The price of the boat which the customer sees on the yard's website is often much lower than the amount that will be stated in the sales contract. ItBoat has found out why this is the case and what the final cost of the boat is based on.
The base price is the price of a boat in standard configuration, the minimum amount the customer has to pay to the manufacturer in order to get the boat. Generally speaking, the set of options included in the price is enough to start using the boat immediately after purchase without any additional payments. The customer gets a finished boat, fully equipped, with sofas, tables, sanitaryware and galley equipment.
The outboard models have their own differences in terms of basic equipment as compared to stationary engine models, the differences between the two will be covered in more detail below.
For yachts with stationary engines, this usually includes the cost of the engine and its installation. As standard, the cheapest and most often the lowest-powered of those options that are available for a particular model is chosen.
Let's look at a couple of examples. Here is the 13.3m Swedish Nimbus 405 Coupe.
With the basic configuration with two Volvo Penta D4 320 hp shafts, this boat costs more than SEK 4.7 million (€449.6 thousand).
There is also a choice of Volvo Penta D6 engine with 380 hp. In this case the price rises by almost 166 thousand crowns (more than €16 thousand).
These figures also include navigation equipment, full deck teak, hot and cold water shower on transom, mahogany planking and dining set for 6 persons, as well as bow thruster and electric head.
And here's the compact 9.9m Greenline 33 from Slovenia.
With a 170 hp Volvo Penta D3 diesel engine, this yacht costs just over €186,000 as standard. The standard equipment includes not only bow thruster, seats upholstery in artificial leather, teak interior and galley equipment with microwave and induction stove, but also solar panels and charging system from them.
A 50-horsepower addition to the engine costs an extra €3,000. Installing an electric motor, on the other hand, will increase the budget by €45,500.
Sometimes it happens, that not the most powerful engine is specified as a standard one. This happens when the shipyard offers a choice of both petrol and diesel engines. In that case, because of higher prime cost, the less powerful diesel engine can turn out to be more expensive than its more powerful petrol equivalent.
For example, a 10m Fairline F//Line 33, complete with a standard 480bhp Volvo Penta V6 petrol, will cost £269k, while a less powerful Volvo Penta D3 diesel will cost £10k more.
Despite the fact that «horses» the D3 has less than the V6, this motor costs more precisely because it runs on diesel. Fuel consumption is so much more economical and the boat's range is increased by 40 nautical miles.
The base price of outboard yachts does not usually include the cost of outboard engines. This approach is convenient for clients who plan to purchase and install an outboard engine themselves after delivery of the boat. In some cases it is cheaper.
Beneteau's price lists can serve as an example of such pricing. Looking at the yard's website, the standard equipment of, say, the 5.6-metre Antares 6 OB, priced at €20,370, it can be seen that the section «Engines» is fully listed as an option. According to Ultraboats, the Russian distributor of Beneteau, to install the engines you need to budget another 3-4 million rubles.
However, there are some exceptions. Thus, the Swedish Nimbus includes a set of outboard motors Mercury Verado as standard equipment of Tender and Weekender models. But if desired, such boat can be ordered without a motor.
Basic cost of sailing boats includes small engine, spars, rigging, deck equipment besides delivered hull. Even a minimal set of sails (at least a mainsail and a jib) are not included as standard equipment.
Sanders Sails' standard sailing harness for this yacht includes a mainsail and furling jib, a genoa, but not a spinnaker or gennaker. The extra equipment needed to rig a gennaker or spinnaker will cost nearly £4k. Buying these sails themselves as part of the boat will cost another £0.7-2.7k.
Ex VAT and Ex Works
Regardless of the type of boat and its equipment, associated taxes and shipping costs are never included in the base price.
This can be reminded by the marking Ex VAT, that is «excluding VAT», next to the starting price.
The Ex Works marking or simply EXW literally means «self-delivery». The shipyard in this case is not even responsible for loading the boat on a trailer on their premises.
But even if they are not marked so, it is understood that transportation costs and taxes are not included in the base price.
As a rule, boat sales are not carried out directly from the shipyard, but through an intermediary - a dealer or distributor. Only some shipyards specializing in production of small boats (up to 7 meters) or small brands without an extensive dealer network sell their boats themselves. Does it mean that if you buy a boat through a dealer you have to pay extra money for his services from your own pocket?
The answer is: no, seller's services do not increase the cost of the boat.
The dealer buys a number of hulls from the shipyard and promises to sell them. The shipyard gives the seller a discount (like a bulk purchase). The size of this discount is a trade secret, but usually it is in the range of 15-30% of the retail price of the yacht. When a dealer declares a boat for sale, he will give a retail value (the same retail value that you see on the yard's website). Moreover he can offer a small discount (usually 5-10%) on that price. The dealer pocketed the difference between the sales price to the final customer and the (discounted) purchase price from the yard. The customer receives the boat no more than the yard's retail value.
The retail price is fixed by the manufacturer and it is the same all over the world, whether the boat is sold in Russia or in Europe, says marketing director of Fairline Russia Dmitry Kazansky . A dealer who has the status of an exclusive shipyard representative (this is the status of Fairline Russia) will not only sell you a boat, but also provide after-sales and warranty services, and even help you resell the boat when you decide it is time to change it.
«Fairline Russia uses a one-stop shop approach whereby the owner is assigned a personal manager who can provide assistance and advice on all aspects of both buying and operating a yacht anywhere in the world»," explains Kazansky.
It is worth remembering that buying either directly from the yard or from a dealer can also be done by contacting a broker who will exclusively represent and defend his client's interests.
Yachts in stock and to order
On the dealer's website you can see yachts «in stock» and«to order».
A boat in stock is a boat already built and in some cases delivered to Russia. If you compare the price of an available yacht on dealer's website with the base price at the yard, the former will be 1.5-2 times higher. This is due to the fact that the price of the available boat includes a number of options not included in the standard equipment.
For example, you can see on the Fairline Russia website that the price for a pair of F//Line 33s for sale is £93000-244000 (1.5-2.1 times) more than the base price, although one of these boats is still in the UK. The Polish Galeon 400 FLY, which could be admired by spectators at the Moscow Boat Show in spring 2020, cost €331,000 (1.9 times) more than the yard's standard package.
The boat «to order» is a boat that you can order with the options that you need specifically. But you will have to wait. Since «to order» is a hull not yet built, such boats have the same «base price» at the yard (the price of the boat in standard configuration, without additional options).
If a customer orders a hull to be built from scratch, the payment can be done in stages instead of a single tranche.
«There is always some kind of advance payment and a closing payment. Small boats can be sold at the final cost all at once, for medium boats the payment can be split into two installments. And on larger boats, from 45-50 feet (13.7-15 meters) and up, payments are attributed to construction phases. Especially if the boat is custom or semi-custom. And the bigger the boat, the less serialized it is. For example, the upfront payment when you sign the contract is 20%. Put engines on the boat - another 20%. We start segmenting the interior - another 20%. And so on»," says the commercial director and co-founder of Boutique. Yachts, says Daniel Slugevich, the commercial director.
The prices indicated at the dealer's website usually do not include customs clearance, VAT and shipping costs. All this is counted and added to the cost of the boat separately in each case. «If you see the marking DDP (Delivered, duty paid,») next to the price, you don't have to expect any additional expenses.
What is more profitable: to buy a boat with all options at once or install them additionally in Russia?
Experts from itBoat agree that buying all the necessary options for a boat at once is a more sensible decision. The only sensible decision is to order additional equipment for a small boat.
«Most often, people pre-order all the options they need from the yard. That is, the base cost is usually adjusted according to what the customer needs," says the senior broker at Boutique. Yachts Dobrynya Shcherbakov, the senior broker at Boutique Yachts, says. - Besides some options can imply constructive changes, like additional reinforcement in the hull in a certain area during molding. This is required when the buyer orders
additional boom to allow the boat to carry more sails or just other sails.».
«It is important to choose a competent reseller. A good specialist knows how much things really cost: plotter, pump, air conditioner unit... If he sees that a shipyard or a dealer exaggerates prices, he will seek for fair prices for his client», - says Daniil Slugevich, Commercial Director of Boutique. Yachts.
It can also be cheaper to install the necessary equipment at the shipyard because the shipyards buy it in bulk. That means the client doesn't have to pay extra for retail markups and taxes. Besides, by entrusting the installation to the shipyard, one does not have to worry about the quality of work - after all, they will definitely be carried out by professionals who specialize in these tasks.
«When ordering option packages you can usually get a good discount from the yard," continues Dobrynja Shcherbakov. - Often this is because the yard wants to emphasize or spread something on their yachts. For example Greenline logically offers a huge discount on its hybrid system because the yachts are specialized for it. And because of its relative high price, not everyone will buy a hybrid. And don't forget about discounts at boat shows».
How are customs duties and VAT for a yacht calculated?
When importing a yacht to Russia you have to pay value added tax (VAT) and customs duty calculated against the value of the yacht. But under «» the customs office understands not at all the sum that is stated in the contract of sale. This value at the border will be established either on the basis of a special catalogue of models used by the customs officials and their previous experience in dealing with similar yachts or on the basis of an expert evaluation to be performed by the customs.
VAT rates are fixed in the Article 164 of the Tax Code of the Russian Federation. Yachts and other watercrafts are not included in the list of goods for which the reduced rate is applied; therefore, one should be guided by the maximum value - 20%.
The amount of customs duty depends on which code in the«Commodity Nomenclature of Foreign Economic Activity» (TN VED) corresponds to the imported boat. A variety of boats correspond to numbers that begin with the numbers 8901 to 8908. The classification takes into account the type of boat, the purpose of its use and its length, which is indicated in the construction certificate (not including the swim platform).
The smallest duty of only 8% of the value is levied on boats up to 7.5 meters in length with an outboard engine (regardless of whether the engine is installed at the time of importation). For boats up to 12m long with a stationary engine the rate is slightly higher at 10%. For all other yachts, including sailing boats and inflatable boats the duty rate is 15% of the value.
Price of Galeon 400 FLY presented at the Moscow Boat Show at the expense of customs duty and VAT was increased by more than €167 thousand. This is 24% of the yacht's final value.
Also you must remember that if the boat may spend some time in customs, it means additional expenses for parking.
How much does it cost to ship a yacht to Russia
This is a separate big topic with a lot of nuances depending on which the price may vary from several tens to several hundreds of thousand rubles.
First of all, the final cost is influenced by the length and weight of the hull, on which the type of equipment used for transportation depends. An off-road vehicle and trailer will suffice for a boat up to 9 metres but an 18-metre yacht needs a three-axle tractor and a semi-trailer.
A special permit for transportation of hulls less than 3.5 metres wide costs only 1,600 roubles. But for transportation of wider boats, an escort of covering vehicles is required, which means additional expenses (from 25-30 rubles per 1 km of route).
Model Fairline F//Line 33, which we have already considered as one of the examples above, is just the case when transportation by trailer would cause such complications.«Although the length of the model is only 10 meters, the width of just over 3.5 meters turns the boat into an oversized cargo».
A yacht over 4 meters in height would require not only additional escort vehicles, but also changes in logistics. It might not be possible to transport it by the shortest route - low bridges would have to be bypassed. Also the route is often 20-30% longer because of repair works on the highway, which a truck with large-size cargo has to bypass.
A part of the route is possible to pass by the water. But most often it is not by water, but by ferry.
«It is quite rare for a new boat to leave a shipyard by its own power to reach the place of deployment, if we talk about a typical case. Usually, they are transported by a combination of several means of transportation. For example: from the yard to the ferry by boat, then by ferry to Helsinki and then by boat to Moscow, says Dmitry Kazansky, marketing director of Fairline Russia. - There is a prevailing idea that a new boat has to arrive new in all senses to the place where it is permanently dislocated. All of the above does not cancel out the exception, when the buyer starts his journey straight from the yard, it happens too».
According to Dmitry Kazansky, depending on rates of the chosen carriers, seasonal load, final destination and speed of delivery from UK to Russia F//line 33 can cost £25-35 thousand. In other words you will have to pay additionally for transportation 9-13% from the base price of the model with a stationary engine.
Artem Rozhkov, the founder of the company «Exclusive Logistics», gave a detailed account of the pricing for transportation of itBoats in September 2020 .
Annual costs after purchase
The costs of a yacht are not limited to the amount needed to purchase it and then deliver it to the owner. In the future, the owner will have to make regular investments in boat maintenance: pay for parking, fuel and repairs, buy food and beverages on board, spend on communications, management and administration, pay the crew salary.
According to Business Insider, the total value of such expenses can reach 10% of the yacht price. It should be taken into account that, for example, fuel is required not only for the yacht itself, but also for water toys and tenders, while expenses even for scheduled repairs (let alone refit) will grow year by year as the equipment and the hull wear out.
As for crew salaries, according to a Dockwalk portal study published in early October, in 2020 the captain alone, depending on the size of the boat, earns on average between €3800 and €18000 per month, that is €45600-216000 per year.
One should not forget about the vehicle tax, which in Russia is regulated by article 361 of the Russian Tax Code and depends on the engine power. The rate, according to the Tax Code, ranges from 10 to 50 rubles per 1 hp. At the same time the regions of the Federation have the right to increase or decrease the rate at their discretion, but not more than 10 times. Thus the actual rate varies from 1 to 500 rubles per 1 hp.
To sum up
To understand how much the yacht will actually cost, increase its base cost by half (for options) and add 30% of that amount to pay VAT and customs clearance. You will get the amount close to the real one. And the dealer will describe the price in details. You can order a consultation from the dealer in itBoat catalogue using the feedback button on the page of the models you are interested in. Good luck with your purchase!