Buying a used boat? How to spot red flags

It's said that the two best days in a boat owner's life are the day they buy the boat and the day they sell it. While not every day is filled with maintaining or repairing a boat, you'll likely face some of those expenses.

When your boat is running smoothly, it can be a lot of fun for the whole family. But replacing the carpet, seats, steering cables, batteries and even the impeller on a 50-horsepower outboard all cost money.

You wouldn't buy a car without carefully considering its condition — and the shape of your personal finances. Take the same care when buying a boat. Read on to see what to look for when buying a used boat.

1. How to inspect a used boat

Ask the seller for an opportunity to have an inspection performed by a qualified boat mechanic. It's helpful to have a copy of the seller's maintenance records. If you talk to the seller and get an uneasy feeling — or if they're not forthcoming on the maintenance they performed — it may be best to step away.

Enlist the help of a mechanic who's familiar with your make and model to perform a thorough inspection. It's also important to note that even if you have owned boats previously, you may want to seek out a qualified mechanic's advice. Let's take a look at how to inspect a used boat and the questions to ask your mechanic:

Is the motor in good shape?

When you're out on the water with your family and friends, there's nothing more frustrating than hearing the motor putter out — or not being able to crank it when you're ready to head home. Your boat's motor is its lifeline. If your boat motor dies, the only solution is paddling your way in or getting a tow.

Even if you're buying a used sailboat, you'll probably have a backup motor and will want it to work if the wind doesn't cooperate.

A trustworthy mechanic will ensure the impeller is ejecting an appropriate amount of water to sufficiently cool the engine. They'll understand the difference between an outboard and inboard motor and will know if it's been well cared for with routine oil changes and maintenance.

If your boat's motor has been neglected, chances are other boat maintenance is lacking as well.

Are there any electrical problems?

Depending on the complexity of your boat, electrical problems can range from a simple battery terminal needing replacement to complicated issues on a houseboat or an open ocean vessel.

Test the electrical components like lighting, radios or other electrically powered accessories. Address any repairs that you or your mechanic can find.

Are there signs of corrosion or decay?

Corrosion can take on many different forms, whether your boat is made of wood, aluminum or fiberglass. An experienced mechanic will know where to look and the signs to look for.

If you're considering buying a saltwater vessel, be sure the mechanic checks the sacrificial anodes, which are used to protect the metal parts of a boat from corrosion. Because these anodes corrode more easily than other parts of the boat, they're intended to be sacrificed and eventually replaced. Check every location, including the boat trailer.

Is the trailer in good working order?

While the boat gets most of the attention, it won't do you much good if you can't get it to the water. Trailer damage can be costly, so be sure your mechanic checks it out too.

In addition to checking for corrosion on the trailer, confirm that all the electrical components, such as the brake lights and signals, are in good working order.

When you launch your boat, the back half of the trailer will be submerged in water, so be sure the trailer lights are waterproof. A leaky light housing can also cause electrical problems.

Trailer wheel bearings need to be repacked as part of routine maintenance. When they're worn out, they need to be replaced.

Finally, ask your mechanic to check for tire rot, including on the spare tire.

Is there water damage?

It's inevitable that water will get into your boat. Ensure your boat has a working bilge pump to help remove extra water. If you've had a wave or wake crash water inside of your boat, make sure to open all the compartments and dry them out with a fan to avoid water damage.

If the used boat you're thinking about buying has a roof, inspect it for signs of water damage. Check for water damage spots or swelling on the ceiling, around hatches and on countertops.

2. Take the boat for a test drive

If possible, take it for a ride. Not only will it allow you to run the motor through all its paces, but you'll also have a chance to see how the boat handles. Is the throttle and steering smooth, or are the cables showing signs of wear or binding?

It's not always realistic that you'll be able to get the boat in the water. You may want to make arrangements with the seller to verify the motor is in working order — like having a mechanic inspect it or using a motor flusher for example. Get a complete maintenance history, confirm that the electronics work and that the motor runs without overheating.

3. Assess the financial impact of buying a used boat

In addition to the mechanical aspects of buying a boat, also consider the financial impact. Like a car, the purchase price is only the beginning. The total cost of owning a boat includes the cost of insurance, routine maintenance, any storage accommodations you may have, unexpected repairs, registration fees and gas. The average boater may pay a few hundred dollars a year for boat insurance, but it can be more depending on claims history and boating experience.

While you may be able to afford these expenses, ask yourself if it would keep you from accomplishing more pressing financial goals. If buying a boat means redirecting your retirement savings, you'll likely regret it down the road.

4. Understand your purchase options

With proper planning and budgeting, you may be able to start charting the financial course to owning a boat.

Cash purchases are typically the most straightforward way to get into a new or used boat. But depending on the price of the boat, the cash outlay may be significant. It's important to not invade things like your emergency fund or other long-term savings just to buy your boat. Ideally your boat purchase should not negatively affect your other financial goals like college funding or retirement planning.

Boat loans may be available through your bank or credit union. USAA Bank offers boat loans with a $5,000 minimum loan amount. Trailers can potentially be financed as well. Review any loan options you consider. Understand the terms, fees, rates or other costs involved before applying.

Protect your boat and your finances.

Some marinas may require you to carry boat insurance and some states require boat owners to carry at least liability coverage. If you're financing your boat purchase, your lender will likely require insurance as well.

Boat insurance typically covers theft, vandalism, fire and weather-related damage. Boat insurance can also help protect your finances if you're liable for injuries or property damage. Like auto insurance, boat insurance typically doesn't cover maintenance or wear and tear.

The USAA Advice Center provides general advice, tools and resources to guide your journey. Content may mention products, features or services that USAA Federal Savings Bank does not offer. The information contained is provided for informational purposes only and is not intended to represent any endorsement, expressed or implied, by USAA or any affiliates. All information provided is subject to change without notice.