Author Topic: Can't afford the gas to drive new $40K RV to local campground  (Read 20219 times)

MrsPete

  • Magnum Stache
  • ******
  • Posts: 3519
Re: Can't afford the gas to drive new $40K RV to local campground
« Reply #50 on: March 20, 2014, 08:17:35 PM »
Speaking of RV's a buddy of mine borrowed a friend's high end RV for the weekend.. it did something like 6mpg on average.

it took 20 minutes at the pumps to fill it with diesel.

Add to this the $25 plus a night "camping" fee and.. you guessed it.. its cheaper to stay in hotels and drive an economical car!

Frank
We wanted to take our kids on a trip to the Western national parks, and we started with the idea that we'd rent an RV.  We assumed it'd be cheaper than hotels, but when we started putting numbers on paper, we found that  it was MUCH cheaper to stay in hotels!  In addition, staying in hotels gave us the option to splurge and spread out into two rooms when we were in inexpensive areas and to squeeze into tight quarters in high-priced areas.  Since our trip included some trips through big cities, my husband was glad that he wasn't driving a big box, and -- of course -- our small car took much, much less gas.  I was amazed at how much cheaper the hotel option was.

greaper007

  • Handlebar Stache
  • *****
  • Posts: 1129
Re: Can't afford the gas to drive new $40K RV to local campground
« Reply #51 on: March 21, 2014, 03:28:12 AM »
Speaking of RV's a buddy of mine borrowed a friend's high end RV for the weekend.. it did something like 6mpg on average.

it took 20 minutes at the pumps to fill it with diesel.

Add to this the $25 plus a night "camping" fee and.. you guessed it.. its cheaper to stay in hotels and drive an economical car!

Frank
We wanted to take our kids on a trip to the Western national parks, and we started with the idea that we'd rent an RV.  We assumed it'd be cheaper than hotels, but when we started putting numbers on paper, we found that  it was MUCH cheaper to stay in hotels!  In addition, staying in hotels gave us the option to splurge and spread out into two rooms when we were in inexpensive areas and to squeeze into tight quarters in high-priced areas.  Since our trip included some trips through big cities, my husband was glad that he wasn't driving a big box, and -- of course -- our small car took much, much less gas.  I was amazed at how much cheaper the hotel option was.

Especially with things like priceline, hotels are really reasonable now.   My wife's family had a toyota motorhome from the early 80s and that was a vehicle that made sense.    They were small with a 4 cyl manual transmission and I think some of them were pushing 20 mpg.    They would try to find free places to stay to make the trip cheap.    I don't know why rv's all have to be so enormous and/or expensive now.    I'd buy a Westfalia if they weren't more expensive than they were new 20 years ago.   There just isn't a small, fuel effiecent modern camper/rv option these days.    I wonder why.

fauxjargon

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: Can't afford the gas to drive new $40K RV to local campground
« Reply #52 on: March 21, 2014, 05:52:42 AM »
I think it is because the only market segment that can afford / wants an RV is quite wealthy.

Where I live a lot of snowbirds (retired people who live in the southern US in the winter and Canada in the summer) show up in monster RV's every year.  Some have houses, some actually don't - they actually live year round in their RV.  They might literally drive it twice a year, and I assume most of them idle them every now and then to keep the engine happy, which probably only uses a few gallons a month.  Although some are fifth wheels with big trucks pulling them, it is much more common to see them towing a 4-door car or small SUV (Corollas and CR-V's for example).  The cars are never new.

By the time/if I am FI, gas will be too expensive to do it, but if I was retired now it would be an awesome lifestyle.  If I decided I wanted to move around more I would get a smaller more efficient RV, but if I was only moving it twice a year, fuel economy wouldn't be too important to me.  Even if you go from where I live to Florida in a 6mpg vehicle, it costs about $8000 in gas, which twice a year, is within reach of some.

darkadams00

  • Bristles
  • ***
  • Posts: 387
Re: Can't afford the gas to drive new $40K RV to local campground
« Reply #53 on: March 21, 2014, 10:23:51 AM »
I think it is because the only market segment that can afford / wants an RV is quite wealthy.

I would hesitate to generalize that only wealthy folks are driving the RV design process. I know several folks who have net worth near zero who own RVs (and/or boats). Also, the trend of bigger size is increasingly prevalent across many other consumer sectors--houses, cars, meal portions etc. Real estate developers and auto/RV manufacturers have a vested interest in selling "bigger" to try to increase profits, e.g. 1975 Toyota Corolla vs 2014 Toyota Corolla. The consumers' constraints are limited cash (wealthy) and limited financing (less wealthy). The markets will decide equilibrium, but the availability of financing will help ensure that many less wealthy folks have access to more RV/car/house than they can afford, keeping the bottom end of the product lines higher in size, features, etc. than they would be in a cash-only system.

paddedhat

  • Handlebar Stache
  • *****
  • Posts: 2229
Re: Can't afford the gas to drive new $40K RV to local campground
« Reply #54 on: March 24, 2014, 07:38:54 AM »
Great thread with a hilarious "rappers are scum, or not?" component oddly weaving through, LOL.

I'll take a shot at few misconceptions about the whole lifestyle, if anybody is interested.

"I think it is because the only market segment that can afford / wants an RV is quite wealthy."
It would appear so, but in reality it's a solidly middle income activity. The RV manufacturing industry is booming, and has been for the last few years. The feedback I hear from dealer management is that the towables,  first the lower cost travel trailers, followed by larger fifth wheel units, are what sells. Then it's the gas engine motorhomes. One buyer at a large dealer outside of Philadelphia told me that they no longer carry any lines of the big, expensive diesel powered units, and really don't want to see them as trade ins. Not to say that there is not a lucrative market in these products, but it's far smaller than the "family of four, needs a trailer with bunks, and a low payment" demographic.

but if I was only moving it twice a year, fuel economy wouldn't be too important to me.  Even if you go from where I live to Florida in a 6mpg vehicle, it costs about $8000 in gas, which twice a year, is within reach of some.


Well, mileage is bad, but fortunately not THAT bad. At current prices your $8K buys about 2250 gallons of gas, and would get your rough 13500 miles from home at 6 MPGs. Assuming you are not a Mongolian Shepard, your probably a bit high on the estimate.  In reality, an average of 8-9 MPGs is probably more accurate, and a typical snowbird migration, lets just pick mid- Michigan to central Florida, would be 1250 miles, and $525 in fuel.  Given that most retired folks would take three or four days to do the trip, with little lodging cost, three meals from their own kitchen every day, and no airline tickets, rental cars, etc..... it starts to look a lot more attractive. Don't forget, the average couple doing this migration also is either using a diesel pick-up that will get 2.5 to 3X that fuel mileage when unhooked, or is towing a very fuel efficient little car, for use during the few months that the RV remains stationary in a warmer locale.
    There is a huge misconception among non-RVers. They look at a big beast that gets 7-11 MPGs and think, "how the hell can anybody afford to drive that thing". Unfortunately, they look at it through the lens of their own commuting experience, and do the math based on their own silly 20K per year of driving. Fact is, most RVs really travel very little, and the fuel cost is hardly ever a deal breaker. I have seen statistics that the average RV, purchased for family use, leaves the driveway about 8-11 times a year. One week long vacation, and the remainder are weekends to fairly local destinations. If you shop for used, motorized rigs, it's very typical to find decade old units in spectacular condition, with 25-30K miles on them, and find folks who are having a terrible time selling ones with twice that mileage, since they are viewed as "high mileage".

"I was shocked to see how much cheaper it is to stay in hotels,  as compared to renting an RV"

Yes, it can be horrifically expensive to rent an RV. The rental agency is handing you a $75K ( or much more) piece of equipment that they purchase, maintain, repair and insure. Typically, the client is not only new to the whole concept, but a significant majority are foreign tourists who are doing their very first miles in North America in a giant beast, with prior experience limited to driving very small cars, often on the other side of the road. The other issue is that many agencies have very steep charges for mileage, so it can really add up.  Now as a tourist, doing a typical summer national park tour, booking hotels in remote areas with very high demand, eating three meals a day at restaurants, and renting a car, are you saving a ton of money over renting an RV? Probably not.  When asked, I always tell friends that rental RVs are for folks who want to explore the idea of owning an RV, or those that have severe time limitations and want to do the fly and rent style trip to see the other side of the country.

With those costs averaged out you could fly somewhere first class, have a limo pick you up at the airport and drive you to the trail head with your tent and gear.  Hike for two weeks eating caviar, steak and the finest Scotch then limo it back to the front of the plane and still come out ahead.

Totally false premise. Take the same argument and apply it to another frivolous hobby, like owning a sports car. By your way of thinking, the narrative sounds like this, "By the time you do the math on buying a 2015 Corvette, insuring it for the year, and buying tires, you will have blown $75K." The mustachian response might be, "Well, it doesn't have to be expensive to enjoy yourself.  I dropped $3500 for my ten year old Miata, it takes about $250 a year for insurance, and a few hundred in upkeep that I do myself, and it puts a smile on my face ever beautiful day that the wife and I head out for a drive.". RVing is no different than any hobby or lifestyle, you can drive yourself into overbearing debt, waste your future by doing a HELOC to pay for something you can't afford, or you can play the game smart enough that it's shockingly cheap.
I just advised a co-worker of my wife who bought a travel trailer. They travel with their son's baseball team, spending dozens of weekends a year at hotels. They have a small v6 pick-up. They bough a new, modest unit for $10.5 K out the door. If they keep the thing for a few years, it will of paid for itself. Two night a week at some $75/day hotel in a backwater cow town, with another $150 spent at less than notable eateries, compared to $25/day at the campground, and no additional cost for food, adds up quick.

Now to be fair, that $40k RV needs a $50k truck to pull it.  Or even worse you could be my parents, who own an RV lot, Trailer and a Camper, with a truck to pull it all…… It works out to about 155k just to "camping". I'll stick to my tent.


Plenty of folks are out there as occasional campers, snowbirds, and even full timers who have a tiny fraction of your estimates invested in their rigs. It's nothing to hit a state park and see a 25 year old, but decent motorhome, pulling a 15 year old Saturn. The whole thing might be worth $7-8K, but it does 98% of what a quarter million dollar rig does.

The owned lot situation is interesting. Like a lot of "investments" I'll pass, but they can be an real solid move. Plenty of folks end up with nice appreciation, and a low cost place to spend time. It might really shock some of the tight 'stashes here, but some lots, purchased in high end resorts, are nothing but a very small piece of property, under a condo/HOA agreement, with a shocking monthly fee, sell for $150-200K, and there is more than a little demand for them. The other side of the coin is that it's possible to buy a lot in a really nice location for $15-30K and a few hundred a year in fees, which gives you a place to stay for as long as you like, and extremely low expenses.

PaddedHat - would love to hear more about this place in Mexico.
Me too - though he may not actually be in Mexico.  Being on the Gulf could mean Texas, Louisiana, etc.


Well, it's definitely in the states. Unfortunately, I really can't get too specific. the issue here is that I found it by following a hipster nomadic blogger who spent the last two winters singing the praises of the location and posting stunning pics. This resulted in quite a windfall to the few local campgrounds that started seeing a huge influx of winter bookings. I'll be happy to give anybody some info. on a PM. but this place is already suffering from excessive publicity, and I would really like to find a spot there next year, :)




« Last Edit: March 24, 2014, 08:44:59 AM by paddedhat »

MrsPete

  • Magnum Stache
  • ******
  • Posts: 3519
Re: Can't afford the gas to drive new $40K RV to local campground
« Reply #55 on: March 25, 2014, 06:12:08 AM »
  There just isn't a small, fuel effiecent modern camper/rv option these days.    I wonder why.
Check out teardrop campers. 

MrsPete

  • Magnum Stache
  • ******
  • Posts: 3519
Re: Can't afford the gas to drive new $40K RV to local campground
« Reply #56 on: March 25, 2014, 06:15:04 AM »
I think it is because the only market segment that can afford / wants an RV is quite wealthy.
Add to that:  The American public has accepted that debt is a way of life, and financing is pretty easy to get.  So RVs are subject to the same "upgrade fever" that affects car buying.  If ____ is available, and we're making payments anyway, why shouldn't we add it on?  Oh, and that other thing too!  Pretty soon you're out of the basic market and into an expensive RV. 


AlanStache

  • Handlebar Stache
  • *****
  • Posts: 1909
  • Age: 40
  • Location: South East Virginia
Re: Can't afford the gas to drive new $40K RV to local campground
« Reply #57 on: March 25, 2014, 06:58:36 AM »
@ paddedhat
Quote
Quote
Now to be fair, that $40k RV needs a $50k truck to pull it. 

Or even worse you could be my parents, who own an RV lot, Trailer and a Camper, with a truck to pull it all…… It works out to about 155k just to "camping". I'll stick to my tent.

With those costs averaged out you could fly somewhere first class, have a limo pick you up at the airport and drive you to the trail head with your tent and gear.  Hike for two weeks eating caviar, steak and the finest Scotch then limo it back to the front of the plane and still come out ahead.

Was my full quote, yes you can drive a golf cart but the topic at hand was people spending 100k on "camping" and my off the cuff quip being cheaper to fly first class and be chauffeured around.

Numbers:
RV:
>> 100k$ auto loan-zero down, 6 years, @3% is 1500$/mon.  lets round up to 1600$/mon for property tax/maintenance etc.
1600$/mon * 12 mon = 19200$/year just in ownership costs.

Flying:
>> My home airport ORF (Norfolk Va) to Denver, quick search of Delta.com in April with flexible dates show round trip first class at~1300$/person.
>> quick search of limos around Denver: 300$ one way from the airport to Estes Park, 80 miles/1.5hr drive: 300$
>> food: 100$/day/person.

3 people-one week: 3* 1300$ + 2*300$ + 3*7*100$ = 6600$ (per trip)

So even before gas and food while RVing a family of three do better on this hypothetical week of flying to the hike on the other side of the country three times per year. Yes, you start dividing the RV costs by more trips it becomes more competitive, yes, you start adding more people the RVing becomes more competitive, yes you buy a cheaper rig the RV becomes more competitive, yes you will ultimately own the RV.  But the quip was in response to people getting a nice new setup.  And honestly I was surprised how cheap the flying option turned out. 

If people can afford a rig and like using it and it gets there family some together time, EXCELLENT!! Go have fun in your RV!!!  I was just making an off the cuff remark about the potential high cost (that many Americans pay) and how some other seemingly ridiculously expensive options might in fact be cheaper.

Melody

  • Handlebar Stache
  • *****
  • Posts: 1089
  • Age: 30
  • Location: Australia
Re: Can't afford the gas to drive new $40K RV to local campground
« Reply #58 on: March 25, 2014, 07:25:43 AM »
You can do an affordable RV rental - Me and my boyfriend are using this in an upcoming trip to the USA:
http://www.wickedcampers.ca/
$350/week + insurance of $70/week
It's an Australian company and I've seen a few in the area. The ones I have seen here are barely more than a mattress on a wooden frame with a camping stove and plastic tub for washing dishes, but the USA ones look a little fancier. Either way I think we will find this more comfortable and easier than camping (less set up/take down, less luggage to carry with us from Australia).

Interestingly, small RV's are popular here in Australia (most likely because our petrol is more like $6/gallon and has been for quite some time) - I know a number of people who own small RV's or DIY RV (i.e. converted vans they have kitted out themselves) but I don't know anyone with a big rig. I think there is also a different driver's license you need here to drive something really big.

paddedhat

  • Handlebar Stache
  • *****
  • Posts: 2229
Re: Can't afford the gas to drive new $40K RV to local campground
« Reply #59 on: March 26, 2014, 05:45:17 PM »
If people can afford a rig and like using it and it gets there family some together time, EXCELLENT!! Go have fun in your RV!!!  I was just making an off the cuff remark about the potential high cost (that many Americans pay) and how some other seemingly ridiculously expensive options might in fact be cheaper.

Great post. You are correct about the insane debit loads, and poor decision making skills that surface when many middle class Americans and Canadians decide to buy a new, expensive RV. Sadly, the situation is often worse that you portray. Two points need to be addressed in your theoretical example.

First, the average buyer could never hope to swing a $1500/month RV loan. Since the finance industry is well aware of this, they simply write notes that extend well beyond the bounds of sanity, as in, twenty year loans for RVs. Which are, sadly, pretty common.

 The second issue in your math is that the yearly nut of nearly $20K is obviously horrendous, but also probably low by $7-10K due to not factoring in depreciation. When it comes to things like new mid-priced motorhomes, you can pretty much determine that the unit will be sold for roughly 75% of MSRP and be worth 25-33% of that figure in 5-7 years.  In real world numbers it looks like this.

2014 Motorhome list price  $135,000
Selling price.                     $101,250

 (plus tax, tag and reg. Which in this case can exceed 10% depending on locale)

loan payments of  $490/month

 (for 240 months (twenty years) based on 20% down,  prepaying all taxes and registration costs,,and a LOW credit union rate of 5.24%.)

total out of pocket at delivery $26830.00
(in my state, w/ taxes and registration)

residual retail value of RV at the six year mark.  $44,500.
remaining loan balance  at the six year mark.     $57,200
Actual cash (wholesale auction) value of the unit at that time, at best, in the mid $30K range.

Bottom line if you need to dump the thing at a dealer, six years after you became the proud owner?  Well, so far you spent $62100, and you need to bring a check for about $21k to bridge the gap. A grand total of rough $83K in six years, or $1152 a month, as compared to your "low payment" of $490.

That's why I avoid new, higher end units, and always pay cash.  In the real world however, our first big three month "trip of a lifetime to Alaska" was in a used Tahoe and a very modest travel trailer. the entire trip for a family of four was $6700. This was in 2002, an I will freely admit that the cost of subsequent trips has gone up substantially with the explosive cost of fuel since then, but with a used truck and modest camper, I can still spend a summer on the road for less that it costs to take a family on an Alaskan cruise.

So, I will still argue that RVing can be a low cost affair, but as you point out, heading to the dealer with the typical consumer mentality of, "well honey, it's only $400 a month" is going to get you in deep shit, and keep you there for a LONG time to come.

paddedhat

  • Handlebar Stache
  • *****
  • Posts: 2229
Re: Can't afford the gas to drive new $40K RV to local campground
« Reply #60 on: March 26, 2014, 06:07:09 PM »
You can do an affordable RV rental - Me and my boyfriend are using this in an upcoming trip to the USA:
http://www.wickedcampers.ca/
$350/week + insurance of $70/week
It's an Australian company and I've seen a few in the area. The ones I have seen here are barely more than a mattress on a wooden frame with a camping stove and plastic tub for washing dishes, but the USA ones look a little fancier.

There is another choice in the US, called jucy. They are about $25/night more that your quote, but they are custom outfitted newer minvans that are similar to the old VW Westfalia camper Buses with the Pop-up roof. Keep in mind that the older GM minivans shown on Wicked camper site haven't been made in nearly a decade, so it may be possible that you are ending up with a rig that's been "ridden pretty hard" as the cowboys say. I guess as long as it keeps rolling while you're in the seat, it's all good. Have a great trip!

Melody

  • Handlebar Stache
  • *****
  • Posts: 1089
  • Age: 30
  • Location: Australia
Re: Can't afford the gas to drive new $40K RV to local campground
« Reply #61 on: April 01, 2014, 05:23:18 PM »
Will look up juicy too, we still have to lock down the details with doing one way rentals so good to know there are other options out there... Our budget is $8K + flights for a couple for 6 weeks ($4k each), which sounds like a lot, but I know if we aren't vigilant in keeping costs low we will exceed it... and of course coming in under budget would be nice, if we can do that while still having fun.

Cassie

  • Walrus Stache
  • *******
  • Posts: 5774
Re: Can't afford the gas to drive new $40K RV to local campground
« Reply #62 on: April 01, 2014, 06:30:17 PM »
We tried out the teardrop but it felt like being in a coffin. You have to love tight spaces.  We have a used motorhome and the value just keeps dropping every year. We took a 4000 mile trip and gas was over 4/gallon and was expensive. Some nites we just pulled into a truck stop for free but some nites we stayed in an rv park & that was not cheap.  Even though it was 14 years old (really low miles) when we bought it I am sorry that we did.  Of course gas was not high until about 3 months after we bought it. Now we just take the car & stay at Motel 6 or something equivalent in price.  This is much cheaper.

CarDude

  • Pencil Stache
  • ****
  • Posts: 611
  • Location: Chicago, IL
  • Beep Beep!
    • The CCD
Re: Can't afford the gas to drive new $40K RV to local campground
« Reply #63 on: April 01, 2014, 08:50:34 PM »
I'll be honest; the idea does appeal to me. But I think the tiny house idea appeals to me more.