Boat Depreciation Is Worse Than Cars, Here's How Much You Lose In 5 Years

It might be no surprise that buying a boat is a big investment, with even pre-owned vessels often costing far more than many brand-new cars. But what may come as an actual shock is how relatively short that value lasts in spite of the hefty price tag. While Kelley Blue Book reports that cars lose about 16% of their value within the first year on average — and roughly 55% after five years — boats can depreciate even faster. Exact figures vary depending on where you look, but Power Products Systems states that boats tend to depreciate 20% to 30% within the first year alone, then another 5% to 10% annually in the following years. This means that, in just five years, your boat could lose upwards of 70% of its value.

Now, this may not be an issue for those looking to make a huge luxury nautical purchase, as the average net worth of private yacht owners is in the hundreds of millions. For the average boater, though, resale value could be a major consideration. Additionally, the boat itself isn't the only thing that will depreciate: Much of the actual equipment and accessories required for boating will also wear out and lose their value over time. Even life jackets — which you're required to carry on your boat by federal law — eventually deteriorate and must be replaced. Between these potential losses and additional expenses like moorage fees and general maintenance, it's no wonder some consider boats to be such a waste of money.

A big reason boats depreciate quickly is because they are considered luxury items. However, how much value a given boat loses depends on a number of factors, starting with the model year. Just as cars start depreciating right after you buy them, brand-new boats plummet in value within the first year or two, which is why some consider it financially smarter to purchase a boat that's already a few years old. The type of boat you own also plays a role: According to Boat Value, bowrider models tend to depreciate the fastest, while sailboats maintain the most value throughout their first 10 years. Similarly, boats with diesel engines may depreciate more slowly than boats that run on gas.

Environment is another important factor in a boat's depreciation: Saltwater is corrosive to boats, and typically causes them to lose value faster than freshwater vessels. Even ocean air can cause metal to corrode 10 times faster than normal humidity.

Your usage levels also matter, as similarly to cars with high mileage, boats with a higher number of engine hours can lose their value at a faster pace than lesser-used models. However, owners can preserve value even on boats that have seen heavy use with the proper care. Boats with gasoline engines may need maintenance after around 1,500 hours, while diesel engines can go upwards of 5,000 without a serious repair. Boat Trader recommends keeping records of all the work you have done on your boat, as proof of proper maintenance could boost your vessel's value up to 20% above the listed average value when it's time to sell.