Buying an RV is a complex emotional decision. The decision has financial, technical and personal preference elements. What type of RV do I want? How big should it be? How can I afford to buy it? What do I want it to look like? In addition, the answers to these and other questions may not be the same for all those involved in the buying decision. Some buyers focus on the technical aspects and others focus on appearance aspects while still others may focus on the financial aspects. I may focus carefully on the technical aspects of an RV. These are important to my spouse but she may focus more carefully on the “livability” of an RV. Reaching a consensus among all the players in the purchase decision is difficult at best, but an important aspect of a happy outcome

This paper focuses on quantifying the financial cost of owning an RV versus renting. Many of the other elements of the buying decision are covered in detail elsewhere on this web site and on other web sites as well. I encourage you to investigate as many of these resources as possible prior to committing to any purchase of an RV.

Renting an RV as an alternative to buying is not high on the list of options for most who are considering this form of travel and vacation. Some buyers want the sense of ownership that comes with buying an RV (even if the bank is the real owner). Some buyers want to make modifications that make the vehicle uniquely theirs. Others do not want to have the hassle of planning ahead far enough to guarantee a reservation is available when they want to go. Some look at the RV as an investment and tax saver. (It is unlikely that purchasing an RV is either of these but that is not the topic of this paper.)

To make this analysis easier to compare to other analyses on this website, my basic RV assumptions are similar to those used in Bob Gummersall’s paper on buying a new or used RV. The costs reflected in this analysis are somewhat higher due to increases in costs in the time since Bob wrote his paper. Additional data was gleaned from the analysis, “Family Vacation Cost Comparison.” This is a study funded by the Recreational Vehicle Industry Association (RVIA). Costs associated with both purchase and rental costs used in this study are equal to or greater than the costs used in the two referenced studies.

The analysis in this paper attempts to address all of the financial costs associated with owning and renting an RV. These include the purchase cost, rental costs, fuel, campground, storage, insurance, maintenance, depreciation and cost of money costs. There is a simplifying assumption inherent in the analysis. All of the figures are in today's dollars and should more properly be discounted in future years. The analysis also does not include the cost of your personal time associated with owning an RV. The basic question asked is – Will you use your RV enough to make it economically worthwhile to purchase an RV rather than rent?

The analysis assumptions include:

o Buying a three year old used RV as suggested in Bob Gummersall’s paper.
o All travel is the same for both the purchased and rented RV
o Renting an RV from an RV rental company not an individual.
o A medium class A or class C RV (30’-32’) is purchased or rented.
o The RV is driven one of three use-days for an average of 100 miles per day.
o Dry camping or parking in a “free” campground (a relative’s driveway, Wal-Mart parking lot, etc) is excluded.
o The cost of food is excluded since this cost would be the same in all cases.
o Campground costs are $25/night.
o Fuel costs are $3.00/gallon.
o The RV rental fee is $215/night for a 32’ Class A motorhome.
o Interest on an RV loan is 6%.
o Interest on savings is 5%.

The graph above summarizes the analysis . Four lines are shown: a black line of short dots for the cost per day for an RV purchased on credit; a red line of long dashes for the cost per day of an RV purchased outright; a solid blue single value line for the cost per day of camping in a rental RV; and, a vertical white dotted line indicating the average number of days the typical RV owner uses their RV. Based on the most recent available data, this typical value is 27 days per year. Note that if you plan to use your RV the typical number of days per year, and you purchase your three-year-old RV on credit, you will pay a premium of $200 more per day for the privilege of ownership versus renting! To make ownership financially worthwhile you need to use your RV about 40 days per year if you buy the RV outright or about 50 days per year if you buy the RV on credit. On the other hand for those who live full-time in their RV the costs per day can be well under $100.

There is an understandable concern in the minds of many hopeful RV owners about the cost of fuel. RVs require significantly more fuel per mile than most passenger vehicles. Automotive manufacturers have improved fuel consumption for an RV chassis from the single digits in older vehicles to some current models that provide 20 miles to the gallon. However, the “breakeven point” between owning and renting is insensitive to the cost of fuel since fuel is a cost whether renting or owning. Even a doubling or trebling of the fuel cost does not materially affect the results shown above.

This analysis has been based on a medium class A or C motorhome (30’ – 32’). In the rapidly changing recreational vehicle market place you can now rent trailers from at least two national RV rental companies. Unfortunately there isn’t adequate data for trailer rentals to duplicate this study with this limited data set.

Safe Travels

Dave
Systems Analyst
RVLifer@earthlink.net

BACK

MAIN MENU