Small outboards are relatively cheap, so repairs on small outboards can become uneconomical very quickly and easily.
First, we should define what a “small outboard” is. There is no line set in stone regarding what horsepower ranges qualify as small outboards, but a good rule of thumb is whether the outboard is classed as “portable”. Portable outboards are clamped onto the transom of a vessel, while outboards that are bolted onto the transom are generally not portable. There are exceptions to this rule of thumb so another consideration would be that outboard motors over 15 hp would not normally be considered portable due to weight.
You can walk into several different local marine retailers in this area and walk out the door with a brand-new Mercury 8hp 4-stroke outboard with a 3 to 5-year factory warranty on it for around $2000. If you have a Mercury outboard, and it needs repairs that need to be paid for, then it is no longer under warranty and is 3 to 5 years old or more.
A rule of thumb in the marine repair business is to strongly consider replacing an item if the cost to repair it is getting close to 50% of the cost of replacement, especially if the new one has a good warranty on it. (Mercury’s factory warranty is fantastic, BTW). By this measure, repairs approaching $1000 on an 8 HP Mercury outboard merit at least looking at the option of replacing the outboard with a new one.
The training required for a technician, and the cost per hour to employ that technician is the same if he is working on a 350 HP Mercury Verado or if he is working on an 8 HP 2-Stroke. Even though a smaller outboard will require less labor and the parts required are cheaper, as a percentage of the value of a replacement unit, the relative costs are much higher for the small outboard than a larger one.
For example, the cost in parts and labor to replace the cylinder head on a Mercury 8 HP 4-stroke outboard is about 33% of the cost to replace the entire outboard with new one, while the cost in parts and labor to replace the cylinder head on a Verado 350 is about 10% of the price to replace that Verado with new.
Add in the parts and labor for an annual service, and the cost to repair and service the 8 HP outboard is near 50% of buying a new one, while adding in the cost to service the Verado after the head is replaced and the bill is still close to 10% of the cost to replace the unit.
This equation changes somewhat if you are handy with a set of tools and are willing to do your own repairs. Armed with a service manual and a good source for parts, you can get much deeper into repairs and still be cost effective. Be aware that if you take it apart and then decide you are over your head and take it to a shop, it will cost even more to repair than it would have.
The take-away from this is that if your 20-year old 9.9 2-stroke outboard needs a carburetor rebuild, the lower unit has water in it, and it has not been serviced in 5 years, we strongly recommend considering buying a new outboard unless you have free time, disposable income, and enjoy working on outboard motors. Otherwise the smart choice is to sell that outboard on Craigslist and get a new one so you can get back out on the water!