As we go through the process of acquiring our very first RV, we've experienced hurdles and anxiety and questions! My oh my! Questions!
- What could our budget handle? What would a finance company approve?
- What kind of RV?
- What kind of Vehicle to tow the RV safely?
- How to handle registration, titling, sales tax when we reside in two different states and might purchase the RV in a different state. That's a whole bucket of worms!
What could we afford?
I've been self-employed for over a decade, and because of that variability in income, I'm anal about budgeting. I use a spreadsheet and check it every morning against bank accounts and credit card activity. I need to be comfortable with what comes in and what goes out. That routine makes it easy to plug in numbers to play the 'what if' game.
The max I am comfortable paying monthly is $300 for an RV and $300 for the tow vehicle. Always figure in the initial costs of sales tax and insurance for both of those items in your budgeting.
Be honest with yourself about being able to afford toys. A lifetime ago, my spouse and I went to a boat show. I didn't want a boat, he did. We could not afford a boat. Well, after looking at boats that day and settling on the 'Oh if we only could afford it' boat, my husband decided to apply for it. I wasn't too worried because there was no way we would qualify. I trusted the financial institution to let him down. The minute we walked back into our home, the phone rang and we were approved! We struggled for the next 5 years spending much more than we had on this toy. It was not a good thing. So, please, don't rely on the RV or boat financing company to look out for your best interest. Be smart and stay secure.
Anything with a 'bed and a head' can be called a second home (if you don't already have a second home) and all the interest on those payments are tax-deductible. That benefit has nothing to do with owning your own business but, if you are paying taxes every year, why not get yourself a fun deduction? As we know when you purchase a large ticket item, it's heavy on interest and light on principal for most of the amortization of the loan.
Because I can deduct all the interest on the RV loan, I planned on putting the minimum down for that purchase even though that meant a bit higher interest rate. The interest on the truck would NOT be tax-deductible interest so I plan to put more down on that to get the best interest rate.
In the end, I ended up putting 15% down ($4500) on the Lance 1575, got a 6.99% interest rate and the payments will be $285 a month for 10 years. Sales tax will be $1892. Yup, that works for us!
The truck search starts the beginning of August and I'll report back on that project then.
What kind of RV?
Because we love the adventure of off-roading we leaned heavily towards getting a Jeep Wrangler. We have a Jeep Liberty already at our Arizona house and love it! But the Liberty isn't as safe and reliable as a Wrangler on the trail. Our dream is to get off-road, park the trailer and then explore with the Jeep.
In a nutshell, we wanted a Jeep Wrangler that could, coincidently, pull an itty bitty home behind it. Nothing fancy in the travel trailer, just a way for us to explore further than a day's worth. So, what can a Jeep Wrangler pull? The heavy duty jeep can pull up to 3500 GVWR - (gross vehicle weight rating) which is the max with the trailer loaded. You should NOT go over that weight. It's more complex than that but you want to start with being sure the GVWR of the tow vehicle matches or is higher than the GVWR of the RV.
This video from RVSEF is a good primer for understanding the parameters and things to look out for. Educating yourself now can save you lots of grief later. This resource, the Trailer Towing Guide, was recommended by several RV expert friends and we referred to it a lot before making the final decision as to what tow vehicle we'd get.
Our list of travel trailer wants included:
- Small but with the right amenities; full bath, extra bed
- As easy to tow as possible
- Quality construction - as much as the budget could handle, to ease our newbieness 😉
- Wet bath or full bath
- Size of water, gray water and black water tanks
- Size of propane tank
- Sleeps at least 3
- Price and quality
For the amenities and quality we wanted, the Lance 1575 was our final decision because of the slide-out, big windows, full bath. It stretched our desired budget but, and this is a key thing for us, because an RV is tax deductible, it really does work in our budget! I'm self-employed and will be using the RV as a base to do work from as well, so there are advantages.
What kind of vehicle would we need?
The other thing this decision required is another look at getting the Jeep. Oh my heart really wanted that Jeep!! But the Lance 1575 has a GVWR of 3750 and the Jeep 3500. We were told it COULD work if we didn't load much into the trailer. But that's not the way we wanted to start out, being worried about what we were putting into the trailer. We liked the Lance 1475, and that was a 3500 GVWR, but it only sleeps 2 and we want the extra opportunity to bring a friend or the grandkids.
Laurie and I have both owned Toyota Tacomas and we loved them! So, we decided the vehicle will be a Tacoma V6, crew cab, short bed, tow package. That's next on our list to find. To the left is the chart from Trailer Towing which is a great resource to learn from.
How to handle registration, titling, sales tax when we reside in two different states and purchase the RV in a different state.
We live in Massachusetts about 5 months and Arizona about 5 months and the rest of the time we will be doing the cross-country trip between them. Because we are in MA now we're purchasing our new toys here. I still have a MA driver's license so I will register them, pay sales tax and get the insurance here in MA.
We also have a vehicle in AZ which has AZ plates on it. Theoretically I should have an AZ license as I pay taxes in AZ and claim it as my state of residence.
I've read as much as I can about the laws regarding these things and they really aren't clear. So, we are making the best decision we can to get the ball rolling and that is to base them in Massachusetts and just take them back and forth to Arizona. It's cheaper doing it this way as sales tax in MA is currently 6.25% and in Prescott Valley it is 9.18%.
Having made those decisions we set out to find the Lance 1575. The Lance website led us to two dealers and only one had the 1575. That one was way up in Vermontville, NY at Happy Camping RV. And, THAT, my friends, is another story.
Thank you for being interested in our journey. We are happy to answer any questions here or on our Facebook page at https://www.facebook.com/TwoGalsandaDog/
Life is Short, Enjoy it~
Michelle, Laurie and Rue!