T&T: Annual Costs

[Parvey]

If we are using the original price of the boat, which means it is not
indexed for inflation. So each year your maintenance costs go up with the
rate of inflation (if not more). If I do my math right. If in the first year
of owning a $100,000 boat you spent $10,000 on O&M. Assume you did the same
thing each year and a 3 percent rate of inflation. In 10 years that same
$10,000 of O&M would cost you $13,439. So by virtue of inflation your ratio
of O&M cost to purchase would go from 10% to close to 14%. If you use the 5%
the ratio would be over 16%. Seems like based on what's been discussed so
far any increase in the ratio of O&M to Purchase cost may be largely due to
inflation. At least going by the numbers quoted from Pascoe's book.

Anyway, probably 'nuff said at this point.



Regards,

--Jim


-----Original Message-----
From: trawlers-and-trawlering-bounces@lists.samurai.com
[mailto:trawlers-and-trawlering-bounces@lists.samurai.com] On Behalf Of
David Smyth
Sent: Monday, August 28, 2006 11:56 AM
To: Trawler world
Subject: Re: T&T: Annual Costs

No!  The cost of maintenance is a function of the ORIGINAL cost, not
the second hand cost. As the boat ages, more stuff goes wrong. And
after the cheap stuff has gone wrong and been serviced or replaced
a few times, then the more expensive stuff starts to fail, like tanks,
cored laminations, and engines.

More expensive boats are more complicated, that's why they cost more
to own.

On Aug 26, 2006, at 7:23 AM, Parvey wrote:

> Just out of curiosity. Some people are saying that that maintenance
> cost as
> percentage of the purchase costs increases with time. Is this due
> to the
> fact that the purchase price of an older boat is lower than the
> cost of a
> new boat? If the annual maintenance costs are similar between older
> and new
> boats, then the percentage would increase. It seems like if we want to
> discuss the economics of boat ownership we should be looking at
> lifecycle
> costs. Purchase price - sale price + O&M costs for a specified
> period say 10
> years.
>
>
> Regards,
>
> --Jim
>
>
> -----Original Message-----
> From: trawlers-and-trawlering-bounces@lists.samurai.com
> [mailto:trawlers-and-trawlering-bounces@lists.samurai.com] On
> Behalf Of
> veiner@juno.com
> Sent: Saturday, August 26, 2006 3:28 AM
> To: trawlers-and-trawlering@lists.samurai.com
> Subject: Re: T&T: Annual Costs
>
> Annual Costs
> There have been volumes of information on this thread, recently. Some
> of it has been interesting; most of it has been subjective. There is
> relevance in whether you will spend from 8 to 18 percent of the
> cost of
> your purchase on maintaining and operating your vessel. The point
> being
> that the purchase of any boat is only the initial expense. The novice
> should be forewarned that there will be much additional cost in the
> future. The older the boat, the higher the cost and percentage.
>
> However, Id like to see more information on this topic expressed in
> numbers, objective numbers, if possible. We have had discussions like
> this in the past on subsets of cost, i.e., fuel, insurance, hardware,
> dockage, and so forth.
>
> Im in the process of getting quotes for annual haul out and painting
> for a 44 trawler. In some cases, the cost of this major boating
> expense category has jumped over 50 percent in one year!
>
> After 10 years of relatively stable prices for most goods and
> services,
> (based on the CPI), all of a sudden prices are skyrocketing. The
> reasons are many  pick your own. Fuel prices of $3 a gallon, copper
> over $3 a pound, marinas charging over $3 a foot. Heck, everything is
> $3 these days. That bottom paint that sounded high at $129 a gallon
> last year has a list price this year of $199 or even $229. The manager
> of one yard I spoke with yesterday claimed his material costs for
> hauling had risen 55 percent in 7 months. It seems that the rate of
> inflation for our particular hobby is heading for the statosphere.
>
> What is the experience of listees for hauling costs? Previously, about
> 2 years ago, several Florida yards were charging about $25 a foot for
> hauling, pressure cleaning, blocking, storage, paint and labor,
> supplies, and return to water. Today that figure seems to be closer to
> $42 a foot. Thats a pretty good example of inflation.
>
> More yards are pricing all services ala carte, with a separate charge
> for each service provided above. Your choices are also limited for
> charges for your own labor, for example, one yard wanted to charge $50
> for my labor to put on my own zincs. They were generous by saying they
> would only charge for my labor one time for the haul out, instead of
> charging each time per day. On top of this, if you want to bring in
> your own contractor or mechanic, there would be a 10 percent surcharge
> on their labor that must be paid to the yard. This fee makes sense for
> full service yards that have contractors on site who need to keep
> working, but it hardly is justified for yards that dont have the
> service you need.
>
> Like Phil and others, I keep pretty good records on the costs
> associated with operating my boat. I prepared a cruising budget 3
> years
> ago as a result of compiling information from TWL. It had a built-in
> inflation factor of 5 percent a year. Under present circumstances,
> that
> plan is toast.
>
> It would seem that we can compare haul out costs by the foot. What are
> others paying currently and where? Since haul out constitutes a big
> chunk of annual costs, and since a boat can travel to a more
> cost-effective site, we could use this information to save a BU or
> more.  Martin Veiner
>

David Smyth
david_smyth_ogst@mac.com

(805) 501-1406 cell
(818) 393-0275 office
(818) 353-0275 home office
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