Does it make sense to buy an RV before retirement?

 

In my area (Victoria, BC) I can rent an almost new class C RV for $900 a week fully stocked with everything needed. So the question is how many times would I have to use an RV I own to break even. Well, insurance on an a class C RV would be 1800 a year from ICBC. Assuming you could get a used Class C for 30,000 I would argue opportunity cost (8% interest) and depreciation on the RV would be around $5,000 a year. Maintenance easily another $900 a year. So to break even you would have to use the RV you own for at least 8 weeks every year just to break even with the rental. If you check out the RV forums most people who still work use their RV at most 1-2 weeks every year after the first year when the excitement has worn off a bit. 

In retirement an RV would make a lot of sense especially if you travel for 3 or more months of the year. So what are some other options right now to get a similar experience? One option, many rental companies will deliver an RV trailer to the camp site of your choice. This can be great because it saves you the headache of driving/ pulling a large vehicle you are not experienced with.

if you are traveling very infrequently a hotel can make sense as well. Whenever possible I like to trade the five star hotel for the trillion star hotel. The cheapest option for frequent traveling is traditional camping. Just the cost of insuring an RV buys a lot of luxury camping gear like a massive tent, air mattress, solar panels,  complete camp kitchen etc. All of these items can fit into the car or on this cargo hitch carrier saving on fuel costs. The other option, you can pick up a small light weight cargo trailer for under $1,000 and load it up with camping gear. This would make camping a convenient  hitch and go event. Trailers tend to hold their value very well should you want to sell later on. 

So the conclusion is an RV does not make sense financially if you plan to RV less than two months per year. In the example I chose a $30,000 used RV. New class C RVs are typically around $80,000 plus. Travel trailers are a little cheaper but require a tow vehicle. So it’s best to run the numbers to your specific situation. If you are still physically capable, I suggest sticking to a tent so you can take the money you save to buy more time to explore.

Happy Canada Day.

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