Everything You Should Know About Cheapest States to Purchase An RV
Recreational vehicles (RVs) are increasingly gaining popularity as a convenient way to travel, especially among younger generations. Today, more than 11% of American households own one, with over 15 million millennials alone owning an RV.
An RV is probably one of the biggest investments you might make in your life. You must therefore try and save money anywhere possible to keep the final costs down. The truth is that it is actually cheaper to purchase an RV in some states than in others. However, determining the cheapest place to purchase a camper depends on various factors aside from the initial purchase price. Read on to find everything you need to know when buying an RV in different states.
So, What Is the Cheapest Place to Buy An RV?
Generally, there are several factors to consider when buying an RV aside from the initial cost of the vehicle. The title and registration costs, personal property taxes, insurance fees, and sales taxes determine a camper's final cost. Because these costs vary from state to state, you can find it cheaper to buy an RV in some states than in others. So, which expenses should one consider to determine the cheapest place to buy a camper?
The Actual Cost of an RV
Arizona, Florida, and Texas are the cheapest place to purchase an RV if the buying price is the only consideration. These three are popular domicile states for full-time RVers. You can find great deals whether buying brand-new or used campers, especially during summer when they are readily available.
However, this does not mean they are overall cheaper. Sales taxes, state income taxes, and registration costs may drive up the final cost, making the savings irrelevant. For instance, Florida is among the states with the highest registration fees. The registration costs may outweigh the money you saved during the initial purchase.
You should also consider the expenses you might incur when buying a camper from another state. These include your travel expenses, whether flying, driving your car, or renting one. It might be costlier to purchase an RV from a different state if you add in all those extra expenses.
Taxes
When buying an RV, you may incur related taxes, including sales taxes and personal property taxes. These taxes differ among states, with some taxing up to 10% in sales and local taxes. This means you might have to pay an additional $10,000 if you buy an RV for $100,000. Sales tax is determined by where you register your vehicle, which is usually your primary residence state. It may also be based on the RV's weight, class, and retail value. You might have to pay the sales tax regardless of where you purchased the camper or whether it is new or old.
The good news is that you can save money and avoid hefty taxes by registering your vehicle in another state. However, check with your state laws before registering your vehicle in another state. While some states don't allow out-of-state registration, others may allow it but don't fully appreciate it when that's done.
Montana is the best state when it comes to saving money on taxes. Basically, taxes are non-existent. This means no general tax, no sales tax, and no personal property tax. The state allows you to purchase and register your RV without residency, provided you get a Montana LLC. Additionally, you don't need a vehicle inspection to register your camper. You can apply for a permanent tag on vehicles above 11 years and avoid the yearly registration fee altogether. You may want to consider changing your residence to Montana if you’re planning to be a full-time RVer. Oregon, Alaska, New Hampshire, and Delaware also have no general sales tax, but you cannot register as a non-resident.
Title and Registration Costs
Once you buy a camper, you'll need to pay for a title that shows ownership and registration to become roadworthy. States such as Arizona have the lowest registration fees, while some, like Florida, have the highest registration costs in the nation. The money you save on the title and registration fee may not be significant in the long run.
RV Insurance Costs
You also need insurance coverage for your camper to be street-legal. It is a crucial factor to consider since it also varies among states. Louisiana has the most expensive insurance costs, averaging $2,839 yearly. Maine is the cheapest, with an average insurance cost of $858. Unfortunately, Maine has relatively high sales and property taxes, which may nullify this advantage.
Montana is also the second-highest expensive state when it comes to motor insurance, even though it has zero general tax. The money you may have saved in taxes might not be worth the costly insurance coverage.
On the other hand, South Dakota has fairly low insurance costs, a low sales tax of about 4%, and zero personal property taxes. It is the cheapest place to buy an RV and live or travel full-time. Furthermore, establishing residency in South Dakota is easy if you consider becoming a full-time RVer.
Consult with an RV insurance agent about the best coverage level depending on the value of your camper and your needs.
Complications of Registering in A Different State
Although you may take advantage of tax breaks by registering your RV in a different state, you might face some issues. For instance, California, Massachusetts, Nebraska, Iowa, and Wyoming enforce tax collection on vehicles brought into the state after a certain amount of time has passed since purchase and/or registration in another state.
In addition, insurance companies may hesitate to cover an RV registered out of state or deny a claim should your RV get in an accident. Full-time RVers should make sure to legitimately change their domicile to avoid complications with their old or new home state.
Final Remarks
Buying an RV at the lowest price goes beyond the initial cost. Many factors, varying from one state to another, such as taxes, registration costs, and insurance premiums, affect an RV's final cost. You may seem to save money in one area but then lose it in another. A good example is Montana - while it has no general or sales taxes, it has expensive auto insurance rates. Consider all the related expenses and your situation to determine the cheapest place to buy your RV.
Once you’ve made your purchase, consider adding a backup camera to your RV as an additional safety feature and to improve your driving experience. A backup camera provides a clear, real-time view of what is happening at the back of your vehicle, leaving no sight unseen. Contact us for more information.
