11 costs you should consider when buying an RV

By ATB Financial 12 August 2020 6 min read

Do you dream of hitting the open road for an extended getaway or dedicating your weekends to camping adventures? With the COVID-19 pandemic keeping Albertans closer to home, many people are exploring the idea of purchasing a recreational vehicle (RV, including motorhomes and trailers). There’s been a jump in demand for all types of RVs—particularly the smaller models popular with first-timers.

But it pays to fuel up your understanding of the true costs and responsibilities of RV ownership before heading down this road. Buying an RV is much more than just a one-time purchase. It’s a luxury item and a long-term lifestyle decision that needs to fit your financial plan.

Where are you headed?

The first thing to figure out is where you’d take an RV, which will have a major impact on your other choices here. If you’re planning on purchasing a trailer to put on a lot, some dealerships will deliver to a lot for a one-time fee, so a towing vehicle may not be required. On the other hand, if you’re planning to camp in different locations or move your RV around seasonally, make sure it’s something you feel comfortable driving. Consider investing in some lessons and possibly a different type of driving license depending on the type of the RV (example, Class A motorhomes).

If you need to tow, you need to know.

If you want an RV that’s mobile and you’re considering a trailer style, you need to get a sense of how much your current vehicle can tow. You may need to add a new vehicle to your RV budget. Think of the saying, “putting the cart before the horse”. Ensuring the size of your truck and the size of your trailer are properly matched can help avoid damage to either asset and will help keep you and other drivers safe.

Learn to walk before you run.

Buying an RV is a major purchase. In some ways, it’s similar to buying a house. When the stakes are this high, it’s important to think carefully about whether RVing is the lifestyle for you. You can choose to rent before you buy, to see if you enjoy the lifestyle it brings before committing to the responsibility of ownership. If you’re new to RVing, consider starting with a smaller model and eventually working your way up to a larger one.

Will you buy new or used?

There are pros and cons to buying new or used. If you’re buying new, you can often depend on the expertise of dealership staff to help you navigate your options and educate you about how an RV works—there’s plenty to learn. That said, just like buying a new car, the value of an RV will decrease once you drive it off the lot.

Keep in mind that many new RVs are only equipped with a 12-month bumper-to-bumper warranty, so an extended warranty might be the way to go for a first-time buyer. Find out what your warranty does and doesn’t include.

If you go the used route, make sure you know what to look for—consider bringing a trusted family member or friend who can help pinpoint any trouble areas or maintenance concerns, as well as helping to ask the right questions to the seller. As a buyer, you may also ask to have the RV mechanically inspected by an RV dealership, much like the inspection you get when you purchase a vehicle.

The upfront cost associated with owning an RV.

Usage costs associated with owning an RV.

Costs you should be prepared for when owning an RV.

To help you decide whether an RV is right for you, we’ve broken down RV ownership into eleven costs you’ll need to keep in mind if you decide to make the leap:

Purchase price: No surprise here—the biggest part of the investment will likely be the RV itself (and the vehicle you’ll use to tow it, if necessary). Depending on the length and features of the RV, prices can range from a few thousand dollars to well over $100,000. An RV is a depreciating asset, so make sure you’re buying in a price range that matches your budget and how often you’ll use it.
Loan and interest charges: How you finance the vehicle is your choice, but it’s likely to be a long-term commitment. Pick a payment schedule you feel comfortable with, whether you’re financing it through a line of credit, dealership financing, personal loan or home equity line of credit. Most people take five to 10 years to pay down their RV loan to help reduce the total amount of interest paid.
Fuel and propane: Depending on the size of your RV, plan to have some money set aside for additional fuel costs to move the vehicle around. Also, most RVs are equipped with a propane stove, fridge, furnace and hot water tank. The tank is generally quite small, but it will need to be checked and refilled regularly.
Insurance: Budget one to three per cent of the value of the unit for annual insurance costs (depending on your driving record).
Registration: Based on the type of RV you’re purchasing, you’ll need to secure annual or one-time registration from a registry agent.
Upkeep and maintenance: Once the RV is no longer under warranty, anticipate putting money aside for regular upkeep and maintenance, such as unexpected repairs. For example, a repair to the hot water tank could run anywhere from $500 to $1,000. Your RV will also require seasonal winterization, which prevents your water lines from freezing during the cold months. This service is available at your local dealership or can be done by the RV owner.
Campground fees: Most provincial campgrounds will charge around $50 per night for an RV. At most campgrounds you can choose which services you need (and pay accordingly): no service, power only, or power, water and sewer.
Storage fees: In the winter, you’ll need somewhere to store your RV. Anticipate paying for monthly storage if you don’t have space at home.
Sanitation fees: You’ll need to dump your grey and black water at least once a week. Plan to spend $10 to $20 each time—and give yourself time to visit the RV dump when planning your trips.
Travel-sized items: Think twice before purchasing economy-sized condiments or meals for your RV. A smaller fridge means you’ll have to be choosy about your groceries, and you may pay a little more for convenience-sized items. You may also need to invest in some bedding, plates, cutlery and kitchen utensils. Try to choose items that are light, as the heavier the load, the more fuel you’ll use to tow them around.
Licensing, training and education: Depending on the RV you want to buy, you might need to get an additional driver’s license and training. A Class 1 license with Air Brakes and training can cost a couple of thousand dollars, so be willing to make the investment to ensure you can drive safely.

An opportunity to disconnect

Many people choose the RV lifestyle as a way to slow down, disconnect and unplug. It can bring a family or friends together to enjoy nature, go for walks, explore and actively participate in the great outdoors.
Others use their RV time to recharge and reinvigorate themselves. For some families, investing in an RV can be less costly than flying away for a holiday every year.

Does the RV life beckon? If you believe it’s a lifestyle that will suit you over the long haul, an RV purchase might be the perfect choice for you. But, it is a big purchase decision, which means you’ll want to consider your current and future financial position and how buying an RV will impact your long-term financial plan.

If you would like to explore whether an RV fits into your financial plan, call 1-800-332-8383 to speak with an advisor or visit your local branch.

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