Getting Over RV Sticker Shock

Tips for focusing on monthly payments.

Brooke & Buddy Baum Brooke & Buddy Baum  |  11.01.2017

When we roll up in our brand-new Winnebago View sporting a hard-to-miss Mercedes emblem on the front, non-RVers always ask us the same question: “How can you afford that?” While it is tempting to let them assume we are Lotto winners or the makers of a popular app, the truth is much more surprising to them – we just make payments.

Making a $100k+ purchase can be daunting. When we first started looking at RVs, we struggled to come to terms with the total price of a motorhome and were frustrated that there weren’t any quality options with a sticker price that didn’t give us anxiety. So, we decided to stop paying attention to it. Instead of comparing motorhomes based on MSRP, we changed our focus to monthly payments. And since an RV can be financed for up to 20 years, that number was much lower than we had anticipated.

Deciding what we could afford based on what we would pay each month was a lot easier to swallow, and much more realistic. This is the primary reason we decided to buy new. The difference we would pay per month to have a new RV with a warranty seemed well worth it. Plus, living in an RV would actually save us money!

How can an RV save you money?

Deciding to live in an RV full-time was not just about the exciting adventure for us, it was a way to minimize our bills. Before our purchase, we were paying $1,500 for a one-bedroom apartment outside Denver, not including utilities. So, when we realized an RV payment for a brand-new Winnebago would be less than half that, it wasn’t very hard to pull the trigger.

Since our View fits in most parking lots, we were also able to sell both cars – unburdening ourselves from a car payment, car insurance and upkeep on two cars. And by traveling full-time in our RV, we also save a ton on travel expenses (plane tickets, hotel rooms, etc.) because we are constantly visiting new places in our home and don’t feel the need to escape anymore.

The savings will be different for everyone, but luckily RV life is very flexible. Making conscious decisions on how much fuel you are using, where you are camping and how often you cook in your rolling home can all have a huge impact on your budget.

Plus, you can write off the interest of a motorhome on taxes every year because it is seen as a second home!

Getting approved for financing

However, deciding you can afford an RV based on monthly payments won’t matter if you can’t get financed. Good credit, a decent debt-to-income ratio and a 10% down payment are usually necessary to get financed as a full-timer. However, loan-to-value ratio of the motorhome also effects the down payment, so this may increase or decrease what you will be expected to put down.

Find out if you will have any trouble getting financed before you begin your search. And, with most things, there are always some unconventional alternatives – like this co-buying loophole Heath & Alyssa Padgett used to buy their RV.

Getting in the green

Another common concern is depreciation. Although RVs are seen as rolling homes, they depreciate similar to a car. This can be frustrating when making such a large purchase, but the way we got around it was committing to a certain amount of time in our RV. Before we began our search, we decided that whether we liked it or not (and we REALLY like it), we’d live in our RV for at least two years. After that, we could trade it in for something different or sell it without taking a large loss.

For more detail on this, Don Cohen explains how to look at buying a motorhome from a business analysis perspective, in this helpful article.

But at the end of the day, we honestly aren’t too worried about if our RV is holding its value or if it is a smart investment in the traditional sense. It has brought us more value than we could ever pay for and was the best financial decision we’ve ever made, because it was an investment in us – our marriage, our freedom, our happiness.

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5 Comments

  1. Jim Getten Posted on 11.05.2017

    As an over-the-road trucker for 38 years I can tell you for sure that that living mobile is much more interesting than staying in one spot however, there are many tricks to saving money. Learning where the cheap or even free spots are for hanging out takes time. Always try to do things the opposite of the crowd especially during changes in the seasons. There are many more of us baby boomers running around the country in RV than ever before and today’s crop of over-the-road truckers are not of the quality that my generation was so I avoid them whenever possible on the highway. Good luck with your travels and Adventures. Going mobile is definitely a treat for many but can be a serious problem for some. Some of us are gypsies and some of us are home bodies. Don’t make a large investment until you decide which one you are especially if you are married.

  2. SC Posted on 11.03.2017

    Chris, you’re doing it wrong if you’re spending a lot of money on camp sites. There are tons of free BLM camp sites available throughout the west and southwest.

  3. Liz from The Virtual Campground Posted on 11.02.2017

    Hey great article guys! So true. If you live in it and commit to the lifestyle for a certain amount of time, it really isn’t too bad! And woohoo for 20-30 year loans! haha

  4. Chris Posted on 11.02.2017

    I have to disagree with your assessment of saving money by living in an RV full-time. We are in the process of getting our house rented to head out on the road full-time and have been running numbers that paint a different picture.

    We are financing just over $100,000 of our Winnebago Vista LX class A motorhome for 20 years and our payment is half of what you were paying for your apartment. That’s just your house payment. Other expenses include campsites for either short term or long term and if you camp long term (1 month or so) most campgrounds will meter your electricity and/or your water. And if you want to spend winters in warm climates, your monthly campground expenses can be significant. As you mentioned, the point of living in an RV (at least for us) is traveling, so gas is an expense that can’t be ignored. Food will most likely remain the same as when you were living in an apartment, so no savings there. What about the cool places you go? I’m sure some money will be spent on experiences.

    I feel like RV manufacturers are misleading the public by promising a low cost life and it’s true to a certain extent, but not as much as I feel we are lead to believe. However, there is no argument from me that living in an RV will provide a more interesting life than basing yourself in one place.

    1. Brooke & Buddy Baum Posted on 11.03.2017

      Great points, Chris! Thanks for sharing. Yes, RVing will vary greatly from person to person. But, in our experience, we have found many opportunities for savings by having such a flexible lifestyle. For example, we can dry camp for a few weeks, stop driving as much, choose hiking over paid attractions, and eat all our meals at home if finances get tight. If we are going to stay at an RV park, we often stay somewhere far away from popular areas to find better prices – we found one for $150 a month (plus metered electric) once! Our bills are significantly less as RVers because we have much more control of what we spend now and can always find budget-friendly options if we look hard enough. Hope you can find some ways to save while on the road, too. :) Happy travels!