Boat engines come in an wide variety, but the standard three options are outboards, inboards, and stern drives. Each type has its own unique personality that you should consider before purchasing a new vessel. Knowing more about each design can help you be a more informed consumer and buy the boat that is best for you.
Outboard motors are the most common design. These motors are hooked into the transom of the boat, and the engine, propulsion system, and trim are all in one self-contained design. This is one of their chief advantages: should an outboard break or need repair, they are much easier to access and replace than the other two kinds of engines. Maintenance is easier and they work fine in both salt and freshwater. Another advantage is that they can be tilted up, allowing you to easily access shallow areas or dock the boat on a beach. They do produce quite a bit of wake, making them less ideal for skiing, and they are more exposed to the elements as well. All in all though, outboards are a great choice for anyone looking for a multi-purpose boat. They are typically found on fishing boats, skiffs, pontoon boats, jon boats, and runarounds.
Inboard motors are typically found on ski boats. Manufacturers like Mastercraft, Nautique, and Moomba all use inboard motors. This type of design gives a boat an engine almost like a sports car. They accelerate extremely fast and can turn easier than the other designs. The engine is usually seated under a covering in the middle of the boat, with the propeller attached to a long drive train underneath the boat. The rudder is controlled separately, which creates a better turning radius and improved handling as compared to outboards or stern drives. Engine access is simple, making them easy to work on, but they are expensive, so maintenance costs can be prohibitive. I would not recommend them for saltwater, as the high-performance engines can corrode easily. If you are looking for a boat that is great for watersports, then this is the kind to buy.
Stern drives, sometimes called inboard outboard motors, are a hydrid design, mixing features of both the others. The motor is located inside of the boat, at the stern. A small steering and propulsion piece sticks out from the back of the transom that looks very much like the bottom half of an outboard. Stern drives are often found on deck boats, larger fishing boats, or on simple runarounds. They handle very differently from the other two and it takes some getting used to. They are cheaper than inboard boats and the motor is better protected from the weather than on an outboard, but actually working on it is a huge hassle. As a general rule of thumb, I would not recommend this design unless you see one for a great price or are looking for a dedicated offshore fishing vessel. The engines are generally inferior to inboard ones and the heavy weight so low in the stern makes the bow ride very high unti you get up on plane.