Size matters

As a rule, the bigger the yacht the greater the ongoing costs will be. The larger the boat the more the mooring costs, simply because the boat is physically bigger. The same goes for boatyard lift-outs and boat storage. Some marinas charge based on the area of the boat, in other words, the length and beam. Then there’s the fuel and deck hardware, which also vary depending on the craft’s overall length or displacement, again making bigger boats a lot more expensive to run than smaller ones. 

You buy a yacht – and it depreciates instantly 

The second you drive a brand-new car off the forecourt, it depreciates. The same goes for yachts. Unlike cars, yacht depreciation isn’t that easy to pin down. But you can reasonably expect a brand-new boat to drop as much as 50% of its value during the first decade of ownership, losing more in the first few years and then slowing down. Once it’s more than a decade old, the depreciation slows eight down, typically 5% a year from then onwards. 

Buy an older boat, say 25 years old, and the hull and structure won’t depreciate much at all. But old systems, technologies and entertainment equipment will need to be replaced to keep the experience luxurious and safe. Bear in mind new equipment depreciates as well, which means it’s highly unlikely you’ll recover the money when you sell. It’s also worth knowing that as a rule, the older the yacht is the more it costs to run. 

Ongoing extra costs that stack up

What might you need to factor into your sums? You’ll probably want to replace the batteries every five years and the electronics every decade, then there’s the cleaning, the interiors, the generators, and ultimately the engines. If you buy a used yacht these bills could arrive sooner rather than later. The upgrades might not just be costly, they can also be time-consuming and inconvenient. 

Are you a tech freak? Factor it in!  

It’s no surprise that so many yacht owners are also tech heads. The amount you can spend on fancy equipment for fun, entertainment, navigation and safety can be infinite, and if you’re mad-keen on innovative tech you’ll want to factor your techie habit in. 

Think boat maintenance and boatyard expenses 

Boat maintenance is less predictable. But you’ll need to cost out at least one haul-out a year along with regular antifouling, engine services and bits and bobs that need replacing. Older boats tend to need more maintenance and more spares, and it can stack up to thousands on a large and complex craft. 

Outdoor fabrics like those used in Bimini tops and seat cushions have a limited lifespan of around 5-7 years. Mooring lines and cables should be regularly replaced. You’ll need expensive speciality cleaners, teak oils, waxes, and polishes too. And if you’re not doing the cleaning yourself, you’ll need to hire someone to do it for you. Sensible yacht owners set aside an eye-watering 10% of the boat’s value per year for maintenance. 

Then there’s winterising. Will you dry dock the craft over winter, paying out for expensive things like handling, transport and storage? Or can you simply leave it in the water all year round? If so you’ll need to shell out for a harbour ring concession, anything from a few hundred to thousands a month. 

Mooring is probably your biggest ongoing cost

The cost of mooring the boat depends on the mooring style you choose. If you want to leave the craft at a prime walk-ashore marina with excellent facilities, it’ll cost more than a simple berth that you row out to using your tender. 

Say you’d like to berth your 12m boat on the south coast of England. It could easily cost you £10,000 a year for a place in a smart Solent marina, but it can come down £2500 for a simpler, less convenient mid-river berth.  Away from the bustling south east marina places cost less, with a swinging mooring coming in at as little as £1000 a year. 

Annual yacht insurance

Pottering around enjoying yourself just off the coast isn’t a big risk to insurers, which is why marine insurance is reasonably affordable unless you actually go out racing or decide to tackle a solo long-distance voyage. You can expect to pay between 0.8% and 1.2% of the yacht’s total value as your annual premium. If your boat’s worth a million it’ll probably cost anything from £8,000 to £12,000 a year to insure. Remember you can sometimes get worthwhile yacht insurance discounts for good security, safety kit, and fire equipment.  

Fuelling your craft 

You should be able to find an accurate prediction of how much fuel you’ll use online,  just look up the typical fuel consumption figures for the model you’ve chosen. Plenty of websites provide a yacht fuel cost calculator, easy and fast to use. Find the boat’s most efficient cruise speed and you’ll save cash on fuel as well as minimising your CO2 emissions. 

Crewing your boat

Some yacht owners love nothing more than captaining the craft themselves. Others prefer to lounge while an expert crew does all the hard work. A crew can be expensive, especially if you need an actual captain.  

Expecting the unexpected  

Life at sea is rarely totally predictable, so you’ll want to bear in mind the random costs you might face. You might want to lay aside at least 20% of the total annual cost you’ve calculated to account for unexpected repairs, replacements and more. 

Have you thought about yacht share instead of outright ownership? 

Even when you can easily afford to buy a yacht of your own, you’re far too savvy to feel OK wasting money. Yacht share removes a lot of these costs, leaving you free to enjoy the luxury yachting life for a lot less.