There is a huge gulf between the price of a budget RV and a luxury one. The lower-end ones can be bought for the price of a family car, providing you’re willing to cut out some amenities and buy used. The luxury ones, on the other hand, can cost you as much as a family home and can be just as big and just as luxurious.
What You Need to Know
- Competition: RVs are very popular right now. This means a number of things. Firstly, there are more being sold than ever and this is driving up the production and the price. Secondly, used RVs in a very good condition are valued higher than they have been in the past and don’t remain on the market for long. You need to be shrewd when buying new and quick when buying used.
- Cover: A lot can go wrong with an RV. Luckily, there are lawyers out there that work with victims of defective RVs to ensure they don’t lose out. But there are many other issues that can not be easily covered.
- Risk: It is a very expensive purchase and a very risky one as well. A lot can go wrong. You could argue that the same applies to luxury cars, but the people who spend $100,000 on a Rolls Royce are not the same people who drop $100k on an RV. The former tend to have money to spare, the latter tend to save half their life to get their money. Know the risks and balance them against the potential rewards before you make this commitment.
- It is Not an Investment: No matter what the salesman tries to tell you, an RV is not an investment. Its value will never grow or hold—it will always fall. Do not buy it unless you can afford to lose it.
Problems with Buying a New RV
The biggest issue with purchasing an RV using a loan is that you will not be able to use the RV to cover the loan if anything goes wrong. If you buy new then you’re going to lose 20% of its value as soon as you hand over the money.
So, if you loan $100,000 then you could end up paying over $150,000 back when you add the interest, but the moment you get behind the wheel that vehicle is only worth $80,000, or nearly half the loan. If you were to hit a financial roadblock and sell the RV for that price you would still be $70,000 out of pocket.
This applies even if you don’t take out a loan and pay with cash. Right now, the market is saturated, with more new and used vehicles than ever. It’s a bad time to buy and a good time to sell, but that could easily change and when it does you could stand to lose a fortune.
Buying a Used RV
This is the better option. You have some protection if the RV turns out to be a lemon and you can also get a cheaper price. You should avoid taking out a loan to cover the full amount, but it will leave you in a better position than if you had bought it new.
It is a very expensive vehicle to own and it can represent a very big risk, so whatever you decide you should make sure you do your research first.