According to the RV Industry Association (RVIA), approximately 10 million U.S. households own RVs and about a million Americans live full – time in them. Living life on the open road is a growing trend. The RV Industry Association said RV shipments were up more than 40% year-over-year in January, with nearly 46,000 units shipped. Dealers are expecting a record year in 2021, the association predicts. The Coronavirus pandemic has inspired many to seek travel via an RV as it helps avoid hotels, motels, and large groups of people. At first glance, the idea of retirement life in an RV can seem appealing. However, there are many factors to consider before making the leap to a home on wheels.
RVs are a big investment. According to the RV Industry Association and Consumer Reports, a folding trailer (aka pop-up trailer) can range from $6,000 to $30,000. Conventional travel trailers start around $8,000 but can go as high as $100,000 depending on the size and amenities. Fifth – wheel trailers that overlay the truck bed can range from $18,000 to $160,000. Type A motorhomes, which are the heaviest and most spacious start at $60,000 and can go as high as $500,000. Type B and C motorhomes are smaller and lighter and can cost $60,000 to $150,000. Keep in mind that RVs will also depreciate over time, unlike that of a traditional home.
Gas is expensive, and chances are, gas prices will continue to move upward. Some couples who own their own motor homes can get about eight miles to the gallon and go about 370 miles on a full tank, which typically costs around $120 or more. Diesel motorhomes get better mileage but their fuel costs more per gallon than regular unleaded gas. Overall, most in the industry claim that diesel is a better investment and doesn’t depreciate as much.
RVs require routine maintenance. Even though it isn’t a traditional home, you still need to worry about monitoring waste and water tanks (there is one for sewage, one for the shower/sink, and one for fresh water), propane levels and appliances. You can obtain a warranty on your motorhome, but there will always be maintenance and repairs that fall outside of that warranty. Coach-Net is a roadside assistance provider that some RV owners use. A one – year membership runs around $179 for trailers and fifth wheels and $249 for motorhomes. Towables such as pop-up campers don’t have a lot of maintenance costs since they don’t have engines. They need to be winterized and wheel bearings must be packed to prevent rusting though. Motor homes have engines; there will be maintenance associated with that. Some motor homes will need to be serviced by the RV dealership, which sometimes can mean waiting months for a technician from the manufacturer to come to do the repair; others like a Class C could be taken to any dealership. The costs can add up either way.
Motorhomes require separate RV insurance. Policies are like that of a standard auto policy in that they provide comprehensive (theft, vandalism, acts of nature, damage from deer, etc.), collision, uninsured/underinsured, and medical. Many RV owners also seek total replacement cost coverage, which will replace your new RV with a comparable new RV if a total loss is experienced within a specified time frame (usually five years). Many also purchase replacement cost personal effects, which covers your personal belongings if damaged, destroyed or stolen. Some purchase vacation/campsite liability, which covers injuries and property damage when traveling/living in the RV for extended periods of time. Another option RV owners sometimes purchase is emergency expenses. If your RV is in an accident and can’t be used, this protection pays for lodging and transportation.
Being on the road all the time, may make it difficult to find in network medical providers and facilities. For those who are on a Medicare Advantage plan (Part C), you may not be covered for anything outside of emergency or urgent care if your plan states you are not allowed to see providers outside of your network. One tip that has beneficial for RV retirees is to make sure Walmart pharmacies are in-network in your plan, so you have a real good chance of not running into problems getting your prescription drugs. Some people take comfort in knowing their doctor has been with them for years and knows them inside and out. When you take on the RV retirement experience, you sacrifice that. You could be in a remote location somewhere and require medical attention, and there is no guarantee you will be treated by a doctor of the same caliber as what you are accustomed to.
RVs are different than standard vehicles like cars and trucks. They are exceptionally large, bulky and have massive blind spots. Their extended braking distance and lack of maneuverability also pose potential problems. In 2012, the Federal Motor Carrier Safety Administration reported that 75,000 people sustained injuries due to an RV accident. There are RV driving schools/classes you can take to get gain some experience and get comfortable before taking on the open road. According to rvschool.com, lessons can cost $595 for a two-day private lesson to $895 for a two-person, two-day private lesson. Refresher courses cost $325 and are only one day.
Lemon Law Problems
According to Lemon Law attorney, Steve Llehto, while most states have strong lemon law protections for auto purchases, RVs are handled differently, and the level of protection offered tends to be much lower. In most states getting the manufacturer to buy it back is next to impossible, according to Lehto. He says most states have non- specific wording in their lemon law such as “reasonable attempts to repair the RV,” which can make obtaining relief for an RV purchase extremely hard.
Spending time with your spouse is enjoyable, but 24/7 may be too much for some. Living in an RV makes it difficult to get time to yourself. If you get into a disagreement, you can only go so far. It is important the couple has strategies for handling arguments, as well as finding opportunities for alone time.
Retirement is a new chapter in life. Whether you plan to enjoy it on the road or within the confines of a traditional home, planning is essential. Give us a call today at 410-824-1853 or visit us at www.geierfinancial.com.
Sources: AARP/ Kiplinger/ Money
© Geier Asset Management, Inc. May 2021. Dan Mules, CPA is a Client Manager and Tax Planning Professional for Geier Asset Management, Inc., a Registered Investment Advisor. The articles & opinions expressed in this material were gathered from a variety of sources, but are reviewed by Geier Asset Management, Inc. prior to its dissemination. All sources are believed to be reliable but do not constitute specific investment advice. The views expressed are those of the firm as of May 2021 and are subject to change. These opinions are not intended to be a forecast of future events, a guarantee of results, or investment advice. Any advice given is general in nature and investors must consider their own individual circumstances. In all cases, please contact your investment professional before making any investment choices. Geier Asset Management, Inc. is not responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.