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Well, Hello Fellow 38' Regal owner!
Ours is a '69 38' regal, the first one off of the line.
It was repowered in 87 with two big block Ford 460's, which I wouldn't trade for the world.
We get about a mile a gallon, and the gen usually will burn a gallon an hour.
i've cheated on the gen lately though - we spend nearly every weekend on an island with the boat and have to create our own juice. I finally bought a Honda 2000i gen which is plenty to run the fridge, fans, microwave, oven, water heater (one big appliance at a time, of course.) At 10-12 hours per gallon, we've about paid that thing off with the difference in fuel consumption in one summer!
I would not down size your engines. Ours are pretty special boats - having a putting 38' wouldn't be good in my opinion. I love it when owners of newer clorox bottle boats our size come cruising up - I can leave them in my wake and it's good!
As a wise friend of mine said:
"Gas is (still) the cheapest thing you'll put in a boat."
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