What Are The Options for Luxury Yacht Ownership?

What could be better than sailing off into the sunset on your luxury yacht? For many, it would be a dream come true. However, there are many financial and practical considerations to contemplate before that dream can become a reality. As well as the upfront cost of purchasing your yacht, there are ongoing costs, such as crew, maintenance, mooring and insurance. Look carefully at the types of warranty available, as well as other leasing or ownership program options that may suit your needs better than an outright purchase.

UNDERSTANDING YACHT PRICING

Many elements affect the price of a luxury yacht. Size is the obvious starting point. The bigger the yacht, the more fuel, crew, maintenance and mooring space it will need. The type of vessel is important as well. Is it sail only, powered or both? The brand and model of the yacht will also affect pricing. The latest models from the most reputable brands will be significantly more expensive than older models of lesser-known brands. Additional and customised features on the yacht will also mean a higher price tag. State-of-the-art navigation systems or luxury furniture items will add to your initial outlay. Luxury yacht prices vary greatly, from tens of thousands to tens of millions, so fix a realistic budget before you purchase. Yachts depreciate according to age and condition, but there are mitigating factors. A well-maintained, desirable model will depreciate more slowly than a neglected yacht of a standard model. 

YACHT WARRANTIES EXPLAINED

Warranties are an essential part of yacht ownership. As well as providing peace of mind, they help to ensure that your vessel is well maintained and therefore depreciates as little as possible. Different levels of coverage are available. Some may only cover parts and repairs, while others may also cover more serious events, such as accidents or natural disasters. Most standard warranties will cover a new yacht for 12 months, but you may also purchase an extended warranty which covers certain aspects of the boat for a longer period. Warranties are transferable as they apply to the yacht, not the owner. However, as the boat ages, the amount of cover will reduce, or you will need to extend your warranty. Wear and tear, accidents, negligence, improper use and corrosion are usually not covered. Ensure that you fully understand the details of your cover before making a claim on your warranty. The yacht manufacturer or vendor should provide instructions for filing a claim. Supplying all relevant paperwork, receipts, documentation and serial numbers of damaged components will help expedite your claim.

YACHT OWNERSHIP ALTERNATIVES

There are three main options when it comes to yacht ownership. Purchase outright, leasing or a yacht management/ownership program. Whilst outright purchase leaves you fully exposed to all the costs associated with yacht ownership, leasing a yacht or taking part in an ownership program, gives all the benefits of yacht ownership without the full financial burden. When leasing, crew, maintenance and repair costs are often included and because the lease period is limited, so is the upfront expenditure. In a fractional ownership program, liability for costs is shared amongst all owners, although the time you can use the yacht may be more restricted. A yacht management program will enable you to offset costs as your yacht is available for others to charter, thus providing additional revenue and reducing your overall expense.

MAKING THE DECISION

The main consideration before making any decision is going to be your budget. Whichever lease/ownership model you opt for will have long-term financial implications, which may impinge upon your lifestyle if you make an inappropriate choice. Buying outright represents the largest up-front investment and leasing the smallest, with fractional/management ownership representing a balance between upfront/ongoing costs and return on investment. Before making your final decision, contact a reputable yacht broker and engage an experienced marine surveyor. Together, you will find the perfect solution to your yachting future. 

CONCLUSION

Yacht ownership has major financial implications that could negatively impact your lifestyle if not properly considered. There are both upfront and ongoing costs involved with each of the three ownership models outlined here. All potential luxury yacht owners should conduct thorough research and be realistic about their financial situation before making a final decision. Contact Simpson Marine at [email protected] for expert guidance to help you navigate the different options and get you sailing into the sunset on your dream luxury yacht.