Download PDF Version of article

HOW TO BUY AN RV
step six:
Other Costs

Insurance
Check with your insurance agent for an idea of RV insurance rates. Rates are generally significantly lower than those of comparably priced auto insurance rates since RVs usually spend far fewer miles on the road each year. Most RV dealers can also refer you to a reasonable source for RV insurance. For a very rough "guesstimate" of annual insurance rates for planning purposes, multiply 1.5% times the actual selling price. The result is a rough (usually high) idea of annual insurance cost. Your actual cost will vary based on the RV you purchase, your place of residence, your driving record and other factors. It is always best to check with several insurance providers for more accurate cost data. A few sources to contact are:

Maintenance
All RVs require maintenance. Don't let any salesperson convince you otherwise. This is one of the most important things you must do to protect the value of your RV. Demand a suggested maintenance schedule. Estimate the cost per year and budget for it. Then get it done!

Do not buy any RV expecting no maintenance costs!

Maintenance costs will usually fall between 1% and 2% of the selling price and will increase as the unit ages. Lower-price RVs will tend to have higher costs that may exceed 2%. Glitz RV products can run double or even triple these expense estimates. That's another great reason to spend a little more up front to get more value over the long haul.

Depreciation
RVs are depreciating assets. They do not increase in value. Initial depreciation the first full model year is somewhere in the 20% range figured from the manufacturer's suggested retail price (MSRP) to the used retail price. After that you can expect a 3% to 5% drop, per year, at retail.

There are two flaws in the common depreciation estimates. First, these figures are inflated because they are based on the MSRP--and nobody pays MSRP sticker price. That means that from the actual purchase price to used retail, the depreciation is actually more like 10% or less. The second flaw is that it is difficult to sell your RV at retail price. Dealers buy and trade at wholesale and sell at retail. Unless you sell your RV privately and are good at it, chances are you will get less than retail.

Anytime you change RVs (new or used) you can commonly expect depreciation of 20% to 25%. Plan on it. This is one of the biggest reasons why you want to do it right the first time and not have to take a big loss just to correct a mistake caused by buying the wrong RV. Buying the right RV for your mission is the best way to keep depreciation to a minimum. Depreciation takes a much smaller bite when it's spread over many years of fun-filled RV adventure.

Many people think buying a used RV avoids the initial drop in value. This is not usually true. Used RVs suffer a similar initial drop in value unless you buy at wholesale (hard to do) or sell at retail (also hard to do). In fact many people fail to do proper research and pay too much and then suffer huge depreciation losses, losing all of the above market value amount plus the normal depreciation.

Be careful about adding value for extra options or features not found on the typical RV. While they may be nice to have, they add value only for buyers who care about them. As an example, Satellite TV may be a big feature to me but have no value to the majority of potential used RV buyers. That value is "consumed" during my ownership period unless I am willing to wait for a buyer that truly cares and wants that specific feature. I call such options or features consumables. They are for the RV owner's own comfort and convenience while they own the RV. These options or features become "tie-breakers" for most buyers. They won't pay extra for them, but they will buy one "with" over another "without"-all else being equal. Holding out for a higher price for these added features may work, but the universe of potential buyers is significantly reduced and sellers must be prepared to wait longer to sell the RV.

Remember: the depreciation on the amount over the market value you pay for any RV is 100%. It is essential to know the market and the condition of the RV in order to avoid paying too much and thereby lose much more in depreciation.

Service Availability
You will need service! RVs are man-made. They are very complex. Just imagine putting your house on wheels and driving across America's highways. Problems will occur. Be sure you consider where you will get service and where it will be available. Service capacity is strained in many parts of the country, especially in prime season. Be sure you have a place to go for service before you buy. Contrary to common perception, RV dealers are NOT required to provide warranty service for owners who bought their RV elsewhere. Even if they do provide the service, they will have no "goodwill" money available to cover items not covered by the specifics of the manufacturers warranty (the warranty rarely covers all the costs).

It is always best to do business where you will get service. Your selling dealer has a lot more invested in your satisfaction and a lot more to lose if you're not happy.   A disturbing trend today is the number of dealers selling far out of their area, selling at shows far from their service support reach, or simply not servicing what they sell.   Some even promise service support by telling buyers they have service teams on the road.   What they don't tell them is the team is one guy with 4 states to cover.   Be sure you understand the realities of the service relationship you are buying.   Do not allow yourself to become an "orphaned" RV owner with no real service relationship.   Many RV dealers, especially many high-volume sellers thrive on selling to folks they know they will never service.   If you choose to buy far from home be prepared to travel back to the selling dealer for most of your service needs.    If you're not willing to do that, don't be surprised to find yourself struggling to get help when you need it.   Few service centers have the capacity to handle all the orphaned RV owners in the market today.   

Motorhome Service Availability
Motorhome buyers should also keep in mind the RV dealer, with few exceptions, is not the chassis warranty service center. Be sure you know where and how chassis service will be performed. Transport to the service center is usually your responsibility. Consider chassis service as a factor in your choice of chassis for your own personal motorhome.

Park Service Availability
If you plan on parking your RV on a site and do not plan on towing it, be aware that warranty programs do not cover service away from the dealership. You will likely be responsible for the charges to get service personnel to your site. The actual warranty repairs will likely be covered, but you will be expected to pay for the service call. In some cases, a repair may require your RV to be returned to the RV dealer's facility to complete the repair properly. You would be responsible for the cost of transportation to the dealership service center and back again.

Consider the costs involved. Get an idea of service call fees before you make your decision. Remember that you saved the expense of buying the required tow vehicle and towing equipment. Your tow setup savings come with a trade off in the form of higher service costs.  

How Important Is RV Service?
Have you ever had any problem with your home or any of the homes you've ever owned?

Have you ever had any problem with your car or any of the cars you've ever owned?

Have you ever had any problem with your appliances or any of the appliances you've ever owned?

Of course you have. So why do you want to bet on never having a problem with your RV? Chances are you will have a problem with your RV at some time or another. Plan on it. Prepare for it. Make warranty, service, and support part of your decision-making process.

No product is any better than the dealer you buy it from!

Shop and compare the whole package. Compare facilities, experience, training & technical certifications. Know how a problem will be handled when it does occur. Be confident that you will get the support you need before you buy.

Fuel Costs
With the price of fuel getting so much attention lately, many people think that fuel might out-price them out of enjoying their RV. Well, here is just a quick look at the costs of fuel and what price increases mean to your wallet.

Fuel Cost Comparison
How much does gas really cost you - even as the prices continue to climb?

Let's consider this:
Assume typical use in one year is 5,000 miles.
Typical mileage is 5-10 miles per gallon.

At 10 mpg x 5,000 miles = 500 gal.

$3.00/gal. x 500 = $1,500

$3.50/gal. x 500 = $1,750

$4.00/gal. x 500 = $2,000

That makes a difference of $500! That averages out to about $40 per month!

At 5 mpg x 5,000 miles = 1,000 gal.

$3.00/gal. x 1,000 = $3,000

$3.50/gal. x 1,000 = $3,500

$4.00/gal. x 1,000 = $4,000

That makes a difference of $1,000! That averages out to about $80 per month!

For a shorter trip:

200 miles at 10 miles per gallon with gas costing an extra $1.00 - you are spending $20 more for your trip!

Are you going to stay home because of $20?