Monday, October 12, 2009

RVing on a Budget

 Our current lashup is this 17-foot Casita, towed behind a BMW X5.  It is small, economical, and easy to tow.  However, you don't have to go this small to RV on a budget! 

UPDATE:  Read this article (in .pdf format) by a journalist who covered the RV business.  He became disillusioned after he actually bought an RV and realized how poorly they are put together and how the financing can bankrupt many owners.   He gives the industry 20 years, tops, before a massive reshuffling occurs.  Maybe a bit dramatic, but who knows?

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A friend of mine bought an RV this year, and asked our advice about RVs in general. As charter life members of the Good Sam Club (the largest RV organization), we tried to give helpful advice, with trepidation. Not everyone is cut out for RVing, and you can give advice to some folks, and it can backfire in a big way.

But she just returned from spending two months this summer living in the RV and she says she loves it. So we are very happy it worked out for her. And she did all the right things in selecting and buying an RV. She did the research and educated herself about them before buying. In a way, it is like my article about car buying. If you do the research, figure out what you really need, and don't get sidetracked by emotions, you can come out ahead.

Now the title of this article is RVing on a budget not tips on how to buy a big-bus motorhome for less. RVing can be a good deal and a money-saver. But like any other hobby, if you take it too far, it ends up costing more money that it is worth. For what some people pay for RV's, you could afford to stay in first class hotels the rest of your life.

1. Motorhomes - Forgetaboutit!

The first question in buying an RV is whether to buy a trailer or a motorhome. The answer is trailer. PERIOD.

Motorhomes are nice and all, but as a motorized vehicle, they depreciate like a car. Expect to lose 10-20% in value the moment you drive it off the lot, and about 50% in value after five years. Why this is so is a conundrum. But it applies to cars as well. No matter how well you take care of your car, no one wants to pay much for a 10-year-old car, even if it is showroom condition.

And that is one big problem with motorhomes. As they depreciate rapidly, and as they are financed on 7 or even 10 year notes, it is all too possible to be "upside down" on a motorhome in a real hurry. Once you owe more than it is worth, it can be impossible to get rid of.

Price is the issue. Motorhomes cost more than trailers - a lot more. They are motor vehicles, and as such, have to be powered and comply with all the safety standards of motor vehicles.    Each one has a truck chassis underneath, and those are not cheap!

Motorhomes come in all price ranges, from $50,000 bare bones Class "C" coaches, to million-dollar custom made Bus motorhomes. They all depreciate like mad and they are all overpriced - for what you get.

For example, take a typical $100,000 motorhome. This would be a fairly cheap model, believe it or not. A travel trailer with equivalent furnishings and fixtures would cost on the order of $30,000 or so. Throw in another $30,000 for a pickup truck to tow it, and the cost of trailering is only 60% of motorhoming.

And the same analysis applies to used coaches as well. Yes, you can buy a used motorhome pretty cheaply, but a used trailer and pickup truck is still even cheaper. And a trailer depreciates far more slowly than a motorhome. If kept in good shape, even an older trailer holds its value.

So why do people buy motorhomes? I call it the 70 m.p.h. cheese sandwich phenomenon. People have this fantasy that as they drive down the road, the spouse will be cooking a meal and serving them a toasted cheese sandwich from the galley. Or they can use the bathroom (provided they are not driving) or sleep or shower, or whatever.

The problem with these fantasy scenarios is that it is illegal to do most of them, unsafe (manufacturers would not recommend such things) and really not all that great a deal. Once you've had the 70 m.p.h. cheese sandwich, you wonder why you spend $100,000 more than you should have. It is an expensive sandwich.

The other problem is that most motorhomes today have "slide-outs" (more on this later) and when driving, they are usually slid IN, and thus restrict access to the coach. As a result, the coach is not very comfortable to ride in going down the road.

Motorhome seats are not very comfortable, either. Flexsteel seats kill your back, and most motorhome furniture is not very comfortable for a long drive. So the idea that a motorhome is "comfortable" is an illusion.

As a motorized vehicle, motorhomes require more maintenance. And since most RVs "sit" for days, weeks, and even years, the maintenance can be a problem. Engines and transmissions are made to be run, not to sit, and long periods of inaction is never good. Plus, you are paying a lot of money for that engine and transmission and not using it. Like fresh fruit, it goes to waste.

On motorhome sites and in motorhome magazines, debates abound about diesel versus gas. It really is irrelevant. Most coaches are scrapped with only 70,000 miles on the chassis (or they become de-facto camps or the like). The longevity of a diesel engine is really meaningless for such applications. And diesels hate to sit even more than gas engines.

Weight is another factor. A motor coach may weigh 30,000 lbs or more. That's 15 tons. Think about that the next time you drive over a bridge that says "weight limit, 10 tons". Since you'll need a way to get around once you get where you are going, you'll need to tow a car. Throw in another 4,000 to 5,000 lbs for that, and remember you can't back up at all, when towing a car. In contrast, even a large trailer may weigh 10,000 lbs or less. And a pickup truck may weigh 5,000 lbs. It's a lot less weight to carry around, to be sure.

Bear in mind, too, that your motor coach needs insurance, just like any other motor vehicle. A trailer, on the other hand, is covered by the tow vehicle insurance for liability, and collision and comp (if needed) for a trailer is cheap.

Too expensive, too much depreciation, too much chance of being upside down, not comfortable, too heavy, and more maintenance. The choice is simple for the budget RVer - trailering.

2. To Slide or Not To Slide?

OK, so motorhomes are just not for the budget-minded RV'er. Trailering can cost half as much or less. How big a unit do you get? And do you need slide-outs or what?

Slide-outs are all the rage for both motorhomes and trailers. If you are on a budget, I would suggest taking a pass on them for several reasons.

First, they add to the weight of the trailer and also to the complexity. You end up with more leaks, more flex, and more wear on the chassis. Yes, they provide a nice appearance of more space. But that is an emotional reason for buying them, not a practical one.

It is funny, but even small trailers (like 20 feet) have slide-outs. To me this seems silly. If you want more space, why not buy a longer trailer (25 feet) without a slide? It would provide more space, cost less, weigh less, be easier to set up and have fewer problems.

Since slide-outs are all the rage, trailers without them can be had more cheaply, particularly used ones. Since the great herd of idiots has to have a slide (so they can impress the rest of the herd), many dealers find that a slide-less trailer is a hard sell - which means a greater bargain for the astute buyer.

3. What size to get?

Many folks buy RVs based on the interior. They go to an RV show and enter an RV on display and Oooh and Aaaah over the interior features. They forget it is a vehicle and it needs to go down the road. 35 feet doesn't sound like a lot until you try to tow it.

How big an RV to get is a function of your comfort level, both in terms of driving and living, and also your plans. If you want to drive to Alaska and see all of the lower 48 States, then a 40-foot trailer may not be practical. On the other hand, many folks would find themselves cramped in a 10 foot pop-up after a week or two.

For occasional weekend camping, a small trailer or pop-up can be cheap, easy to store, and easy to tow, even with a small pickup or SUV. But they are not practical for more than a week or two of camping, unless you are hardy.

By the way, if you are not hardy, just forget about RVing entirely. If the wife says "I like room service in a hotel better than sitting around the campfire" then buying an RV could be a costly mistake for you. The wife will use every means in her disposal to sabotage the whole deal to get what she wanted all along.  Save yourself the grief, and don't try to "convert" a non-camper into a camper!

If you plan on staying a month or two (or three or more) in the same place, a larger model could be the answer. Park Models are special RVs meant to be kept in one place (they are not to be confused with "Mobile Homes" or manufactured housing, though). Many folks find that a large trailer can be an inexpensive retirement home or vacation home. Some RV parks provide reduced storage rates. You leave the trailer there, and before you arrive, the park manager tows it into place on a site, connects it up and its ready to go - better than a condo!

Or you could tow it once a year South for the Winter and then back North for the Summer (as a snowbird). Since it moves only once a year, on major highways, the size is not such a big deal.

But beware. You have to have a sufficiently large tow vehicle to move a trailer. Towing with too small a vehicle can result in a "tail wagging the dog" situation and even result in an accident, sometimes fatal. A rig that is not balanced can be hard to handle and sway out of control.

For this reason, many folks prefer a 5th wheel for a larger trailer, as they tend to sway a lot less (or not at all) and are easier to handle. But any trailer can be safely towed, if it is coupled to the appropriately sized tow vehicle.

4. Our Experiences

We started RVing with an 18 foot travel trailer and a small Toyota pickup. It was a nice trailer, but even at that small size, too large for the pickup. a midsize or small fullsize pickup (F150) would have been a better choice. It was a nice trailer, we kept it for four years and sold it for $4000 - exactly what we paid for it. As I said, a well-cared for trailer doesn't depreciate much.

We sold that and bought a 27 foot 5th wheel, which we towed with an F-150 with a towing package. It towed like a dream and we went coast-to-coast in it and to Florida several times. We kept it four years and sold it for $6500, or $500 less than we paid for it. Trailers hold their value.

We bought a motorhome, a small one at 21 feet, for $22,000. We kept it a few years, drove it to Mexico and back, and sold it for $12,000. See what I mean about depreciation?

We presently have a Casita (17 foot fiberglass trailer) which cost $8500. These tend to hold their value. They are easy to tow with a small SUV (BMW X5) and are great for short trips of a week or two.  After living on a boat for weeks at a time in the Keys, we got used to living in small spaces and find this quite comfortable.  Some folks might find it a bit too small.  But we spend time outdoors - this is camping, after all, not inside an RV watching TeeVee, which so many do!

My friend just bought a 25 foot travel trailer with no slides. Thanks to the downturn in the economy (RV companies are going bust, as are the dealers) she was able to buy it new for about $15,000. Hooked to a late model used Toyota Tundra (at about the same price) it made for a good lashup, and she reports that it was a comfortable summer vacation home for two months.

Frankly, I think my friend's rig is the ideal situation for an RVer on a budget. It is easy to handle, roomy enough to live in for weeks at a time, inexpensive to buy, slow to depreciate, and simple to maintain. No slides to go wrong, easy to set up, and easy for the novice to learn.

Will we get another RV - perhaps larger, in the future?  Perhaps, but then again, perhaps not.  While a small RV can be very cost-effective, the price of fuel, storage of the RV, and the wear and tear on the two vehicle (not to mention the lousy gas mileage most tow vehicles get, even unloaded) can add up to a pretty staggering bill.  It may be cheaper to rent a vacation home for a week or two than to "camp" in an RV.

Whatever it is we decided to do, you can be sure we will do the math first!  There is no point in locking yourself in to a major investment and possible major hit to your net worth, only to end up spending more per night than the cost of a luxury hotel, resort, or Bed and Breakfast.  Do the math before buying.  For any RV over $50,000, often the numbers just don't add up!

5. Where do you stay?

RVing on a budget makes no sense if you are paying $70 a night to say in a "Motor Coach Resort". And yet people do it, more for snob appeal than anything else. Frankly, the idea of "high end" RVing is a joke. It is like the term "luxury trailer park" - an oxymoron.

There are cheap places to stay, or even free places. When traveling, many RVers will park for the night in a Flying J truck stop or a Wal-Mart parking lot. If you are just stopping for the night, it is a waste to spend $20 for a campsite you will never use, and oftentimes means driving 20 miles out of your way.

Note that parking on the street or in a highway rest stop may be illegal and perhaps not safe. In Europe and certain parts of the US, it is considered more traditional to just pull over and camp somewhere. But increasingly, it is harder to do this, as local regulations prohibit overnight parking. In many cases, however, you can often park at places if you just ask.

For example, we parked overnight at a winery in the Napa valley, so we could take a 6AM balloon trip. It was quite a sight to wake up in the parking lot surrounded by inflating balloons! And it was convenient, too.

State Parks, National Parks, County Parks, and Army Corps of Engineers parks are inexpensive places to go, and often provide the best "camping" experiences, if you like the great outdoors. These are our first choices for places to stay. Some, like the Army Corps, even offer free camping or reduced rates out of season.

If you have a friend with a lot of land, sometimes staying there can be a cheap (or free) vacation. I installed a 30 amp camper plug by my barn, and some friends have come to stay for days at a time. It is a lot less hassle than changing the sheets in the guest room.

Commercial RV parks are often our last resort, no pun intended. For seasonal campers, these can be a good deal, if they have monthly rates. But for overnight or shorter stays, they are often the most expensive option, sometimes rivaling a cheap motel in nightly cost.

But in many tourist areas, they may be the only choice, and even at their higher rates, still a cheaper option than a local hotel. Believe it or not, there are RV parks even near major cities - so you can visit many tourist destinations and still stay in your RV for far less than a hotel or motel. But be prepared - most "urban" RV parks are little more than parking spaces and a hookup.

6. Renting an RV

Renting an RV can be horribly expensive. I think we paid $175 a day to rent a small one, and that was over a decade ago. However, it can be a fun way to explore and vacation in a far-away place, even overseas (e.g. Australia). Many Europeans fly to America to rent RVs for vacation.

Renting an RV can also be a good way to figure out whether you really want one. Usually, only small to medium sized motorhomes are available to rent (not trailers). But it does give you a good idea of how it feels to stay in an RV. Before buying an RV, spending a week renting one can be an interesting experiment and could save you a lot of money, if it turns out you are not the RVing type.

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RVing can be a cheap and interesting way to travel and vacation, depending on how you approach it. Like anything else, trying to buy the "ultimate" RV is probably a silly idea, and defeats the original purpose of RVing, which is to vacation cheaply.

If you find you don't like RVing, or you find yourself using your rig less and less, sell it. The largest and most costly mistake people make in RVing is hanging onto rigs that are not used. They depreciate in value and decay and end up costing the owner huge amounts in depreciation.