Last fall I experienced my first vehicle break-down since hitting the road, and repairs ended up costing more than my truck was worth. The whole ordeal made me rethink the idea of an emergency fund and ultimately, expand on it.
Most experienced full-timers tote how important it is to have an emergency fund and I do agree. I’m very glad I had mine as it more than covered the repair bill, but while $6,000 fixes a lot of things, it would not have been enough to replace Bertha with a vehicle similar to what I had when I started full-timing (she cost $10,500 in 2011 with 87k miles).
I got lucky that I actually did have enough where I could have replaced Bertha if I’d wanted to. Repairing made more sense in this particular situation, but it was an option. An option I wouldn’t have had had I been relying on an emergency fund alone.
Being a saver by nature, I’d been collecting the money from birthday and Christmas presents from my parents and the extra saved after my particularly good earning year in 2015 – essentially treating it as a secondary emergency fund. In my mind I hadn’t called it a vehicle replacement fund, I’d just known I’d find a good use for that money someday. A couple readers chimed in on my original posts about the break-down with the idea of a vehicle replacement fund, which really resonated with me.
There are several ways a replacement fund could work, but what I’ve tentatively decided on for myself is this: I’d keep enough set aside so that it, together with my emergency fund, could replace either the Casita or truck.
Some people might want enough set aside to replace both vehicle and RV, but Casitas last pretty much forever as long as they’re taken care of and I’ve already replaced the most expensive thing that can fail – the fridge (plus I’m still toying with the idea of downsizing to something smaller at some point). I’m more concerned about the truck, which will hopefully have a couple more good years in it now that the head gaskets have been replaced, but at 172k miles it’s only a matter of time until something else expensive gives out. In the event of an catastrophic accident, my Casita has full-timers insurance that will replace it at the price I bought it for ($9,000) and not the amount it’s valued at currently, this fund is more about end-of-life replacement.
Is a vehicle replacement fund necessary for full-timing? I’d say it depends on a lot of factors, such as how new your equipment is, how long you plan on being on the road, how long you feel comfortable driving a vehicle before replacing it, and how handy you are.
I’m friends with a vandweller whose vehicle was made the year I was born. She’s good at mechanical work and even though she regularly spends more on repairs than the van is worth, she loves her van and enjoys the challenging of fixing it. She bought it for $1,000 three years ago and has lived in it since then and it’s worth more now that it was upon purchase after the improvements she’s made. For her situation, she has a big enough emergency fund to replace the cost of the vehicle easily and having a separate balance for vehicle replacement would be silly.
For my situation and the way I full-time, it makes more sense.
I don’t like fixing things myself and while I handled being stranded pretty well, it certainly wasn’t my favorite day on the road. I’d rather replace a vehicle when it gets to the point of becoming unreliable and not have to worry about being stranded again, instead of finding joy in seeing how long I can keep something running. Many people like risks even less than I do and would want to replace their vehicle after it reaches a certain age, has a certain number of miles, or when it stops looking nice.
It’s a matter of preference and there definitely is no one-size-fits-all solution to the problem of aging equipment, but I feel better having enough squirreled away to know that I won’t be forced off the road when Bertha is no longer drivable. New full-timers will want to give some thought to this idea even if their equipment is newer because it takes time to save up enough money to replace a vehicle. If you’re going to have one, it’s better to start saving sooner than later.
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