Everyone who loves to have fun on the water knows how cool a pontoon boat can be. The things you can do on one of these boats can turn a boring day on the water into a fun-filled fishing trip, a water-sport adventure or beer-fueled party. But with such a basic design why are these boats so expensive?
Pontoon boats are expensive because they are luxury boats. As they are made in the USA production costs are high. Demand is high for pontoon boats and there is a growing trend for them thus allowing manufacturers to ask for higher prices. Although it is expensive to build a pontoon boat there is a certain amount of markup on the price due to high demand for these vessels though this is not as high as most people think.
Why are pontoon boats so expensive to buy?
With price tags as high as $250,000 pontoon boats are not cheap. Even mid level boats can cost up to $125,000.
How can pontoon boat manufacture’s justify such high price tags?
To answer that question let’s break down the basic costs of building a pontoon boat to see what the profit margin is for the manufacturer.
Material costs to build a pontoon boat
Basic costs of materials to build a three tube pontoon boat:
- The aluminum rolls and computer welding cost : $2,700.
- For 3 pontoons add an additional: $1,400.
- Frame and decking: $1,500.
This amounts to approximately $5,600 in materials for the pontoons, frame and deck. But of course this is just the basic shell of the boat, now we need to look at the motor and furniture, fencing and rigging.
- A typical 200 hp pontoon motor will cost: $20,000.
- Furniture & upholstery (including rigging) will cost approximately: $15,000.
So you now have the raw materials for a pretty cool pontoon boat. Let’s calculate those costs.
Basic boat shell: $5,600
Motor & Upholstery: $35,000
$40,600 sounds like a lot of money the manufacturers have to splash out to make a pontoon boat and seems to go a long way towards the cost of the boat, until you look at the price tag that is. These figures relate to the type of pontoon boat that retails for about $125,000. There’s a big difference in those two numbers.
So, is the difference between the material costs to make the boat and the selling price, ($125,000 – $40,600 = $84,400), all pure profit? Is this just markup in the extreme?
Well, on first impressions it would appear to be greed on the part of the pontoon boat manufacturer but there are some key factors that have been left out … namely, production costs!
Production costs of building a pontoon boat
A pontoon boat doesn’t build itself.
To build a boat you need a trained workforce and they need the equipment, tools and machines necessary to carry out the task.
On top of that they need a factory to work in that has all the necessary amenities. This factory doesn’t run no air. A factory requires utilities to run properly.
The majority of American bought pontoon boats are actually made in the United States. USA built pontoon boats are manufactured mostly in Indiana and Michigan. Now Michigan may be the home of the assembly line (which reduced production costs considerably) but it is still located in an expensive first world country.
Factories can cost up to $20,000,000 to build or buy in the USA and most pontoon factories will be mortgaged. Mortgage payments on a $20,000,000 commercial property can be over $113,000 per month.
The average cost of utilities alone, for a commercial building, is $2.10 per square foot.
Now, what about the people who build the pontoon boats? They don’t work for free.
Depending on where the pontoon boats are manufactured wages can account for most of the costs associated with production or a huge chuck of it. Boats built in the USA carry very high production costs for obvious reasons. Americans get paid more than third world workers.
The average factory worker in the USA gets paid about $14 per hour. This does not include profit sharing plans and bonuses.
Let’s not forget we need to factor in vacation pay and sickness benefit, health insurance etc. etc.
When we start to add these costs to the material costs of the pontoon boat we can see how the profit of the manufacturer starts to shrink quite quickly and significantly.
I haven’t even added government taxes!
Also take into account that no mass production of pontoon boats occurs. With mass production comes bulk buying of materials. Bulk buying equals savings on costs.
With other boat types, like a Jon boat, mass production means bulk buying of materials which in turn leads to savings on purchasing costs for the manufacturer. These savings are then passed on to the consumer. Without the same type of mass production there are no savings to pass on to pontoon boat buyers.
So are new pontoon boats expensive really?
Yes they are!
However, all boats tend to be expensive no matter what the type. Unfortunately though pontoon boats seem to be a little pricier than others.
Although it takes quite a lot of money to build a pontoon boat there is an inflated markup price on them simply because they are so popular these days. However, the markup is not as high as most people think it is.
It costs a considerable amount of money to build a pontoon boat. What’s more bulk manufacturing does not take place on the same scale as it does with more popular boats and so this also makes production costs higher.
Why are used pontoon boats also expensive?
Just as supply and demand has pushed up the price of new pontoon boats it is also responsible for the high prices being charged for used pontoon boats.
Even boats that are 10+ years old are fetching ridiculously high prices. Why is a used pontoon boat holding its price so well compared to other boat types?
It is basically because new pontoon boats are so expensive.
Pontoon boats do not age any better than any other type of boat. It is just that with such high prices being asked for new vessels the majority of people will enter the pontoon market looking for a used boat.
As we have already seen with high demand comes high prices.
At the moment pontoon boats are very popular and demand is high however this could easily change in the future. Fads come and go and although there are only so many things you can do with a pontoon boat there are cheaper alternatives available.
Although I believe the price of these boats will come as demand starts to wane, at the moment the trend is actually on the rise rather than in decline. We will have to wait to see if this changes.
Pontoon boats may be the best luxury party boat for inland waters on the market but there are other boats out there. The likelihood is that the current interest in pontoon boats will wane somewhat over time especially if manufacturers continue to price their boats so high. As demand falls prices will eventually follow.
The bottom line is … pontoon boats will always be with us and they will always be expensive compared to other boats but at the moment in my opinion they are over-priced.
Pontoon boats are so expensive because they are luxury boats with high production costs.
High demand, and a rising trend in pontoon boat sales, allows manufacturer’s and retailers to ask high prices.
Lack of bulk manufacturing is also a factor in higher pricing.
Used pontoon boats are also expensive because demand is high. Due to the high price of new boats most people will enter the pontoon market looking for a used alternative thus keeping prices high.