What is my purchase and maintenance budget?
The purchasing budgets
The purchase cost of a ship varies according to several criteria such as its power, its length, its type… However, it is preferable to choose according to the use you want to make of it. If, for example, you want to taste the joys of boating on an ad hoc basis, there is no point in buying a long sailboat. In the same vein, used boats are more suitable for people with a smaller budget.
For those who want to buy a new , motorized vessel with a length of less than 10 meters, they will need to plan between 20,000 and 30,000 euros. For their part, the sailboats over 10 meters long cost between 40,000 and 100,000 euros. However, it should be noted that these price ranges are provided for information only. No guarantee can be assumed as to these.
Before proceeding with the purchase, there are a few things that should be carefully considered. First, make sure that the boat really belongs to the seller and that the latter is in possession of all the necessary documents (the title deed for example). Then check that there are no charges and unpaid bills, the most common being the rental of the berth at the port, unreimbursed credit, and insurance.
Keep in mind that all vessels must be registered, i.e., they must have an identification number. Registration is compulsory (whether the boat is new or used). It can be done by the seller or the buyer.
Note that all pleasure craft are subject to VAT. So, remember to always have the proof of VAT payment in your possession during your trips at sea.
The maintenance budgets
In addition to the price of the boat, it is also necessary to budget for its maintenance and the costs related to improvements or repairs. Even if it is not possible to determine exactly the annual maintenance costs of a vessel, it should be noted that these vary according to the condition of the latter (new or used), its type , size, desired use…
So that you have a better idea of the budget to be expected, here are some examples of the maintenance that a boat may require:
– check the air conditioning or the dehumidifier;
– overhaul the engine, tune up and change the oil and filters;
– revise the safety equipment (life jackets, lifeboats…);
– overhaul the electronics;
– change the sail and mooring ropes, rigging, sails, anodes and batteries;
– maintain the interior of the vessel and clean the hull;
– subscribe to navigation applications.
Don’t forget to include insurance in your budget. Here you will have the choice between optional insurance or compulsory insurance. Depending on the company you choose, you will benefit from a greater or lesser number of covers.
Additional costs are also to be expected, for mooring, fuel, wintering, storage, etc. Said costs may vary depending on your place of residence.
The bank loan
– repayment is staggered and flexible: the bank calculates the monthly payments according to the borrower’s means. If the financial situation of the latter were to change, the bank could review its repayment conditions;
– some banks finance the entire price of the ship.
Although it looks interesting at first glance, the bank loan also has its drawbacks:
– the formalities can be restrictive. It is necessary to provide a large number of documents to put together your application file, including the tax notice, pay slips, etc. ;
– the processing time of the request can vary from one institution to another and can sometimes be long: the bank must indeed study the borrower’s file, in order to know whether he meets all the conditions or not;
the bank loan can have a high cost, it all depends on the interest rates applying to the monthly payment payments;
the banker can ask for a personal contribution or will certainly be brought to require collateral, such as a mortgage.
The RPO (rental with purchase option) specific to boating
Also called leasing, rental with an option to purchase specific to boating allows a boater to have a boat at his disposal, against the payment of rent each month. At the end of the rental contract, the yachtsman has the option of exercising the purchase option and thus permanently acquiring the vessel or returning it to the owner (this is most often a credit institution, an insurer or bank).
To buy a boat, many boaters prefer the RPO. This method of financing is also known to boost the market for new boats.
Leasing with an option to purchase generally has several conditions:
– When signing the contract, the bank and the boater determine the rental period. This generally extends from 2 to 10 years;
– It is up to the yachtsman to pay the maintenance costs of the boat, even if he is only a tenant;
– The length of the boat must be at least 6.50 meters;
– The boat must be able to move in international waters.
The main advantages of the boat RPO are:
– the RPO allows you to benefit from a VAT reduced to 50% (navigation in international waters is not subject to VAT, a fixed percentage of 50% applies to boats purchased in RPO);
– attractive interest rates: given that the bank recovers all of the VAT on the cost of purchasing the vessel in RPO (i.e. 20%), it is able to offer low interest rates;
– the RPO allows dealers to earn commissions;
– the RPO is rechargeable and transferable;
– the ship is not taken into account in the patrimony of the boater, and this throughout the duration of the contract.
But buying a ship in RPO also presents risks. If the boat becomes non-navigable due to a hidden defect or a technical problem, the boater will be responsible. He will therefore have to continue to pay the rent and the maintenance costs, even if the manufacturer refuses to assume the guarantee.
Since they only use the boat occasionally, some boaters are turning to timeshare (or co-ownership). This solution is interesting insofar as it makes it possible to share the initial price of the boat and the various annual costs associated with it (maintenance, insurance, mooring , fuel, etc.). It therefore presents itself as the best opportunity to become a shipowner, all without breaking the bank.
Just like the RPO, the boat timeshare also has conditions. These are mentioned in a contract and define the share and the obligations of each co-owner.
They include in particular the following elements:
– the navigation areas of the co-owners;
– the navigation periods of each co-owner;
– the choice of an insurance company and a company responsible for the maintenance of the boat;
– sharing of the various costs and charges related to the boat;
– the possibility or not of offering the vessel for hire;
– sharing of any rental income.
– For the realization of the contract, it is preferable to offer the services of a company specialized in the field.
Timeshare concerns both motor boats and sailboats, and presents itself as a new way of thinking about its relationship to the ship. Its main advantage is found in the pooling of costs. This means that the co-owners share the costs of insurance, wintering, repair, maintenance, space in the port, resale of the ship, rental management… Ideal therefore to save money. interesting.
Timeshare allows you to vary the navigation areas and avoid tedious round trips: if you are the sole owner of the ship, you will have to return to the port of departure after having made a trip at sea (because of this, you will most often sail on the same circuits). As part of a timeshare purchase, you will be able to chat with one of your associates and pick up the ship in the port where they left it after use. This will allow you to discover new spaces.
Although timeshare is an attractive financing solution, it also has its drawbacks. Disagreements are likely to arise between the co-owners, on the time of use of the vessel. Certain times of the year being more favorable to navigation than others, everyone would like to take advantage of it. Each owner has the possibility to exercise his right of withdrawal at any time and resell his shares to a third party, which can obviously penalize the others.
Lenco Marine Services
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