Buying an RV

A lot of people who are retired are tempted by this. You need to stop and consider some things. The first is: Can you afford it? Some will say, I’m going to use some cash. Remember that if you give up that cash, especially if you’re retired, you’re giving up some protection for yourself. Other people wills say, I’m going to finance it. You need to consider the cost of all of that and taking on that debt.

The other question is: Should you? Will you actually use it? A lot of people think they’re going to use it, only to find that they don’t.

Know that it’s usually not cheaper than a hotel, so don’t fool yourself into thinking that will happen. When you add in the gas, the cost of renting a lot, and the maintenance you’re going to find that you’re paying about the same amount—sometimes more.

Look at the initial cost. There’s a high mark-up on new RVs. That means you really need to negotiate. As soon as you drive that RV off the lot, it’s going to depreciate by about a third. That means you need to consider a used RV. Low mileage is common because, again, a lot of people get into them thinking they’re going to use them, and they never do. There are plenty out there.

Consider the maintenance costs. Do you have room onsite where you’re living to store your RV? Many people have to pay extra storage. There’s insurance. You have to keep them maintained with repairs. There are a lot of things that go into owning an RV.

When it comes to financing, they are treated like a second home. The good news on that is you get a tax deduction on the interest. Now, that’s only for the RV or the camper. If you have a camper and you have a truck to tow it, you don’t get the tax break on the truck.

It is a luxury item, but the interest rates and the time on the loan will be very similar to what you’ll get on a car. That means that it’s going to be heavily dependent on your credit score. The better that score, the better the rate. Bear in mind that when you finance it, because of that depreciation, it’s very common to end up owing more than the value of that RV. Be really careful.

Some alternatives: Consider renting. Certainly renting is good way just to try it out before you buy. A lot of people out there are opting for shared ownership. That way you get more use out of it, and the cost is not as burdensome.

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