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Over The Network

Articles

Guide for buying an RV in the USA

by Tom Jones

Huge price differences, currency exchange rates and other factors combine to make it financially attractive for non-USA residents to buy an RV in the USA, take an extended trip here and/or ship or drive the RV home. We have put this guide together based on the experiences of RV Forum members who have gone through parts or all of the process and forum members who live in the USA.

Some buyers have chosen to use the services of an agent or broker to handle the entire process - for a fee, but this has usually occurred when the buyer didn't have sufficient time to spend in the US dealing with the various issues.

Most of the steps outlined will apply to the purchase of both new and used (second hand) vehicles. However, used vehicles could be purchased from either a private individual or a dealer.

If you intend to take the RV home, be aware that some countries have a requirement for the individual to be out of their home country for an extended time (e.g. 1 year) in order to qualify for special tax treatment (known in the UK as Transfer of Residence Relief) on returning home. To comply with this requirement, many foreign buyers choose to tour North America before returning home with their RV. Extended visits to the US have visa and immigration implications, and these are also discussed in this article.

Choosing your RV

A good starting point would be having some idea of the type of RV before visiting a dealer, i.e. do you want a class A motorhome, class C motorhome, travel trailer, or fifthwheel. For an illustrated explanation of the differences, check out our illustrated file on RV Types.

Reading through some of the entries in our Glossary of RV Terms might help familiarize you with some of the features and options on an RV and the respective terminology.

The next step would be to visit various manufacturers' and dealers' web sites before leaving home. It's also important that you do a little homework on prices before you arrive. One source for retail pricing is the NADA price guides. You can also email dealers to ask for price quotes on a specific model.

Manufacturer's Suggested Retail Price

New vehicles are shipped from the manufacturer with a label stating the base price, the price of all options and delivery charges, and showing a total manufacturer's suggested retail price (MSRP). On cars, the label, about the size of a letter sized sheet of paper, is often glued or stuck to a window, giving rise to the term sticker price. In the case of RVs, the sticker is often not physically stuck to a window, but will likely be laying on a countertop. If the sticker is not visible, insist on seeing it before making any offer or deal.

Be aware that few people pay the full MSRP or sticker price. Typically, there are huge profit margins built in, and you should be able to purchase an RV at a significant discount from the MSRP. The actual discount will vary between makes and models and between dealerships. Discounts reported by buyers are in the range of 25-30%. Most dealers won't volunteer the discount, but you should figure it into any offer you make.

The sales dance

When you go into any car or RV dealership in the US, the salesmen are like flies around cow dung. However, once a salesman starts working with you, others will back off (or be told to). There's an unwritten code that they don't "steal" another sales person's customer, and a salesman will protect his turf.

RV salesmen get paid mainly (or entirely) on commission, but that shouldn't affect your bargaining power. The salesman might try to get you to pay some price, but it's never his decision. You'll be making a written offer and signing a sales contract, and that's when you put in your lowest bid. The salesman has to take the offer to his boss.

What usually happens next is either the salesman comes back and says "they didn't accept it", or his boss comes out and tries to get you to make a higher offer. You then have a choice - make a higher offer or walk away. If you've done your homework ahead of time, you'll know what it's worth and how much you're prepared to offer. If you've made what you believe is a reasonable offer and it's turned down, don't be afraid to walk out. That's when you'll find out what they'll really sell it to you for. They might come running after you, or they might call you back a couple of days later, so be sure to leave a phone number or some way to contact you.

You should try to avoid this dance on your first day in the US &/or your first visit to a dealer. Don't take any money with you and don't fall in love with the first RV you see. Don't make any offer, but tell them you'll think about it. The standard line all car & RV salesmen are taught to say next is "what will it take for you to drive away with this vehicle today?" Just be firm and say "I might see you tomorrow, maybe not", then walk out.

Buying anything that has wheels in the USA is different from, say, the UK, and somewhat more stressful. But, do your homework, don't allow yourself to be forced into signing anything, and remember that it's your money, so you're in charge. But, once you sign and hand over your money, they've got you. Be sure to add a note to the sales contract saying that the sale is subject to your satisfactory inspection and subject to any and all problems being fixed by the dealer. Don't hand over all your money unless/until they're all fixed, although you'll be pressured to do otherwise.

Most or all of the above dance would be eliminated if you were purchasing a used vehicle from a private party. However, it's still up to you to negotiate the best price.

Paying for your RV

When you've chosen (or ordered) your RV and signed a purchase contract, the time will come to lay down your hard earned cash. One of the issues for people from outside the US is how to get their money here and how to use that money to pay for their purchase. There are several ways of doing this, including:

  • Opening a bank account account in the US and wire transferring the money to your account. You'll have a check (cheque) book that will allow you to write a check (cheque) to the dealer.
  • Wire transferring money direct to the dealer. This can be a little clumsy, especially if the dealer wants to see his cash right now. Some dealers may not accept the promise of an overnight wire transfer.
  • One method that some people have found acceptable is a foreign exchange broker such as World First.

Do not under any circumstances be tempted to carry large sums of cash into the US. There are restrictions on how much you can bring in and special reporting requirement for amounts over $10,000. Failure to comply with the requirements and being caught will look like you're trying to launder money, and will have severe consequences.

Warranty

Virtually all new RVs come with a manufacturer's warranty. However, warranties differ from manufacturer to manufacturer in, for example, the legth of warranty, and whether both parts and labor are covered. Be sure to read the manufacturer's warranty before considering the purchase of an extended warranty.

Appliances such as TVs microwaves, washer/drier, stove, and others may not be covered under the RV manufacturer's warranty, but will have their own warranty from their respective manufacturer.

Almost all dealers will try to sell you an extended warranty, and will often use the line that you have to buy it at the time of purchasing your vehicle. Be advised that most of these warranties are nothing more than an insurance policy, and the dealer usually makes a huge profit if they sell you one of these policies. You can buy the same or equivalent policy elsewhere for a lot less money. If you plan to drive or ship your RV home before the manufacturer's warranty expires, then the extended warranty is irrelevant.

State & National Laws, Fees and Taxes

Unlike many other countries, the US Constitution grants significant powers to individual states, while also retaining some powers at the Federal level. This can all be a little confusing for visitors, but hopefully we can unscramble some of it and make it somewhat understandable.

State Laws, Regulations & Requirements

States establish and enforce their own laws with respect to driver licenses, vehicle registrations, sales tax, local speed limits, and much more.

Sales tax

Sales tax is payable on the purchase of an RV in many, but not all, states. Retail prices, MRSP, sticker prices, etc typically do not include sales tax, so you should figure that as an additional cost when you budget for your purchase. In states that charge sales tax, it will be significantly lower than Brits or Europeans are used to paying as VAT. The tax varies by state and often by county, but the approximate tax rate for Florida is 6% and California is 8.25%.

Sales tax can be (legally) avoided if you either purchase an RV in a non-tax state or arrange for delivery in a non-tax state. If, for example, you purchase an RV in California, you could take delivery in Nevada and pay no sales tax. If you request this option, the dealer will arrange for a delivery driver to drive your coach across state lines, hand over the coach, and have you sign the paperwork required by California. There will usually be a fee for this service, which essentially pays for the driver's time.Drivers Licenses

States have different requirements for drivers licenses. Typically, they require a driver to be licensed in that state within some number of days after becoming a resident. States also reciprocate when it comes to accepting drivers licenses issued byother states and the driver is merely visiting for a short time. Anyone thinking about obtaining a drivers license in a particular state should check that state's DMV (Department of Motor Vehicles) web site. Most follow the format: http://www.dmv.ca.gov, and you can just substitute the 2-letter abbreviation for the state of interest in place of 'ca' in this example.

Most buyers from outside the US are not residents of any state and, in fact, could not obtain a state license in states that require proof of residency. A number of states accept an international driving permit. At the time of writing, California's position on drivers licences for foreign nationals states:

The State of California does not recognize an International Driving Permit (IDP) as a valid driver license. California does recognize a valid driver license that is issued by a foreign jurisdiction (country, state, territory) of which the license holder is a resident. The IDP is only a translation of information contained on a person’s foreign driver license and is not required to operate a motor vehicle in California.

So, it's important to check the individual state DMV web sites for more information.

Those state DMV web sites will also have the respective state vehicle and driving laws. You could spend a couple of years reading them, but you'd go crazy in the process.

Triple towing, sometimes called double towing, involves towing more than one trailer behind a vehicle. For example, towing a boat or small trailer behind a car which is being towed behind a motorhome. This is legal in some states, but not others. Where legal, the state may require a commercial drivers license.

Some states require a commercial drivers license to drive an RV over 40 feet in length. In practice, there are many folks driving RVs longer than 40 feet on a standard drivers license, and there have been very few reports of prosecutions.

Vehicle registrations

All states require registration of a newly purchased vehicle, whether the vehicle is new or used (second hand). However, registration is required only in one state, and other states reciprocate in recognizing registration of other states unless/until you change residency or start working in another state.

Registration fees are comprised of several components. The details and fees will vary by state but, as an example, you will likely pay a registration fee and a license fee, and possibly several other fees.

If you buy new or used through a dealer, the dealer will usually handle all the registration details, file the necessary forms and collect the applicable fees. If you purchase from a private individual, you'll need to visit a DMV office to register the vehicle, change the title to your name, and pay any fees.

Technically, sales tax is part of, or closely tied to, the registration process. If, for example, you bought a used RV privately you wouldn't pay tax to the seller. But, when you try to register the vehicle in a taxable state, the DMV will collect sales tax on the purchase price.

When you've registered your RV and paid the applicable fees and taxes you'll receive the title document, affectionately called the pink slip. This is your legal proof of ownership and you will be required to counter-sign it and hand it over to the buyer should you decide to sell the RV in the US.

California has a useful online RV and Trailers handbook. Other states probably have equivalent online documents.

Insurance

In addition to the obvious need for for insurance, most states will not allow you to register vehicle unless you can show proof of insurance.

Insurance for newcomers to the US will be expensive, mainly because you won't have a driving record here. However good your driving record back home, it won't count when you apply for insurance in the US.

Montana LLC

A Montana LLC is a limited liability company that is set up in your name, or a business name, in the state of Montana. The LLC then purchases and owns the RV. One reason for establishing an LLC in Montana is that vehicle registration fees in that state are significantly lower than most other states. A lawyer's office establishes the LLC and registers the RV and any other vehicle, such as a toad, for a fee.

Some states have challenged the use of an LLC in another state such as Montana, and have successfully prosecuted people who used this approach to avoid paying registration fees in their home state. However, as a visitor to the USA, you probably own no real estate here, aren't employed here, and therefore have no ties to any state. Therefore, it's unlikely that a state can claim you as a resident or claim that you are avoiding their registration fees.

Many people are under the mishapprehension that having a Montana LLC, and having the LLC purchase an RV, eliminates the requirement to pay sales tax. This is a total fallacy; As explained in the section on sales tax, the tax is levied by the state where a vehicle is purchased &/or registered. A Montana LLC purchasing and registering an RV in California would pay the same sales tax a non-LLC purchaser would pay.

Federal Regulations

Federal law imposes a maximum length of 65 feet, which is not an issue unless you happen to be driving a 45 foot motorhome and towing a long car or trailer.

US Customs and Immigration are now under the Department of Homeland Security, but we'll deal with each aspect separately.

Immigration

Most visiting foreigners obtain a B2 visa in their passport prior to leaving home, which allows up to six months stay. Shorter duration stays may be covered under the visa waiver program. In the event you need a visa, be sure to apply well in advance of your trip. Expect to have to visit a US Consulate for an interview prior to the visa being issued. Check the US Consulate web site in your country for details and rules.

If you plan to stay and tour the US for an extended period, be sure not to exceed the B2 visa limit, currently six months. If you need to stay longer, you will need to exit the US, e.g. by visiting Canada or Mexico, and return to the US for an additional six months stay. However, be advised that, irrespective of visa status, entry to the US and the duration of stay is at the discretion of the Immigration Officer at the port of entry. There have been reported cases of visitors returning to the US for multiple stays being denied entry.

Some visitors wanting to extend their stay have filed a Form I-539 (Extension of stay) while still in the USA; They get an automatic extension of up to 8 months (total of 14 months) while their application is considered. Click here for more information from the official source.

The US Customs and Border Patrol web site has some useful fact sheets. Click here.

Customs

The best and only advice I can give is to answer all questions honestly, but don't offer any additional information. Be knowledgeable of allowed goods and limits before you arrive, and prepare a list in advance that you hand to the immigration officer. I have found over many years of international travel that the prepared list avoids a lot of unnecessary questions and delays. Do not try to hide or smuggle anything into the country; Not only will it be confiscated, but you could find yourself denied entry.

Factory delivery

Most buyers go to a dealership, see an RV they like, and purchase on the spot. However, there have been countless reports by buyers that after-sales and warranty service at dealers was unsatisfactory. This is compounded if you have left the town where the dealer resides and are, for example, touring the USA.

With planning, and given the necessary time, a better option would be to take delivery at the RV manufacturer, either at their factory or at their nearby factory service center. You'll still purchase the RV (place your order and pay your money) through a dealer, but you'll physically take delivery at the factory service center. One advantage of this option is that the factory assigns technicians to you for the duration of your stay, you get to live in the RV for several days and get to discover any problems or defects, and you don't leave until the issues have been corrected.

This option will only be available on a new RV, and will require you to order the RV and wait approximately 6-8 weeks for it to be built. You cannot take factory delivery on an RV that has already been delivered to a dealer. There will usually be an additional charge for factory delivery, maybe $1,000-$1,500, but partially offsetting this will be a savings in dealer delivery charges. Since you'll be ordering the RV, you'll have the added advantage of being able to specify the options you want/need, rather than taking what's available at a dealership.

Towing a car

Many motorhome owners find it convenient to tow a car for local transportation on arrival at a campground. Not all cars can be towed without modification, usually due to the lack of lubrication of an automatic transmission. Most, but not all, manual transmission cars can be towed, and most 4 wheel drive vehicles can be towed. Before purchasing a car intended for towing behind a motorhome, be sure to check out the resources linked in our article on towing a dinghy

Brits intending to ship the RV back to the UK.

Read about how to import an RV into the UK here

When your RV eventually arrives in the UK you'll be faced with the issue of incompatible electrical systems. We have a file in our library that explains how to convert RV electrics for use in the UK.

Canadians buying in the US

Read more detail specific to returning Canadians here.

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