In considering a boat, if you have to ask the price, you can't LTC afford it. That advice, said to have been offered originally by J.P. Morgan -- is outdated.
Without a doubt, the second thing a shopping skipper will look at when evaluating a powerboat at the United States Powerboat Show, which opens tomorrow, will be the price sticker. First glance will be at the lines of the craft, its size, and whether it is compatible with the observer's preferred water sport.
Maybe when purchasing a tape player, dishwasher or even an automobile, one gets swept away by enthusiasm and takes the plunge, but a medium to large new boat can be the second-biggest investment one makes in a lifetime. Some boating buffs have even been known to pay more for a boat than they do their home.
And technically, a boat owner still might profit from a tax break by buying a boat that meets IRS specification as a second home, but take that path with caution. Tax agents can be tough, and might have questions that go beyond whether the new craft has a head, galley and sleeping accommodations -- especially if second home tax breaks are also enjoyed for a motor home, resort condominium -- or both.
The administration in Washington, Congress and the IRS remains convinced that boaters are fat cats who can afford more; hence they keep heaping more expenses on those who own boats. And the bigger the boat, the more they think the owner can afford. It's commonly called nickeling and diming one to death, but with boats the nickels and dimes are dollars -- and they add up.
So these days there's more to owning a boat than paying up, then cruising off into the sunset. And all of the new rules add inconveniences and costs, some hidden and some very obvious.
The biggest complaint from affluent boatmen is the new 10 percent luxury tax assessed on boats costing $100,000 or more. Some think that extra cost doesn't play a part in a decision to buy, but apparently it does.
A boating industry already in the doldrums found the new luxury tax prompted noticeable curtailments among buyers. The sale of boats covered by the tax dropped dramatically -- and in some instances, already hard-pressed dealers fighting for survival swallowed the tax to make a sale. Also, a sidelight of the current poor boating business in all price categories is its effects on quality production in the future.
As builders cut back their work forces, some skilled employees leave the industry for other jobs. Their return when things get better is questionable.
Time was when a $100,000 boat was a legitimate status symbol, but that's no longer necessarily true. Boat prices, like all others, have risen considerably in recent years, and that ceiling is no longer the exception for family or fishing cruisers with a few amenities included in the package.
The latest blockbuster to hit boatmen is the new Coast Guard user fee, which curiously goes into general funds -- though Congress points out that that's where Coast Guard funding comes from. And for some boatmen, this is no low-ticket item, especially this year.
The stickers that were required to escape ticketing, with fines that can go as high as $5,000, went into effect in late summer -- but they are only valid for a calendar year. Thus anyone who buys one now must get a new sticker Jan. 1.
Again, the skipper with the biggest boat is hit the hardest -- to the tune of $100 for a boat of 40 feet or more. It's $50 for craft of 27 to under 40 feet; $35 for boats of 20 to under 27 feet, and $25 for boats of 16 feet to less than 20. Those with boats under 16 feet escape this tax.
Following outcries from boat owners, Congress talked of repealing the bill it passed -- don't blame the Coast Guard -- but there is no action yet, and alternate funding is proving difficult to find in these tight budgetary times. Those who buy boats are subject to the same 5 percent Maryland titling/sales tax levy as are auto owners. Then there is the annual $12 state boat registration fee. For fishing, add another $25 license that covers all aboard; if the boat is to be used for chartering fishing parties, there's another $200 to $240 charge.
Dockage can run from several hundred to several thousand dollars a year; pretty much gone are the next-to-nothing home ports of the old Mom and Pop slip operations. Waterfront property has become too valuable. Dry dock in winter can mean a couple dollars per foot length of boat per month; a trailer and tags are needed for boats being towed, not to mention their registration and titling fees.
Boat fuel runs about 20 cents more than that for the family car; the Coast Guard offers no more free tows except in emergencies, the same for Maryland DNR Police. There are horror stories aplenty about commercial towing operations; costs ranging from $100 to $500 or more.
Boat insurance has increased appreciably, but thankfully, interest rates for boat loans remain comparable to those for homes -- about 9 1/2 to 10 percent, but now a new boat buyer is frequently required to have more equity in his boat, which means more of a down payment. "No more 105 percent financing," said one boat dealer.
Also, young newcomers to the boating field are required to pass a boating course, and fines are stiff -- comparable to that on the highway -- for drinking too much. Designated drivers are becoming common on the water. But, it's worth it -- that feeling of freedom and getting away from it all out there on the water. Shop carefully; it's a buyer's market, but consider all the not-so-evident costs when matching a boat to the family budget.