Buyer Aware: Purchasing a New Boat
January 8, 2026
By Colin Andrews
In December, Buyer Aware took you to the complicated subject of taxes and duties. This time, we look at realities of buying a new boat with some insider insights.
There are two channels for buying a new boat – dealer inventory or ordering a boat to be built for you.
If a dealer brings a boat to the boat show it is likely to be owned by the dealer and is being financed by the dealer. The dealer really wants you to buy that boat. Floor plan financing is expensive, and dealer margins are small, typically in the range of +/- 20%. Out of the margin they must take profit, pay the sales commission, all the company’s direct and indirect sales and marketing costs plus a contingency for warranty expense.
Boat Show and seasonal specials are builder incentives, not the dealer’s, or they may be sharing the cost of the special. Think along the lines of 2 – 3% cash discount and the pot may be sweetened with free or discounted options. So, for a $400,000 boat a 3% cash discount is $12,000, but there probably won’t be a sweetener on options.
Getting the best price – it’s complicated
So, how do you shave more off the price? The builder won’t be kicking in more so it must come from the dealer’s piece. In addition to the price of the boat you will pay freight, commissioning and dealer options/services. Options and services would typically include prepping the bottom and applying anti-fouling paint, selling you a cradle and the Transport Canada safety gear. Furthermore, an inventory boat is often a bit sparsely equipped with factory options and packs. The most popular of these will be included in a dealer inventory purchase but other features a buyer will typically want are purchased as dealer or after-market options. Dealer concession on these is relatively low hanging fruit. For example, if the cradle is priced, as a dealer option, at $4,000. The dealer’s cost to include it in the purchase price of the boat is probably $2,500. So, you’ve just increased your discount from $12,000 to $14,500. If you plan to add cockpit cushions and a dodger/bimini/connector, the dealer buys these at a trade price so you can request these at dealer cost.
Also, find out how long the boat has been in dealer inventory and confirm the model year. A boat that is nearing or past its one-year anniversary is aged stock and it becomes more expensive to carry, and profitability is way down or gone. This should be ripe for an additional cash discount, and the dealer may be able to convince the builder to share in the cost of the additional discount.
At the time of signing the contract to buy the boat you will put a deposit on the boat with a date agreed with dealer for closing and payment of the balance. You can probably put down a holding deposit of a few thousand $ and make up the balance of the deposit, typically up to 20% of the purchase price, a week or two later.
Special order
If you want a new boat, built to your specs, you will select the factory packs and options, and the dealer will order it. The deposit structure is similar to buying a dealer inventory boat. The builder will confirm your order and give it a production slot on receipt of deposit from the dealer. The factory typically requires 20 – 30% deposit, so it is standard operating procedure for you to get the deposit protocol in clear terms from your dealer when signing the purchase contract. The factory will require full payment, fob factory, typically two weeks before the boat is shipped. Your dealer will know when the boat will be ready to ship and will come to you for the balance, including the freight cost, a few weeks in advance.
When the boat arrives, the dealer will inspect the boat thoroughly and advise the builder within a week or less if there are any visible defects. That sets the wheels in motion for whatever remediation is appropriate in the instance. You will be given the opportunity to inspect it as well. This should be done in the company of your dealer rep or principal, and photos are a very good idea.
The boat will probably arrive with shrink wrap covering, particularly if a winter delivery, but this should be confirmed when you are doing the purchase order, especially if it is a chargeable item. If the boat arrives during the off season and the dealer won’t start the commissioning until suitable weather returns, it is important that the boat remain covered.
Some buyers have their boat surveyed before accepting it to ensure that any deficiencies not evident during the dealer or buyer post-arrival inspection are documented for appropriate remediation.
Financing
Most dealers can and do offer financing. The dealer works with a lender or broker who provides the actual funding on agreed terms. Interest rates are typically higher than bank loans but there may be offsetting features of equal value.
First off, if you are going to borrow, go to your bank and talk with them about terms, rates, limits, loan vs line of credit and any special incentives they offer. That will be your benchmark when you pursue financing available through your dealer.
There is one well known and respected lender in the Ontario market region which specializes in recreational products financing. They know boats and the market thoroughly and work with banks or credit unions which will support the specialized requirements of the boat buying market. One differentiator, for example, is the boat is the collateral. You will prove your ability to pay, and the lender will not require your home or portfolio or other form of security.
Pretty much all the boats supplying the Canadian market are imports; Europe and USA primarily. The builders price their boats in Euros, Pounds, US Dollar, etc. They don’t provide their dealers with price lists in C$ and the dealers use the country-of-origin currency price list. So, the Lagoon catamaran you have your heart set on will be priced by your dealer in Euro. The dealer may offer to convert the contract value to C$ but this may work for you or against you. Because currency value fluctuates frequently and potentially through a 5% range during the period your boat is being built, the dealer may pad the price to offer a C$ contract. They would also take out futures on the Euro to hedge against significant drop in the C$ and that also comes at a cost. The benefit to you, the buyer, is that you have a wrap price and you don’t need to think about or second guess yourself on the matter.
On the other hand, if you’re at home with working with currency exchange you can opt to pay for the boat in its underlying currency. You can work with your bank to secure the Euro when needed in the amount needed. Again, go to your bank first so that you can use their terms as a benchmark. Boat dealers use foreign exchange firms because they almost invariably can offer better rates than the banks.
About the author
Colin Andrews is the senior broker at Port Whitby Marine Centre’s Swans yacht sales division. His involvement in the boating industry spans manufacturing, distribution and services sectors, dating from university onwards. He is an active member of Ashbridge’s Bay Yacht Club and happily sails, with his spouse, Barb, aboard their Beneteau 331. Sailing interests include racing, race committee, cruising on Lake Ontario and Caribbean charters.
