Five Costs You Should Consider Before You Buy a Car or Boat

These expenses are easy to overlook

Planning ahead for your next vehicle purchase can save you a lot of money and help you afford the car or boat you want. As you figure out how much to save, make sure you’ve considered all the costs, including:

1. Registration and insurance

You may be expecting these costs — but you still might be surprised at how large they can be. Consider calculating them ahead of time. Visit your state motor vehicles department website for help estimating registration fees, and shop around for insurance quotes. Many factors affect the cost of boat insurance, but on average, you can expect to pay 1.5 % of the assessed value of your vessel every year.¹

2. Document and destination fees

The document fee — sometimes called a processing fee or paperwork fee — is charged for the administrative work associated with your purchase. It’s often $100 or more, but you may be able to haggle it down.² The destination fee covers the cost of transporting a new car from the manufacturer to the dealer, and it’s usually between $400 and $800.³

3. Mooring fee or slip fee and/or trailer purchase

If you want to park your boat in the water, you can either moor it (anchor it away from shore) or rent a slip. Slip rentals can run a couple thousand dollars a year, depending on the location.⁴ A mooring might cost less — the amount and availability vary widely by location — but you’ll need a dinghy to get yourself out to it if the marina doesn’t offer a shuttle service. You might be able to keep the boat on a trailer, but you’ll have to put the boat in the water each time you use it — and many homeowners’ associations don’t allow trailered boats in driveways.

4. State boat tax

Boat taxes vary widely by state, from no tax at all to as much as 10 % of the assessed value of your boat every year.⁴

5. Major repairs

Before you buy a car or boat, ask yourself whether you can afford the repair if a major component fails. After working through all the other costs of car or boat ownership, it would be a pity not to be able to use it.