If you are considering an RV for vacation purposes, you have two choices; you can make an outright purchase, or you can opt to rent a vehicle just for the length of your holiday. You just need to be aware of the RV Prices & Costs you’re likely to encounter.
Both of these options have merit, and which you choose is personal, so let’s look at the options you have.
As it’s not possible to cover all aspects of either buying or renting in one article, given the vast number of ramifications, this review will give you some broad brushstrokes that you can use. Look at this as an exercise to help you decide what is most likely the best path for you to follow.
We will look at outright purchases, including some pitfalls to avoid when buying; then we will look at the costs associated with renting for a vacation.
RV Prices: Purchase Outright
The purchase of an RV takes careful consideration, and, before you leap into buying the flashy unit advertised in the morning newspaper, perhaps you should take a little time to understand exactly what you are getting into.
Things that you should be considering are (a) what do you intend to do with this RV, (b) what are your family’s needs concerning traveling, and (c) how much can you spend up front and how much will it cost you each month.
What do you intend to do with this RV?
This may sound like a ludicrous question, but it does need some thought.
- Do you intend to live in the RV full time and become a gypsy?
- Is this RV just for vacations? If so where do you plan traveling with it? If you are the adventurous type of family, it is highly unlikely that you want to take a million-dollar motorhome and drag it through the wild side so you can undertake wilderness adventures.
- What tow car do you have, or will you want a coach type of RV?
- How many people will you need to accommodate?
- Will you use this during winter, when heating will be an issue?
All of these questions must be considered first so you have a good idea of what you want to buy, as there is a vast difference in price between a travel trailer, a 5th wheel trailer, and a coach type RV.
Types of RV
There are several types of RV, and the class or type of RV can also drastically affect the price. Let’s start out by looking at the classes of RV that you will find in the market.
Class A RVs are the very large coach-style of RV. They vary in size, but the majority are between 20 and 45 feet in length and are normally the epitome of luxury RV travel. They can be either gas or diesel powered but regardless of the type of fuel, they will be heavy on gas, after all, they are large vehicles carrying a heavy load. This class of RV will be fitted with all the modern conveniences. It is difficult to maneuver and will not fit into many smaller campgrounds.
This is the smallest of the vehicle type of RV and are also known, in some circles, as campervans or sleeper-vans. This makes them the easiest of the RVs to drive and they will also be cheaper to buy and run. Due to their reduced size, they will not have all the luxury conveniences fitted. They still do have the basic amenities, however, and can make for a great, less expensive vacation. These RVs will fit in any campground.
This is the “medium” size vehicle RV. They are built on the chassis of a medium size truck and will give you all that you need for a comfortable holiday. These are the campers with the over-cab sleeping area. They will contain more modest amenities than the class A but are still fitted with all that you need for a lovely camping holiday. They are also either gas or diesel powered, but the fuel consumption will be considerably less than the Class A vehicles.
This is the first type of towed RV. Travel trailers are towed behind a vehicle by means of a ball mount trailer hitch. There are several types of travel trailers, but they all require a tow vehicle of the correct size to match the size of the trailer.
Pop-Up and Foldable Trailers
These are the smallest and most compact of the travel trailers. When closed they appear something like a utility trailer, but once at the campground, they open up to reveal a travel trailer. Due to the lack of space, they will contain the most basic of amenities, but, because they are lightweight, they are easy to tow and will impact your fuel consumption the least.
There is a very large selection of towable RVs and the sizes vary considerably. They range in size and weight from lightweight, single-axle trailers to large, luxurious, double-axel models. There are many floorplans available and the amenities installed are also quite varied, so look around before buying.
5th Wheel Trailers
These are also towable RVs, but they have to be towed by a truck, as the hitch is specialized and has to be fitted to the bed of the truck. This type of towable RV is large and usually luxurious with more than one level of accommodation. These also can be difficult to accommodate in many smaller campgrounds.
Some examples of the cost of RVs
Before going into the costs overview, here are a few examples of the wide variety of price that you are looking at for various types of RV. Obviously, age, mileage, and condition also play a considerable part in assessing the value of a vehicle.
- Motor Homes 2 Go, Michigan – New 2020 Jayco Alante 29F – Sleeps 8 – $132,145
- Motor Homes 2 Go, Michigan – New 2020 Entegra Coach Anthem 44B – Sleeps 4 – $550,404
- Motor Homes 2 Go, Michigan – New 2020 Entegra Coach Aspire 44R – Sleeps 8 – $471,619
- Motor Home Specialist Inc, Texas – Realm FS6 Luxury Villa Master Suite (LVMS) Bath & ½ – $904,999
- Conejo Wholesale Auto & RV, California – New 2020 Fleetwood Flair 29M – $89,990
- Motor Homes 2 Go, Michigan – Used 2018 Thor Motor Coach ACE 30.2 – Sleeps 8 – $82,990
- Motor Homes 2 Go, Michigan – Used 2017 Forest River Georgetown 329DS – Sleeps 5 – $82,990
- Optimum RV, Florida – Used 1995 Damon INTRUDER 34 – Sleeps 4 – $9,993
- Best Time RV, Los Angeles – Used 2020 Hymer Aktiv 2.0 – $102,988
- Conejo Wholesale Auto & RV, California – New 2020 Winnebago ERA 70A 4X4 24ft Mercedes Turbo Diesel Sprinter – $123,990
- Motor Homes 2 Go, Michigan – New 2020 Gulf Stream BT Cruiser 5230 – Sleeps 4 – $89,272
- Motor Homes 2 Go, Michigan – New 2020 Gulf Stream BT Cruiser 5245 – Sleeps 4 – $107,914
- Motor Homes 2 Go, Michigan – Used 2018 Thor Motor Coach Chateau 23U – Sleeps 6 – $49,900
Travel Trailers (towable RVs that can be towed by any suitable vehicle)
- Optimum RV, Florida – New 2020 CrossRoads RV Volante 30EK – Sleeps 5 – $36,485
- Optimum RV, Florida – New 2020 Dutchmen RV Aspen Trail – Sleeps 5 – $15,738
5th Wheel (towable RVs that must be towed by a truck)
- Optimum RV, Florida – New 2020 CrossRoads RV Volante – Sleeps 8 – $55,921
- Optimum RV, Florida – Used 2013 Coachmen RV Chaparral 310RLTS – Sleeps 6 – $17,911
RV Ownership Cost Overview
There are several categories of cost that the prospective RV owner needs to assess.
Initial Purchase Costs
When browsing the internet or dealer’s sites, the initial purchase cost of the vehicle is usually uppermost in people’s minds, but bear in mind that this is not the only piece of the purchasing puzzle that you must consider.
It is wise to take your time and look around before settling on any vehicle. Mint-condition, pre-owned vehicles can provide a substantial saving on purchasing new, and you should not simply discount pre-owned in favor of new.
A nice, pre-owned camper or travel trailer might set you back around $15,000, while a 5th wheel or a late model, pre-owned RV of similar quality will make a dent of, at a minimum, $40,000 in your wallet. A new, middle of the road motor home should cost you in the region of $150,000 while the most expensive will ask you to part with $1 million or more.
It is worth your while to look at any extended warranties that are in place for the unit you are considering. If you are good with your hands and can undertake a lot of maintenance work on your own, then the warranty may not be justified, but if you are not a handyman then spending a few hundred dollars upfront may save you a great deal in repair costs at a dealer’s workshop.
There are very few families that can afford to part with the type of money required to by an RV in cash, so it is highly likely that you will be looking to finance this purchase. As with any financing plan, how you go about paying for your purchase will have an enormous effect on the ultimate price you pay.
All finance contracts depend on four variables: your credit score and history, the amount you put down, the interest rate, and the length of time that you take to repay the loan.
A good credit score is important, no matter what country you live in. In the USA, this is a number expressed between 300 and 850, with a higher score being preferable, and in the UK, the score is similar in nature.
The actual calculation of the score will vary from one country to another, but they will all be based upon roughly the same variables. These include your payment history for all loans and credit cards (especially any late payments and how severe the period of delay in paying), the number, type, and age of any credit based accounts you have, and how you service those accounts, the total amount of debt that you are carrying, any public records of bankruptcy, how many recently opened credit accounts you have, how many people have requested a credit report on you, and how much revolving credit you have and how it is used. A quick search on the internet will give you several sites that will allow you to check your score.
Basic finance tells us that the larger the down-payment you have, the smaller the monthly repayments and the shorter the term. Small amounts down can mean large monthly payments.
The longer the term over which the contract is repaid generally means lower monthly premiums but ultimately a higher total cost as the interest paid will be higher over the course of the deal. Shorter terms mean higher monthly payments but a lower overall cost as the total interest paid will be smaller.
Purchase a new RV for a sticker price of $150,000 with a deposit of $50,000. The interest rate is 5% over 15 years.
In this example, the monthly payment is $790.79 with a total interest of $42,342.85 making the total cost of this vehicle $193,842.85
Now in this same example, if we reduce the number of years to 10, the monthly payment rises to $1,060.66, but the overall interest drops to $27,278.62 and the total cost of the vehicle to $178,778.62.
Reducing the time by five years has saved a total of $15,064.23.
What you end up paying will depend on your personal circumstances and what you can afford to repay each month. Make sure you spend time considering the payment with your budget so when you go in to negotiate, you know what payment range you need to stay within.
Where you purchase your RV can affect the end price of your vehicle. Some states do not charge sales tax while in others you can add 5,6 or even 9% to the sticker price of the vehicle.
Registration and Annual Licensing
The registration of an RV can add considerably to the initial purchase price. Each state in the USA has its own method of calculating the cost of registration and you will have to look up the fees applicable in the state within which you wish to register the vehicle. State fees vary as some states use age, some a flat rate, some value, and others fuel efficiency. Europe and the UK also have their own means of calculating registration and annual fees, so ensure that you find out what they are so it can be added into your calculations.
RVs are not considered dwellings by the insurance industry, so you do not need to purchase homeowners or flood insurance, but as it is an automobile, you will have to buy automobile insurance.
The charges quoted by your insurance company will be based on the standard items such as the age of the drivers, driving records, your financial history, and the value of the vehicle. Check with your insurer before purchasing as not all companies will insure RVs.
Also, it is wise to remember that RVs, like all automobiles, will be insured at their current value, not replacement value. If your RV is stolen or seriously damaged in some way you may find yourself in a situation where you still owe thousands of dollars after being paid out by the insurer. It behooves you to investigate Gap Coverage and factor that into your insurance coverage as well. Gap Coverage will pay you out the difference between your current vehicle value and your outstanding financial commitment on the vehicle.
If you have expensive items inside the vehicle, double check what your insurance covers. You may need an additional all-risks type of insurance to cover the contents of the vehicle rather than merely the vehicle itself.
Tow or towed vehicles and their costs
Here we are looking at two different types of vehicles. The first is a tow vehicle used to pull a travel trailer or a 5th wheel, and the second is a vehicle towed behind your RV to provide ease of transport once parked in a campsite.
If you are thinking of purchasing a 5th wheel or a travel trailer, you must assess the capability of your current car to tow the trailer you intend purchasing. 5th wheel units can only be hauled by trucks, so if you do not currently own a truck, the cost of purchasing one must be added to your budget.
If you are thinking of purchasing a coach type of RV, especially Class A or C, then you should seriously consider a small car to be towed behind the RV. Nothing is more frustrating than getting to a campsite and setting up your camp only to discover that you are missing something important.
Trying to maneuver such a large vehicle in tight spaces and small supermarket parking lots can be a nightmare, so a car towed behind your RV makes a great deal of sense. Also, if you want to do some sightseeing in the area, driving around in your coach can be almost impossible, especially on small country roads, so another vehicle is a good idea that may make your trip more memorable.
Maintenance of your RV
An RV, like any other vehicle, will require regular maintenance and servicing if it is to be kept in good condition and safe to drive on the road. Again, the costs will depend very much on the age and condition of your RV as well as where you take it and how many miles you drive.
Needless to say, the maintenance costs are highly unlikely to be a similar amount each month, which can make budgeting very difficult. You can expect many months to go by with no charges at all and then be hit with a few thousand all in one month, so a separate savings account with maintenance money set aside will help smooth these bumps in your family spending. The same account can be used to save for your annual expenses such as insurance, registration and licensing costs.
Some of the costs to consider, for a coach type of RV:
- Servicing – the costs of tires, oil, coolant, brake components, clutch components, and batteries.
- Condition Maintenance – replacement of carpets, replacement of upholstery, repair or replacement of cupboards, doors, mattresses, and appliances, paint and decal replacements for the exterior.
- Equipment Maintenance – thermostats for heating and cooling equipment, regular servicing for air conditioning and heating hardware, replacement of pumps for water and sewerage.
For Travel Trailers and 5th Wheels, the maintenance costs will be lower as they do not have an engine to consider, but then those maintenance costs will be necessary for the tow vehicle.
Some hidden expenses to consider
Not all the costs associated with purchasing and owning an RV are apparent up front. Here are a few expenses that may catch you out if you do not consider them:
- Storage costs – not everyone has the space to store their RV at home when it is not in use. Admittedly, you can opt to hire your RV out when it is not in use by your family, but this comes with additional risks as well, and it isn’t likely that you’d be able to rent it out constantly, so you still need storage. Parking an RV at a storage facility can set you back as much as $2,000 to $3,000 per year, so ensure that you factor this in.
- If you intend to live for long periods in your RV, understand that campsites close to big cities or popular tourist destinations will cost more than those situated in smaller towns or off the beaten track.
- Electricity, gas, and propane prices vary considerably around the county and can make a massive difference to your travel costs.
- Speed will seriously affect your costs. Maintaining a safe 55 mph will save you considerable amounts of gas or diesel and money.
- The wear and tear on your RV is not always readily apparent, but the more you use the vehicle, the more wear and tear there is.
Your Lifestyle will affect your RV costs
RV enthusiasts come from all strata of society and a myriad of backgrounds. What one family may consider a necessity, another will consider a luxury or an extravagance they can do without. This means that the type of campsite that you want to use, where you choose to eat, and what you choose to do for entertainment will all have a direct bearing on the cost of owning your RV.
Your wallet may well become the arbiter of what you can do and which options you choose as all these options are graded by cost:
- There can be a vast difference between two campsites both in what they offer and how much each night costs. Campgrounds that offer every luxury will cost more per night than a campsite that offers fewer luxuries. It is a good idea to purchase a copy of the 2019 Good Sam Travel Savings Guide for the RV & Outdoor Enthusiast, which will cost you around $20 from Amazon. This guide lists over 12,000 campsites from all over the USA and Canada and can save you thousands of dollars in campsite fees by allowing you to choose the one that suits your pocket, rather than the one you are directed to by well-meaning locals.
o Wild Camping is free.
o There are many “primitive” campgrounds where you can expect to pay between $5 and $10 per night. Here you will have ablution facilities, but it is unlikely there will be electricity or water on your site.
o National Parks will average around $25 to $30 per night for reasonable facilities.
o There are many luxurious campgrounds where you will find water and electrical hookups on site, laundries, restaurants, swimming pools, planned activities, and optional extras such as access to golf courses or horseback riding. These will cost in the region of $50 per night.
- Meals. It is a simple fact that eating what you prepare yourself will cost less than eating out all the time. While traveling, this is also true, but the fact that you are on the road should not stop you preparing your own meals. All RV campers and trailers come equipped with fridges, so keeping your food fresh and cooking your own meals should not be difficult.
- Trade labor for a stay. This can be an option in many sites. If you are good with your hands, it may be possible to trade a certain amount of maintenance work for a free stay. Many campgrounds are happy to offer you the position of Campground Host. Exploring the Local Life is a blog that will tell you more about campground hosting as well as the RV lifestyle. This job entails staying for free in exchange for doing some light maintenance and cleaning, answering queries from campers, offering information on the surrounding area, taking fees, and acting as the eyes and ears of the owners while they are not in attendance. Workers on Wheels actually gives job listings for campground hosting and for other ways to earn money while living in an RV.
Costs of Actually Traveling
Many people have the misguided notion that traveling with an RV is an inexpensive way to live. This may be true for some people, but it will not be true for all. Most large, coach-type RVs will get, at best, 8 to 12 miles to the gallon, so driving can be an expensive pastime. This is also true for those towing travel trailers and 5th wheels as the weight of these trailers behind a car can significantly impact the standard fuel consumption figures.
Do your research on the internet and look for articles that give you ideas regarding the costs of traveling around the US. Do remember to look at the date that the article was published though. Don’t fall into the trap of using information from material that is five years old.
Join one of the Discount Camping Clubs
Think about joining one of the discount camping clubs such as Passport America. These clubs offer huge discounts on thousands of campgrounds all over the USA and can save you significant amounts of money.
The cost of selling your RV
The first thing you must understand when buying an RV is that, like most cars, it is an asset that will continually drop in value—it will never appreciate in value as a fixed property has the potential to.
When the time comes for you to sell your RV, either to buy something else or because you want to give up that mode of travel, you must understand that you will lose money on the sale. There are three main reasons for this loss: (a) depreciation, (b) the continual drop in the value of the vehicle, and (c) the costs associated with selling.
You can almost guarantee that your RV will lose approximately 60% of its value over a five-year period. If you did not do your homework upfront and made poor decisions when financing the vehicle, you may find that it is impossible to sell the vehicle as it is now worth less than the outstanding amount owing.
Some tips on trying to avoid making a mess of buying your RV
There are some common mistakes made by people setting out to buy an RV. These mistakes are sometimes easily overcome, but some can cause financial ruin to the unwary, so careful consideration must be given before you sign a piece of paper or hand over your hard-earned cash.
Mistakes in buying an RV come from people who:
- Buy the first RV they see and then discover that it is utterly unsuited to their needs.
- Don’t take the time to study the market and their needs before buying.
- Don’t plan for unexpected events or changes in circumstance. That’s particularly a danger if the purchaser opts for a lower payment over a longer period of time.
- Neglect the maintenance and repairs needed.
Lack of Foresight
Buying an RV is a significant financial commitment, and many people buy looking only at their situation today without considering the years to come when your situation may be very different. You can weather unexpected storms and still retain ownership of your RV if you undertake some serious financial planning beforehand. You must understand how the buying and selling of RVs work and with this in mind, think of what may happen in the future and how you will deal with that, should it occur. Don’t stick your head in the sand and refuse to consider tomorrow; this lack of foresight can leave you in severe financial difficulty.
Many near-to-retirement people or retirees decide to purchase an RV, some even selling their brick-and-mortar houses to do so. Many buy new or almost new RVs, reasoning that they will need little or no maintenance, so they spend a considerable amount on the vehicle. They then set out to travel and enjoy their retirement, without having done their homework first, and find that they have taken on a huge financial liability.
Add into this a calamity such as illness, an accident, or a financial meltdown and the life in an RV is suddenly an economic disaster. The hapless couple then discovers that selling the RV is simply not possible. The financial and emotional costs add up very quickly.
Why is it not possible to sell?
There are several reasons why selling an RV is sometimes almost impossible. Some of these are listed here:
- The outstanding debt is higher than the current value of the vehicle because they either paid too much for it or unrealistically financed it.
- The vehicle is too old, and no finance company will fund the sale, so they are left looking for a cash buyer.
- The market is flooded with similar RVs.
- The particular model is unpopular due to features that make it very expensive to maintain.
A possible scenario that you must consider (based on a real-life story)
Here is a situation that is all too common today.
A young-at-heart couple, aged 59 (him) and 57 (her), decided to sell their house and buy an RV. They purchased a coach that was three years old, and for the next twelve years, they used the RV as a home and a work base as they traveled around, enjoying the freedom and working where they could.
At age 71 and 69, they decided the time had come to repurchase a house and sell the RV. They bought the house, did some renovations, and moved into their new home. Within months of moving into the house, the husband had a heart attack and passed away.
The widow was left with a reduced income, a house, and a debt of several thousand dollars a year to store a coach that she would never use again. The coach was valued at $40,000, but she still owed the bank $60,000, and that is not where her troubles ended. The coach needed tires, and the couple kept a pet, so the coach had animals living in it (cutting down the resale market). Banks are reluctant to finance RVs that are over ten years old, and even if she could have found someone to buy the coach for its resale value of $40,000, she would be left with a debt of $20,000 to pay before she could clear the finance contract.
The only choice left for the widow was to sell the house and move back into the coach until it was paid off. A deplorable state of affairs that was put in motion by a purchasing decision made twelve years before.
How to ensure it doesn’t happen to you
It is very clear from this example—one that is far too common today—that the very worst thing you can do is purchase an RV without doing some serious forward planning and understanding the implications of something going wrong in the future.
The lessons are simple:
- NEVER purchase a recreational vehicle unless you are confident that you can cover all the costs well into the future.
- Understand how financing works and plan within those rules. Remember that the RV will lose value, and that if you choose low payments, the RV will cost you more and a large payoff may impact your ability to sell in the future.
- Never skimp on maintenance, and ensure it is done in a timely manner.
- Be aware of issues such as keeping pets and what it does to the resale value.
As with looking at the purchase price of RV units, generalizing about the cost of rentals is equally difficult. Many factors influence rental values, such as the age of the unit, time of year, condition of the unit, and length of the rental. A newer model, with luxury features, is going to cost considerably more than its counterpart that is a few years old and has been used by many families.
Some of the other types of RVs such as Toy Haulers and Pop-Ups are much more difficult to find in the rental market, and the pricing fluctuates wildly.
To give some very generalized pricing:
Class A RVs that are several years old and have some mileage on them should cost ± $200 per night (p.n.)
Class A RVs that are new with low mileage should cost ± $400 p.n.
Class B RVs that are several years old and have some mileage on them should cost ± $150 p.n.
Class B RVs that are new with low mileage should cost ± $300 p.n.
Class C RVs that are several years old and have some mileage on them should cost ± $150 p.n.
Class C RVs that are new with low mileage should cost ± $300 p.n.
Travel Trailers that are several years old and have some mileage on them should cost ± $100 p.n.
Travel Trailers that are new with low mileage should cost ± $175 p.n.
5th Wheels that are several years old and have some mileage on them should cost ± $100 p.n.
5th Wheels that are new with low mileage should cost ± $200 p.n.
Rentals of Privately-Owned RVs
To reduce the cost of owning an RV, several companies are in the business of renting out privately owned RVs when the owner is not using it themselves. Some of these companies insist on setting their own pricing while others are happy to allow the owner to set the price, so it pays to do your homework before taking the first unit offered.
Again, pricing will depend on the type of unit, its age, its condition, the time of year, insurance needs, and taxes.
Most rentals have a reasonably large damage deposit that is refundable when the unit is returned and inspected.
Owners will also list the fees and conditions that they impose. The requirements often include a minimum number of nights for the rental (usually three), the number of miles included for each day’s rental, the maximum number of hours the generator may be run, and any costs for using the owner’s insurance. Other charges could include the use of camping or garden chairs and having the larder stocked for you.
If the renter goes over the daily mileage total or the daily generator total, they will be charged extra for the additional use.
All of these charges can add up very quickly, so a simple spreadsheet may be your best friend when trying to calculate the viability of renting a unit.
Let us take a look at an example from the RVShare site where we rent an RV for a two-week holiday.
This is a Class C Motorhome, a 2008 Fleetwood Icon Mercedes Sprinter Chassis that sleeps six people, rented out of Los Angeles (https://rvshare.com/rvs/details/1087881).
The daily rate is $225 p.n., and the weekly rate is $1,350, which gives you one free day a week. Your basic rental fee for the two weeks is then $2700. Included in this fee is 100 miles per night and 4 hours generator usage per night. Go over these numbers, and it will cost you $0.50 per mile and $4.00 per hour. Insurance is quoted as $29.95 p.n. so this will add another $419.30 to your 14-day trip. Lastly, cleaning is $95, and tax is quoted at 9.5%.
So to add it all up:
Rental for 14 nights 2700.00
Total for two weeks $5162.16
Of that, you will get back $1500 if there is no damage.
This accounts for your basic charges and to this must be added campground fees, gas costs, food, and any other costs for your two-week holiday. While on your trip, pay very close attention to the mileage that you are doing and the generator usage. The fees for going over your contracted rate can add significantly to the overall cost of your hire.
If you are planning a long road trip lasting more than a month, negotiate with the owner to see if the fees can be reduced. Also, if you are thinking of doing considerable mileage, consider arranging for unlimited mileage as this will work out cheaper in the long run.
It is very clear from this simple example that the variations on cost for renting an RV are considerable and only careful calculation and a good idea of where you are going will help you to assess the viability of renting.
Hopefully, this article has given you some food for thought on the costs of buying an RV versus the cost of renting one. We also discussed some of the pitfalls of buying without spending time considering all the implications, and we touched on expenses associated with traveling in an RV, whether owning or renting.
Get it wrong, and it could be one of the worst financial decisions you can ever make. Get it right, and you will have many happy miles of traveling and many lovely holidays.
The moral of the story is do your homework, speak to a financial advisor and buy right.