The Yacht 10% Rule, Actually Computed

Ten percent of what, exactly

The industry rule of thumb says a yacht costs about 10% of her purchase price every year to keep in the water, before depreciation. Brokers repeat it because it is short. It is also the wrong shape. The split between crew, dockage, insurance, refit, and fuel moves with length, hull type, and how hard the boat is run, and the percentage itself moves with the denominator.

Luxemetry does not apply a 10% levy. It prices the five lines directly — crew with a 30% overhead on base salary, dockage at a premium-marina rate per foot, insurance and a refit reserve against declining hull value, fuel at 250 engine hours and $5.50 a gallon — then reports the implied percentage afterward. Same functions as the yacht cost-of-ownership calculator and every model page.

On a Sanlorenzo SD96, a $15.5 million semi-displacement 96-footer, that first-year running cost is about $1,369,166, or 8.8% of price. Crew $403,000, refit reserve $658,750, insurance $158,100, fuel $82,500, dockage $66,816. Under the rule, and already a seven-figure cash number. The 10% would have been $1.55 million. The rule was high. It was not high by enough to be safe as a rounding error.

A Ferretti Yachts 720 at $6.9 million models at $702,467 a year to run, 10.2% of price — almost exactly the rule, for once. A Benetti Oasis 40M at $29.5 million models at $2,446,374, or 8.3%. The rule is a cloud around production boats in the 70-to-130-foot band. Outside that band it comes apart.

The rule fails at both ends of the dock

Below about 60 feet, the hull is cheap and the fuel is not. An Axopar 37 Sun Top is $400,000, owner-operated, no crew. First-year running cost still models at $66,395 — 16.6% of price — because 250 hours at 25 gallons an hour is $34,375 of fuel on a boat whose sticker is a rounding error on the Sanlorenzo. The percentage is terrible. The dollars are the cheapest on the site.

At the other end the hull is so expensive that even a serious operating budget looks small against it. An Oceanco 90-metre custom, $275 million, 30 crew: first-year running cost $16,043,275. That is the real cash. As a share of price it is 5.8%. A Lürssen 100-metre at $350 million models at $19,677,320, or 5.6%. The rule of thumb understates the cheque and overstates the rate, which is a dangerous pair of errors if you only remember one of them.

The loudest miss in the middle of the fleet is a fast petrol hull. The Tecnomar for Lamborghini 63 is $4.2 million and 63 feet, with one crew. Fuel at 260 gallons an hour and 250 hours is $357,500 — more than four times the Sanlorenzo, on a boat that costs a quarter as much. First-year running cost $728,152, 17.3% of price. The ownership note on that page is the whole lesson: a weekend of hard running can exceed a month of dockage.

A displacement hull of similar length goes the other way. The Absolute Navetta 64, $2.8 million, one crew, 45 gallons an hour: $294,279 a year, 10.5% of price. Same size class as the Tecnomar, roughly $434,000 a year less to keep, almost all of it fuel. Hull type is a larger lever than length at this end of the dock.

• Axopar 37 Sun Top · $400,000. No crew. Running cost $66,395, 16.6% of price. Fuel is $34,375 of that. Cheap in dollars, expensive as a rate.

• Absolute Navetta 64 · $2.8M. One crew. Running cost $294,279, 10.5%. The displacement case where the rule roughly holds.

• Tecnomar for Lamborghini 63 · $4.2M. One crew. Running cost $728,152, 17.3%. Fuel $357,500 — the planing-hull penalty in one line.

• Sanlorenzo SD96 · $15.5M. Five crew. Running cost $1,369,166, 8.8%. Refit reserve is the largest cash line.

• Benetti Oasis 40M · $29.5M. Nine crew. Running cost $2,446,374, 8.3%. Crew $772,200, still behind a $1,154,925 refit reserve.

• Oceanco 90m Custom · $275M. Thirty crew. Running cost $16,043,275, 5.8%. The cheque is enormous. The percentage is not.

The 10% rule is closest on 70-to-100-foot production boats run gently. It is a poor description of a 40-knot dayboat, and a dangerous one of a 90-metre custom whose cash budget is sixteen million dollars.

Crew is a step. Fuel is a choice.

Crew does not scale smoothly. It arrives in steps. Owner-operation is realistic into the high 40s and, for some people, the low 50s. The Fairline Squadron 58 is where the dataset puts a single crew member on the books, about $71,500 a year with overhead — the largest single jump in the cost curve anywhere in the directory. Three crew on a Princess Y85 is about $234,000. Nine on the Benetti is $772,200. Thirty on the Oceanco is $2,964,000.

Above roughly 80 feet, full-time crew stops being optional, which is why the running-cost composition flips. On the Tecnomar, fuel is 49% of first-year running cost and crew is 11%. On the Benetti, crew is 32% and fuel is 5%. On the Oceanco, the $2.96 million payroll is still smaller than the $10.0 million refit reserve. Asking "is it about 10%" hides which line is about to surprise you.

Fuel is the line you actually control. The model uses 250 engine hours at the published burn and $5.50 a gallon. That is a use assumption, not a physical constant. Halve the hours on the Tecnomar and you take about $178,750 off the year; do the same on the Sanlorenzo and you take about $41,250. The fast hull is a fuel option you keep exercising. The displacement hull is a fuel option you have already declined.

Dockage is the line people remember and the one that rarely dominates. Twelve months at a premium rate is $13,320 on the Axopar, $66,816 on the Sanlorenzo, $389,400 on the Oceanco. Real berths at 90 and 100 metres are scarce enough that the constraint is availability rather than the rate, which the model cannot price. Confirm the berth before you confirm the build.

Depreciation is the larger half, and nobody budgets it

Everything above is cash. Depreciation is not on the 10% rule, and it is usually the bigger number. The Sanlorenzo is modeled to shed $2,325,000 in year one on top of $1,369,166 of running cost — $3,694,166 all-in that year. Over five years the average all-in cost is about $2,429,924 a year, of which $5,890,000 is lost hull value. Running cost is not the expensive part of owning this boat. Buying it is.

The same split holds on the Ferretti 720: five-year average all-in about $1,262,609 a year, against $702,467 of first-year cash. On the Benetti, $4,218,262 a year all-in against $2,446,374 of cash. A Feadship 50-metre, which holds value as well as anything in yachting, still averages about $7,358,666 a year because a 21% five-year haircut on $68 million is $14.3 million.

This is why the charter-versus-own calculator exists, and why the Mediterranean charter guide comes out the way it does. Six weeks aboard the Sanlorenzo, chartered, is modeled at about $1,150,200 including APA and extras. Owning the same boat is $2,429,924 a year. Break-even sits beyond twelve weeks aboard. The 10% rule never mentions that comparison, because the 10% rule is trying to talk you into a budget, not out of a purchase.

If you are going to own, budget the five lines at the hours you will actually run, then add the depreciation the retention curve implies for your holding period. The yacht cost-of-ownership calculator will do both on any boat in the directory. The 10% rule can stay on the brokerage deck as a sanity check. It should not be the number that decides the build.