Once you have found the boat of your dreams and have agreed to a price, you are now in the home stretch.  However, there are a number of important details you still need to navigate to ensure the process goes smoothly and to protect your interests. I’ve spoken to many boaters over the years who “soured” on their boat buying experience because of miscommunications or misunderstandings during the purchase stage.

The goal of this chapter is to help you to craft a Purchase Agreement that will secure the boat until certain conditions are met (e.g., complete repairs/prep work, secure financing and insurance, etc.) and you are ready to make the final payment and take the boat home.  It is important to note that in many cases, you will not take actual possession or “delivery” of your boat until sometime after signing a Purchase Agreement.  We will discuss taking possession/delivery of the boat in the next chapter.

Though I have purchased many boats over the years, I thought it would be helpful to get additional guidance from someone who buys and sells boats professionally.   Therefore, I reached out to Joe Lewis at Mount Dora Boating Center in Florida for his expert advice.

Mr. Lewis has been the General Manager at Mount Dora Boating Center since 1989 and has bought and sold hundreds of boats – both new and used – over that time span.  His dealership is industry certified by the Marine Retailers Association of America and has been consistently recognized by numerous manufacturers for excellence in customer service.

One of the things I really appreciate about Joe is his passion for introducing people to the joys of boating and delivering a positive on-water experience for his customers (whether it be through buying a boat, renting one, or joining a boat club).  In fact, this passion and customer orientation is a key reason why he was selected as the Chairman of the industry-wide Grow Boating initiative (aka, Discover Boating) for a period which is how we first met.  If you are shopping for a boat and happen to live in central Florida, you might want to check his dealership out.

Much of the content in this chapter, and the two that follow, stem from my discussion with Joe.

Before Signing on the Dotted Line

We will begin by reviewing some of the key questions or issues to ascertain before you commit to buying a particular boat.

Warranty

A warranty is intended to protect you financially in case something goes wrong.  If some warranty exists, it reduces your risk and adds value to the overall purchase.

Nearly all new boats and some used boats will come with at least some warranty protection.  If you are contemplating buying a used boat, find out if there is still warranty coverage available and whether it is transferable.  For example, many boat manufacturers offer a lifetime hull warranty.  The question is whether it applies to the original purchaser only or is transferable to subsequent buyers.  You should ask the seller and,  if the answer is yes, Joe highly recommends contacting the warranty/extended protection provider to confirm before finalizing the deal.  As Ronald Regan once put it, you should trust but verify.

If warranty coverage is available, you should also find out the following:

  • What is, and is not, covered?
  • How long is the coverage and what expenses are included? (parts only or parts and labor?)
  • How are claims handled and by whom? For example, boat and engine claims are often handled directly by the dealer but you might need to go directly to the manufacturer or an authorized service center for problems with electronic accessories.

Finally, if some or all of the purchase is still under a factory warranty, you might qualify to purchase “extended protection”.  This might make sense if the remaining warranty term is short and you are concerned about potential failures.  FPC Premium Marine Protection and Passport Premier (from Brunswick) are a couple of the major players in this area but there are many other options as well.  If you are contemplating buying an extended protection plan, Joe offers his “5 & 3 rule” to help you decide.  That is, if the cost is less than 5% of the purchase price and it provides protection for an additional 3 years or more, then it might be worth considering. However, be sure to check the fine print for the list of exclusions and research the company’s reputation thoroughly before purchasing an extended protection contract.

If the boat or motor is already out of warranty, then purchasing extended protection is probably not practical because of the additional cost involved to inspect the boat, etc.

Title Available?

The title designates the legal owner of the property.  If you are buying from a dealer, you shouldn’t have to worry about securing the title since they will handle the paperwork for you.  But if you are buying from a private party, it is your responsibility to make sure everything is in order before you agree to a purchase.

The first thing to check is whether a title is required in your state for the type and size of boat you are purchasing.  Also find out whether a separate title is needed for the outboard motor and trailer (if applicable) as well.

The fish and wildlife agency and/or the department of motor vehicles is the place to go to determine how to obtain a boat title in your state.  Be aware that if the boat is titled in a different state from that of your primary residence, you will need to research the requirements for that outside state as well to determine the appropriate transfer procedures.

If a title is required but the seller does not have one and cannot produce it, then you should pass on the boat.  The absence of a title will prevent you from taking legal ownership and being able to register the boat for use on public waters within your state.

Assuming a title is available, ask to see what name(s) or entities are listed.  To transfer the title to you, the person or persons listed will need to sign off on it in the exact way as listed on the title.  Things can get pretty messy if there was a divorce or death and not all parties are present to sign off on the title when it is time to close the deal.

Any Liens?

If the seller financed the boat and there is an outstanding balance, the lienholder (e.g., bank or credit union) will have to be satisfied first before the title can be transferred.  This will impact WHO you make the payment to and will be covered in the next chapter.  For now, just take note of whether or not there is a lien so that you are prepared for that later.

Take a Sea Trial?

A sea trial is just another name for a test drive such as when shopping for a car.  It is a great way to determine whether the layout and the performance/handling of the boat meets your expectations.  It also helps to identify any issues that might not have been apparent when inspecting the boat on dry land.

In an industry study I conducted in 2021, about half of boat buyers (whether new or used) took a sea trial before purchase.  But among those who did, nearly 90% found it to be very helpful.

How to do a sea trial was covered in an earlier chapter and nearly all boat buyers should do one.  According to Mr. Lewis, about the only time a sea trial is not necessary is if both of the following conditions exist:

  • You are very familiar with the boat. In other words, you already know how it performs and that it will meet your needs.
  • You are buying from a reputable dealer or an individual you know you can trust. That way, if something goes wrong, you are confident that they will do the right thing and take care of it.

Of course, there are situations where a sea trial is not practical at the time of purchase.  For example, if you are buying in the dead of winter and the waterways are iced over, you will not be able to do one.   In this case, you should stipulate in the Purchase Agreement (which will be discussed subsequently) that the deal is contingent on a satisfactory sea trial at a later date.

Please note that performing a sea trial is much more involving than doing a test drive with a car.  The boat might need to be trailered or hauled in/out and you and the seller might have to travel a considerable distance to get to the water.  Because of the time and expense involved, most dealers and private sellers are hesitant to give a sea trial to just anyone who asks.  Instead, they often require that you come to agreement on the price and commit to the purchase (pending a satisfactory sea trial) before a sea trial is granted.  Some might even require a (refundable) deposit beforehand.

As mentioned in Chapter 6 (how to do a Sea Trial), if you are unable to get a sea trial for whatever reason, Joe highly recommends having an impartial third party such as a dealer, mechanic or marine surveyor thoroughly inspect the boat before you agree to the purchase.  Buying a boat is often a major investment and so you should take precautions such as a sea trial or inspection to mitigate the risk.

The Purchase Agreement

If everything has checked out up to this point and you are ready to move forward with the purchase, the next step is to complete a purchase agreement before the transaction is finalized.  This is a contractual agreement to buy the boat at a specified price per the conditions specified.  Note that if you plan on finalizing the purchase and taking possession the same day, then you will need a Bill of Sale instead of a Purchase Agreement which will be discussed in the next chapter.

If you are buying the boat from a dealer, they will handle the Purchase Agreement for you.  However, if you are working with a private party, he/she might not be prepared with one.  Regardless of whether they have one or not, I highly recommend you come prepared with a Purchase Agreement template that you can fill out in case the seller does not provide one or the one offered is inadequate.

Regarding the agreement, Joe’s advice is to be very detailed.  At a minimum, the agreement should stipulate the following:

  • Date of the Agreement
  • Buyer and Seller names and contact information
  • Agreed to price and any deposit paid (if applicable)
  • The identification numbers for the boat, engine and trailer (if applicable). It is also a good idea to list the model or serial numbers for major electronic items too such as fish finders/chartplotters or a trolling motor.
  • Lienholder information (if applicable) such as the name and remaining balance. If there is a lien, specify who will be responsible for paying the lienholder (more on this later).
  • Any issues discovered during inspection or sea trial that needs to be addressed before the sale is consummated and who is going to pay for it (buyer or seller).
  • The close date to complete the purchase.
  • Whether the sale is contingent on various provisions such as 1) The Purchaser’s ability to obtain reasonable Financing and Insurance (recommended), 2) Completion of a satisfactory Sea Trial or Marine Survey or 3) Completion of any repairs as specified.
  • Whether the deposit is refundable if any or all of the above provisions are not met.

Please note that if there is a lien on the boat, motor or trailer, Joe highly advises that you do not agree to pay the boat owner for the full amount.  Instead, you should stipulate that you will pay the lienholder directly for the remaining (loan) balance and pay the seller whatever is left over.  For example, let’s assume you agreed to purchase a boat for $10,000 and there is an $8,000 balance remaining on the loan.  In your purchase agreement, you should specify that you will pay $8,000 to the lienholder and $2,000 to the seller.

However, if the seller is “upside down” meaning that the remaining loan balance exceeds the agreed-to price, then you should stipulate that both you and the seller are to make payments to the lienholder.  Using the above example, if the remaining balance on the loan was $11,000 (instead of $8,000), then you would be responsible for paying $10,000 to the lienholder (the agreed-to price) and the seller would need to pay the remaining $1,000 balance to satisfy the loan.

BoatUS has a generic Purchase Agreement that you can use or you can search online to see if there is a template available for your state.

Put Down a Deposit

With a detailed purchase agreement in order, the final step is to put down a deposit to secure the purchase.  A typical deposit is 10%.  The question is what method of payment is acceptable to the seller. This is something you will want to ask ahead of time if possible.

A wire transfer is generally the safest option for both the buyer and the seller.  Please note, however, that you will not be able to complete a transfer after bank hours so keep this in mind when planning your trip to see the boat.

While many sellers will likely accept cash, this might not be your best option because there is no paper trail in case something goes wrong.

A Cashier’s Check is better than a personal check but is not foolproof either.  Because they can be counterfeited, the seller might want to verify its authenticity with the issuing bank during business hours and might even need to visit a branch office.  Plus, the buyer would need to know the exact amount of the Cashier’s Check beforehand which is not always the case.

Though sellers will naturally be reluctant to accept a personal check, this could still be a viable option if there is a considerable lag between the Purchase Agreement and when you intend to take possession to allow sufficient time for the check to clear.

Dealers will often accept a credit card for a down payment but not the remaining balance because of the fees involved.  Of course, this is not an option if buying a boat from a private party.

The bottom line is that a wire transfer (or credit card if buying from a dealer) is likely your best and safest down payment method but you should confirm what is acceptable to the seller or dealer ahead of time.

Summary

Before you make a final purchase decision, be sure to get answers to the following:

  • Does it come with a warranty?
  • Is the title available?
  • Are there any liens on the title?
  • Did you get the opportunity to do a sea trial?
  • What payment methods are acceptable (deposit and final payment, if applicable)?

Then, once you are ready to move forward with the purchase and are planning on taking possession at a later date, the next steps are to…

  • Complete a detailed Purchase Agreement
  • Denote any issues with the boat that need to be addressed prior to taking possession (and who will pay for the repairs)
  • Specify that the boat buyer will pay the lienholder (not the seller) directly for all or a portion of the outstanding balance (if applicable)
  • Indicate whether or not the deposit is refundable
  • Make a deposit (typically ~ 10% of the purchase price)

Note that if you intend to purchase the boat and take it home the same day, you will need to replace the Purchase Agreement with a Bill of Sale which will be discussed in the next chapter.

Jerry Mona - BoaterInput

About the author

Jerry Mona is an avid boater and angler and long-time boating industry insider. With over three decades of experience, he is often considered to be the leading research expert with boaters and has helped numerous manufacturers and trade associations to understand the needs, wants, attitudes and behaviors of boaters. He now shares many of his insights about boats and boaters for free on his BoaterInput.com website.

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