The Yearly Costs Of Owning An RV (Part 1 of 2)

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October 7, 2009


There are a number of items that must be considered when determining the yearly cost of buying a new RV. We hear so much about fuel costs, whether it is a motorized or a tow vehicle.  But, fuel really is peanuts in most cases.  Likewise, maintenance and repairs, while not necessarily cheap, are relatively small in the big picture.  The financial purchase, whether it is a cash deal or involves a finance contract, will almost certainly out weigh both fuel and repair costs.  Then of course there is insurance, licensing, and taxes, if applicable.

But, none of these expenses are the largest cost. In fact, in many cases, the greatest ownership expense may well exceed the total of all of them.  That cost is annual depreciation, or the depleting value of the vehicle over time.  This has even more impact as it accumulates over time and becomes due upon trade-in or at time of selling.

So let’s look at each and see how they compare.

Fuel Costs: Towing a heavy trailer or powering a self propelled RV requires a lot of energy.  Depending on the weight and aerodynamics of the unit, this energy need may be very high.  This energy is fed by fuel, either gasoline or diesel.  Fuel mileage figures can range from as low as 4.5 to upwards of 14 M.P.G.   Based on the distance driven yearly by the average RV owner this would translate to about 322 to 1,000 gallons.  Assuming a $2.50 a gallon price, the costs would be in the area of $805 to $2,500.

Maintenance and Repairs: A zero dollar repair cost should be realized during at least the first year or as long as the vehicle is under full warranty.  After this period the costs can easily vary from nothing to several hundred dollars per year.  Repair and component replacement generally should fall within the fore mentioned range for several years, however this may raise substantially when the vehicle is in its fifth to seventh year of service.  Maintenance, on the other hand, costs from day one.  Generally, a motorized vehicle will require some additional service during the first year, such as an earlier than normal oil change, transmission filter replacement, etc.  This would probably average $200 to $700 per year with the occasional spike for an air intake filter, air dryer filter, etc.  The replacements of tires and batteries are considered maintenance items providing they do not fail abruptly.  Both normally need replacing in the five to seven year window.  This need for replacement is due to aging and sidewall cracking as far as the tires are concerned and the batteries becoming unable to perform as they should.

Purchase Price: Whether a purchase is made involving a financial loan or handled in cash, there is a yearly cost.  The cost, if financing, is the interest paid during the year that did not go towards the principle, or outstanding balance.  Additionally, there may be other one-time charges like an application fee, administration charge, etc.  The interest rate and total amount borrowed determines the amount that this money will cost you per year.   Cash purchases do not involve paying out interest, but in contrast, are about loss of income interest.  Basically, if that purchase was not made that money could be earning interest in a bank GIC or similar investment instrument.

Insurance, Licensing & Taxes: These expenses will vary depending on where you live and the cost and type of your RV.  To give you an idea how greatly these can be skewed by location, two identical Newmar Essex coaches, one in the U.S. and one in Canada.  The U.S. unit’s premium was about $1,600 per year while the Canadian look-a-like paid around $5,500.  Taxes and licensing leave little option short of registering your unit out of state.  This has been done in the past.  The majority of those that registered their RV’s out of state elect Montana.  Generally this involves forming an L.L.C. in that state to facilitate the owning body.  Legal advice is recommended should you wish to pursue this avenue.  There may be issues you need to be aware of or other possible limitation or restrictions.

Oddly enough, regardless of the type, whether towed of motorized, all RV’s conform to a similar age to percentage rate deprecation.  This also holds true for all price points from entry level to high line.  The following is a depreciation schedule that is experienced in the market place today.

Year Depreciation
1* 15%*
2 10%
3 6%
4 6%
5 6%
6 5%
7 5%
8 4%
9 4%
10 3%
11 3%
12 2%
  • Note:  The depreciation shown in year one is adjusted to reflect the typical dealer discounts of plus 20% from list.   If it is calculated based on the suggested list price, the first year depreciation would be near 35%.

Remember, this is only a guide line, in many cases the real purchase price may be difficult to determine if a trade was involved.  Therefore to get an approximate depreciated value of an RV, it may be easier to calculate the depreciation from the original suggested list price.  Using this method, just substitute 35% for year one.  Now, keep in mind, values may vary higher or lower based on many factors.  These factors include, but are not limited to, popularity of the make/model, current market demand, vehicle condition, geographic sales area, economic conditions, and much more.

Well, do the math.  No one said the cost of owning an RV was cheap.  Next week, we will examine practical and theoretical ways that may reduce some of these costs including the high rate of normal depreciation.

Until Next Week     –     Lug_Nut    –     Peter Mercer

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  78. Dee Dee

    Wow, I was considering a 24′ class C, but now I am unsure???? thought I could re-ignite the camping now that my kids are early 20’s and love it, but I am too old too sleep on an air mattress, let me re-phrase that, I won’t sleep on the ground anymore!

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  83. Tom

    I am considering buying a 2008 Fleetwood Expedition 38v does anyone have any comments good/bad about this vehicle?

  84. 5th_wheel

    You’re 100% right about different types requiring different maintenance. We may sell our 5th wheel and get a TC instead for this very reason. Not to mention the RV makers don’t seem to care about mouse proofing(that’s another topic) and that can be a major source of damage. A TC seems more manageable and easier to seal up. It’s disgraceful how many mice/rat access point are in the so-called sealed underbelly.

  85. 5th_wheel, Different RV types and sizes vary the cost somewhat. While not all require caulking or bearing packing, they may need other items. Large DP’s run wet hubs requiring no packing. As far as sealing roofs are concerned, I’ve never had an issue over the years ever requiring such work. I fell once to a dealer insisting it sould be done. Two days after that I had a major leak. If it is not broken don’t fix it. Thanks for your valued imput.

  86. Liz, You are probably correct. The HST is based on a privince having a provincial sales tax. Alberta rules! Thanks for getting back on that.

  87. 5th_wheel

    That figure for maintenance is really low. Unless you do your own work. Caulking the regular cracking Dicor alone is $150 per year. A leak test at a shop is $99. Then you have to repack bearings etc. It’s looking like $500 per year at least for maintenance.

  88. Liz

    Hi Lug_Nut:
    You’re right, we still have no Provincial Sales Tax in Alberta.
    But, as do the rest of Canadians, we pay the Goods and services tax (GST). In some provinces, GST has been blended with the PST and is called harmonized sales tax.
    Since no PST exists in Alberta, and I could find no reference to it, for Alberta, in our CCRA web-site, I have to assume that the HST will not apply, and we will continue to be exempt from the tax even after 2010.

  89. Liz, I know in alberta no provincial taxes are applicable, but what about GST? And what will be payable after June 2010 with the introduction of HST? Thanks for your input.

  90. Liz

    Hi all: Are you folks in the States paying taxes on your RV?
    I’m from Alberta, Canada. Yes, we do only pay taxes on real estate (that is land and home) but do not pay taxes on our RV’s, boats etc. Also we buy our licence plate once and pay a one time registration fee, which is good for the life of the unit or until it is sold (at which time the new owner pays his registration fee).

  91. Hi John, Good question on the depreciation which I should have outlined better. The 2nd year on is based on the depreciated value of the previous year, or the residual value. That’s why used rigs can offer good value. Thanks for the great question and your valued input.

  92. John

    Hi Lug_Nut,
    Good article. Insurance on a coach in variuos parts Canada can vary.
    In British Columbia an Essex coach will cost you $1600 – $1800 per year.
    I’ll let you know what the licensing fee is when I register my new coach later
    this year, but I estimate around $250.
    Does the chart depreciate on the yearly residual value of the coach or on total cost (MSRP or whatever was paid for the coach) at the time of purchase?


  93. Jenny, I’m glad you enjoyed the article and that you found it of help. Thank you for taking the time to participate on this topic. Good feedback.

  94. Thanks for the great article. I think that these questions are definitely ones that new RVer’s and/or new fulltime RVer’s want to know before taking the plunge and buying a new rig.

  95. Jack Fanning, Wow, I can’t believe Canada’s taxes are cheaper than anything in the free world. But, Canada only pays on real estate, as far as assets are concerned. Thanks for your very fitting comment and input.

  96. Jack Fanning

    The personal property taxes on an RV in North Carolina make Canada look like a good deal.

  97. Fred Brandeberry, SR, Yes, Florida has many advantages. Thanks for the great input.

  98. Hi Guys and Gals:
    We find, after full timing for two years in 1965/66 and now since 2001 – these are the RV costs easiest to control:

    We choose Florida as our state of residence.
    No personal property tax, no vehicle inspection, no state income tax, $95 dollars tags for a motorhome and Jeep, Inexpensive drivers license all renewable online.
    Florida accepts personal checks, they do have a .05% capital gains tax over one million dollars.

    Happy Camping,
    Fred b.

  99. Drew, No question, with the cost of purchasing and owning an RV, you have to enjoy it, and many certainly do. Thank you for participating in this topic.

  100. Drew

    I guess if you like what you have than stick with it, if not- it’s a waste of time and money. In my case, I like it.


  101. S.C. Okie, I’m with you on that one. If you can get taxes down to 1 or 2 perrcent, you have my vote. Thanks for your input.

  102. S.C. Okie

    Let’s face it! The tax people are gonna get their dues whether we like it or not! Perhaps we should vote to do completely away with taxes, or get them down to a 1 or 2 percent level on everything! That would be a vast improvement AND less the burden on everyone, especially those over 65 on limited income! 🙂

  103. Chuck Strickler, I appreciate your input, but advertising is not permitted.

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