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Why Are New Boats So Expensive?

By Tyler Kraft | Apr 06, 2018 | Boat Buying

Every year, customers walk into our showrooms and boat shows and ask the age-old question, “Why are these boats so expensive?” The simple answer to this question is that there are many reasons boats cost as much as they do. The tangible things like materials used, labor costs, research and development, meeting EPA regulations, developing and maintaining solid dealer networks, and shipping costs all add to the price tag of a boat. However, what the question usually boils down to for a customer is “What am I paying for at that price?” or “What am I getting for that amount of money?”


The answers to those questions can be broken down into several specific reasons.


Manufacturing Costs

Let’s start with one of the biggest pieces: Manufacturing and Labor costs. Did you know that the vast majority of boats are still built almost entirely by hand? The entire boat building process is simply something that can’t be easily automated. While progress has been made in automating certain processes, boats are big, bulky and generally produced in quantities too low to justify the expense of automation. Think about the size of a boat. It’s not something that can be easily flipped around or moved from one place to another. A boat is also not easily shipped so hulls can’t be affordably produced in another country and shipped to the US. It must be carefully maneuvered from one station to the next in a huge facility that has to be temperature controlled, properly ventilated, and OSHA certified.


Look at the build process of a typical fiberglass boat, whether it be a runabout, deck boat, fishing boat or ski/wake boat. Manufacturers typically have only 1-2 molds available for production. The gel coat, fiberglass, resin and any other strengtheners are applied to the mold in a series of steps that takes on average 24 hours for the chemical reactions to set and an additional 1-3 days for the hull to fully cure. Additionally, premium manufacturers will add foam for flotation or sound deadening through various patented processes. Costs can be significantly impacted at this level by the materials used, whether it be biaxial or triaxial cloth, wooden or fiberglass stringers, stainless steel vs traditional screws, or additional layers of fiberglass and gel. Add to the material costs the expense of cutting holes (either by hand or robotically), sanding, finishing and assembling the top and bottom molds. With boats, there’s no large-scale presses to stamp the piece out or robots that can precision weld the pieces together. It’s an incredibly labor and material intensive job just to build a hull.


Add to this complex build process all the components necessary to operate a boat safely while still having the performance and comforts that modern boat buyers expect. These include pumps, hoses, wires, horns, switches, gauges, lighting fixtures, premium upholstery, stereos, canvas and the list goes on. All these pieces need to be engineered, assembled and installed to work in an environment that constantly gets wet, is subject to heavy battering by waves and baking in the sun. Even the most basic of boats requires a multitude of materials, labor and ingenuity to deliver a product that is safe and functional.



Now let’s talk about technology. Up until the computer age, a company drew and designed a hull, built it, dropped it in the water, and tested it. If it performed well, they could tweak it by adding, removing and reshaping the hull. They would continue this process until it met their specifications. If it didn’t perform well, they started over from scratch. In the 21st century, new hull designs are developed using sophisticated 3d modeling software and computers that can simulate the stresses and flow of water on a hull. Because of this technology, boats today get on plane quicker, are more stable, get less splash over the bow and can be more purpose focused than ever before.  If you’ve ever seen a wakeboard boat, think of the technology involved to create a wave behind the boat that has enough size and force to push a surfer. Think about an offshore fishing boat that can slice through 4-5 foot waves without throwing the passengers and equipment across the deck and keeping the interior of the boat dry. And that’s just the technology to build the hulls! Now let’s add features like computerized ballast systems or gyroscopes that never existed before. Boats today can have all the technology of your living room plus be able to map the lake bottom, show the tide patterns or allow you to navigate new waterways via satellite. This is technology that is developed for a small percentage of the population and therefore carries a premium price tag.


Power (HP)

Without a doubt, one of the most direct costs to a boat is the engine. Whether you’re looking at a small pontoon, a performance wake boat or an offshore fishing vessel, the amount of Horse Power (HP) you desire will affect the overall cost of the boat. Today’s motors run quieter, have more torque and are more fuel efficient than ever before. EPA standards, environmentalists and consumers have also demanded that new motors be “greener” and produce less emissions than ever before. All these factors increase the value of the engine powering a new boat but also add a measurable cost to the price of any new boat.  Relatively speaking, the motor of any boat will account for approximately 1/3 of the entire boat price and as consumers demand more horsepower while still maintaining their clean waterways, the base price of boats will continue to increase.


The X-Factor

So finally, we’re at what we internally call the X-factor. Economists would consider this the laws of supply and demand. While new manufacturers enter the industry each year, there’s still a limited number of suppliers and top tier builders that can’t meet the demand of boating customers. But, that’s only part of it. The missing piece on why boats have increased in price the way they have is this: It’s Because They Can. Take a second and ask yourself “What’s the value of spending time with my family?” What would you pay to see your daughter’s confidence grow when she first pulls herself out of the water on 2 skis? Going out to dinner at a restaurant that overlooks the water may cost you the same as a monthly payment on a boat that provides the same, if not better view of the water. And with a boat, you can have this view any night of the week. Boating is inherently social and in today’s fast-paced, high tech world consumed by social media, boating is an escape that brings families together, builds meaningful relationships between friends and creates a sense of time away and adventure daily. Comparatively speaking, ask yourself what it would cost to go a vacation every weekend that the weather allows you to be outside. That’s what boating is. It creates value that isn’t easily recognized as a dollar figure. Every day on a boat is a new adventure. Every trip out is a chance to be in nature and discover something new. What’s the price of that? What kind of value does that bring to your life? Because price is what you’re paying, but value and time well spent is what you’re receiving.

Published by Trent TerHaar • National Marketing Director

April 6, 2018

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