Buying a Boat at Auction: Insurance Salvage, Impound and Lien-Sale Boats Without Nasty Surprises

Find and save the terms of sale. Look for:

• Buyer's premium and fees added to the winning bid
• Deposit and payment deadline (and which payment methods are accepted)
• Pickup deadline and daily storage fees after it. BoatUS notes the winner of an insurance auction has a short time to remove the boat from the yard.
• What title or paperwork comes with the boat (see step 2)
• Whether the trailer, motor and equipment shown in photos are included
• Whether inspection before the sale is allowed, and when

If the terms don't say what paperwork you'll get, ask in writing. If they won't answer, walk away.

The paperwork decides whether you can register, insure, finance and later sell the boat:

• Clear title (or registration in non-title states): the best case, common on repos and some estate sales.
• Salvage or branded title: many states brand total-loss boats (our salvage title guide explains the brands). Expect lower resale value, and some insurers and lenders won't cover them or will need a survey.
• Lien-sale or certificate-of-sale papers: the seller's statutory paperwork, which you take to the state agency to apply for a new title.
• Bonded title: when ownership papers are missing, some states let you title the boat by posting a bond. Texas, for example, publishes a list of abandoned boats and motors that someone has applied to title through its bonded title process, and calls that route more expensive and slower than a normal transfer.
• Documented boats: ownership is a federal Coast Guard record, so the state paperwork alone may not be enough (see our expired documentation guide). For a documented boat sold after a court order or a forfeiture, the Coast Guard's documentation center has a special bill of sale for the government seller (form CG-1356); ask the auction whether it will provide one.

Call your state boating agency with the auction lot description and ask exactly what you'll need to title and register it.

Some liens can follow the boat even after an auction. Florida's marina lien law is a good example: a good-faith buyer at a marina lien sale takes the boat free of other claims except a prior lien perfected under state or federal law, such as a lender's lien on the title or a preferred ship mortgage on a documented boat. Before you bid:

• Ask the auction for the lien search or notice records.
• Check the title or state record for a lienholder.
• For documented boats, order an abstract of title from the Coast Guard's documentation center.

Our paperwork and lien-sale guides walk through these checks.

Photograph the hull identification number (HIN) and every engine serial number, and compare them with the auction listing and paperwork. Signs of trouble: a missing, ground-off or replaced HIN plate, numbers that don't match the paperwork, or a "state-assigned" HIN with no explanation.

Don't rely on one database. NICB's free VINCheck searches theft and salvage records from participating insurers only, is built around 17-character vehicle VINs, and covers only some watercraft; most boat HINs are 12 characters. A clean or empty result doesn't prove the boat is clean. Ask the state agency and, for documented boats, the Coast Guard record as well.

Most auction yards allow a preview but no sea trial and no engine run. Use the time well:

• Hull and deck: cracks, crushed areas, repairs, delamination; tap with a plastic mallet for dull spots. Use our used-boat inspection guide.
• Signs of sinking: a waterline of dirt or scum inside the cabin or bilge, silt in lockers, rusted fasteners, corroded wiring, wet or smelly foam and upholstery.
• Transom and stringers: soft spots, flexing, wet core (see our transom and stringer guide).
• Trailer: if included, check tires, bearings, frame rust, lights and title or registration for the trailer itself.

BoatUS warns that a boat that looks fairly undamaged may have been underwater for days, and that it's safer to assume the worst for a boat that sank in salt water. If you're bidding on anything bigger than a small runabout, hire an accredited marine surveyor before you bid.

Engines can be half of a small boat's value. If there's any sign the boat sank or was swamped, budget as if the engine needs a full rebuild or replacement until a technician proves otherwise. BoatUS points out that engines often aren't flushed and pickled quickly after a storm, so corrosion sets in. Don't crank or start an engine that may have water in it; our submerged-engine guide explains why.

Remaining factory warranty or extended coverage usually depends on the manufacturer approving a transfer. Mercury's US transfer page, for example, says it may refuse to transfer coverage on engines bought as repossessions, at auction, from a salvage yard, liquidator or insurance company, or from unauthorized dealers, and that it may require a paid dealer inspection first. Price the boat as if it has no warranty. If coverage matters, ask the engine maker before you bid.

Add up:

• Winning bid plus buyer's premium and fees
• Sales or use tax at registration (our tax guide covers this)
• Title, registration and any bond costs
• Transport, and storage while you repair
• Survey, engine inspection, parts and labor

BoatUS notes that paying a yard to repair a badly storm-damaged boat is rarely cost-effective, because labor can run to hundreds of hours. Set a maximum bid from this total, write it down, and stick to it.

• Confirm the yard's pickup hours, loading help (forklift or travel lift) and deadline.
• If the boat has no trailer or the trailer isn't roadworthy, line up a licensed boat transporter in advance (our transporter guide shows how to check one).
• Measure width and height; wide boats may need oversize permits.
• Arrange a place to keep it. BoatUS suggests checking that zoning or HOA rules allow a project boat at home.

Register, place your deposit, and bid only up to your written maximum. Online auctions can run for weeks and end with a rush; don't chase the price past your number. Losing an auction costs nothing; overpaying for a wreck can cost years.

• Pay within the deadline and get a receipt, bill of sale and all ownership documents.
• Take them to your state agency to title and register the boat (and pay any use tax) within its deadline.
• Get insurance in place before transport; ask your insurer how it handles branded titles.
• Keep every auction document, photo and receipt; the next buyer will want to see them.

Before launch, have a qualified technician check fuel lines and tank, steering, through-hulls and seacocks, bilge pumps and wiring. On a boat that sank, plan to replace fuel hoses, electrical connections and upholstery foam. Our launch checklist and sea-trial-after-service guide help with the first outing.