DOCUMENTING YOUR BOAT -- PROS AND CONS
WHICH VESSELS MUST BE DOCUMENTED?
With a few exceptions, all vessels of 5 or more net tons which are used in coastwise trade, Great Lakes trade, or the fisheries, on the navigable waters of the U.S. or the Exclusive Economic Zone must be documented. A commercial vessel of 5 or more net tons engaged in foreign trade is eligible, but not required, to be documented. A recreational boat, owned by a U.S. citizen, may (at the option of the owner) also be documented if it is 5 or more net tons. The Certificate of Docurnentation is issued by the Coast Guard.
WHICH VESSELS MUST BE NUMBERED?
Federal law requires any undocumented vessel equipped with propulsion machinery to be numbered in the State in which it is principally operated. The law allows the States to create their own numbering systems as long as they meet or exceed Federal requirements.
ADVANTAGES AND DISADVANTAGES OF DOCUMENTATION
If the owner has a choice between the two forms of registration, what are the advantages or disadvantages of documenting the boat?
Advantages: The main benefit of documentation versus numbering, is that a documented vessel may be the subject of a Preferred Ship Mortgage under 46 United States Code Chapter 313. In practical terms, this means that lending institutions regard a documented vessel as a more secure form of collateral. For larger and more expensive boats, it may be easier to obtain bank financing if the boat is documented rather than numbered.
Another benefit is that the certificate of documentation may make customs entry and clearance easier in foreign ports. The document is treated as a form of national registration that clearly identifies the nationality of the vessel.
Disadvantages: The main disadvantage of documenting rather than numbering is the higher cost. The initial documentation fee for a recreational vessel is $100.00. The numbering fee varies from State to State but averages about $25.00. In addition, documented vessels are not exempt from State or local taxes or other boating fees. Some individual States require a registration fee even if a boat is documented.
From U.S. Coast Guard Consumer Fact Sheet