THE REAL AFFECT OF FUEL COST
-- WITHOUT EMOTION
By Bob Gummersall
Chief Technical Editor
[01/2014 Ed Note: While this article was written at a time that fuel prices were well below current levels, the point of the article is that even at $5 per gallon, fuel cost is simply not the major factor in the overall cost of RVing. Interesting observations in light of conditions at the time this was first published...and the teaching point is as vaid today as when this article was first written]
INTRODUCTION We all know that fuel costs are on a strong upward swing. We know that fuel costs in 1970 averaged $.50 per gallon, in 1985 they crossed the $1.00 per gallon mark and in 2005 they are climbing through $2.30 on their way to who knows where. When I sold gas at my father’s service station in 1950 gas prices were about $.28 cents per gallon, but you could also buy a new tire for around $10. Motor homes today get fuel economy in the range or 7 to 14 mpg depending on lots of things, not the least to say the reputation of the person reporting the performance. I have documented fuel economy testing in a downloadable file fueleconomy.doc with Dick Lucas that proves that slowing down is the best way to get better mileage. Now we know that we will all take this advice and slow down 10 miles per hour to get at least 1 mile per gallon better fuel economy. I think that most of us won’t slow down so we need to read further.
PLAYING THE WHAT IF GAME Understanding the true cost of living the lifestyle of travel in a motor home requires considering many factors. We are all quick to think about miles per gallon when we think of the cost of motor home travel. In all the cases I ran, fuel cost caused the least affect on total cost of travel in a motor home.
CASE 1. The case provided in the base template is a typical motor home owner. It compares the cost of using a 4 year old motor home with traveling the same amount in a four year passenger vehicle staying in motels and eating in restaurants. It shows that at current fuel price levels using a motor home to travel 8000 miles staying 100 nights away from home has a cost of $2.80 cents per mile and $224 per day. The same travel using a passenger vehicle, staying in motels and eating out is $2.32 cents per mile and $186 per day. The raising the fuel cost to $5 per gallon raises the numbers to $3.07/$246 and $2.42/$195 respectively. The Motor home cost went up $.27 or 10% per mile when the fuel went up 80%. The car/motel/café cost went up $.10 or 4% when the fuel when up 85%.
CASE 2. It is always interesting to me to look at the full time use of a motorhome as a primary residence, really enjoying the RV Lifestyle to the fullest. So I plugged in the use of a 5 year old luxury diesel that cost $200,000 when new with appropriate numbers for insurance, cost of money, 300 days in a campground and maintenance cost. At $2.30 per gallon of fuel the total yearly cost was $30,900 and at 13000 miles the cost per mile was $2.38 but the total daily cost was only $85.00. This buys you a fabulous new view every few days, visits with family and friends as desired, good weather (except California this last winter) and the freedom that only rv living provides. Now raise the cost of fuel 117% to $5.00 and the yearly cost goes up $4,000 or 13%. Cost of fuel again has only a small affect on total cost of use. In my opinion it is not appropriate to compare this case with traveling 365 day in a car using motels and restaurants. This case could only be compared with the cost of living in multiple resorts and traveling between them by car. That spread sheet is one that one of you might create and contribute.
CASE 3. This case is at the other extreme as I usually do this kind of boundary analysis comparing cases are the opposite end of things. This case is one that might represent someone trying to enjoy Rving at the least cost, staying in Member Campgrounds, Flying Js, Slab City or on BLM Land in Quartzite in a vintage converted bus. I have lots of friends that travel this way. For the values, I assume that this conversion cost $125,000 15 years ago, Cost of Service at $2000 and only 80 days in campgrounds. The yearly cost is $14,910, per mile cost $1.15 and cost per day $41. Raise the price of fuel to $5 and those numbers go to $19,934, $1.53 and $55. A 117% increase in fuel cost only raised ownership cost by 34%. This is the case that should be most affected by rising fuel costs, but still other factors are dominant. There are not too many ways to live the freedom of RV lifestyle at this cost. It is hard to find a place to rent where the total cost, i.e. rent, insurance and utilities, is less than $15,000 per year and you would look out on a busy street.
CASE 4. This case would be typical of a working owner, able to travel only a few weeks per year. I have assumed that this would be an older Winnebago or similar motorhome and a family going on Camping Trips. I think that this case shows why so many younger people are turning away from expensive hotel/resorts towards the freedom and flexibility of motorhoming, not to speak of the home cooking, your own beds and only unpacking once. This case uses 9 mpg, 6000 miles, 45 days camping and a 6 year old rig that cost $95,000 new. The cost of comparable food was $50 differential and the cost per night in a resort was $125. So yearly cost $11,587, per mile $1.93, daily cost $257 compared to the car/hotel/café case of $12,938, $1.62 and $288 respectively. Now double the cost of fuel to $5 and the two cases go to $13.253, $2.21 and $295 for the motorhome and $13,772, $1.72 and $306 for the car/motel/café. The 100% rise in fuel cost was in increase of 14% for the motorhome and 6% for the car/hotel/café.
CONCLUSION A person without emotion will have to conclude that fuel prices rising 100% or more, has a 6% to 30% affect on the total cost of the motorhome lifestyle. SO WHAT IS THE BIG DEAL?