Let’s talk RV Camper purchasing and pricing trends in the world of RV’ing and RV Travel as we enter Summer 2022…
I’ve done a lot of thinking, reading and research over the past several weeks. As a result, when it comes to RV Pricing Trends and RV purchasing advice, I have some thoughts.
First, the FACTS:
As of Jun 4, 2022 – (Source: RV Industry Data) The average wholesale selling price for motorized RVs was $73,350 last month, down $3,068 (4%) from the previous month. Figures from Black Book market analysts said towable RVs came in at $20,883, up $522 (2.5%) from April. A year ago, the average motorhome sold for $64,474 and the average towable RV went for $22,214.
Analyzing the RV Industry Pricing Data
Lets put the data shared above into perspective and apply some other facts and observations I’ve compiled. Motorhome prices are declining – rapidly (4% in ONE month is a big drop.) This is in part a return to pre-covid pricing levels and demand. It’s happening quickly however due to rapidly rising fuel (and other) costs.
Recall that used campers actually INCREASED in value over the past two years. This trend could NOT continue forever and as I expected, its reversal is occurring – as noted, rather rapidly.
Fuel prices are definitely impacting demand for RV campers
The RV industry is facing serious head-winds as fuel prices SKYROCKET and consumers’ disposable income dries up. As I write this, the national average gasoline price is just about 5.00/gallon – an unprecedented level we’ve never seen before. Oh, and YES, its INTENTIONAL and it is harming the American consumer, I believe in ways we’re just beginning to detect.
As fuel prices rise, not only is RV travel becoming much more expensive, delivery of food and products is becoming more costly as well. By now, almost everyone is feeling the pinch as food prices rise (that is, when you can GET food!)
Credit Cards and Credit Card Debt
I believe credit cards have served as a “buffer” to “lessen the impact” of rising fuel and food costs. According to Yahoo News in early June 2022, more than HALF of all consumers have $1000+ debt held on credit cards (and we all know the interest rates charged on these cards), with significant numbers having more than $5000. in debt and some even over $10,000. debt!
Reports suggest people are charging food and fuel and then making minimum monthly payments (again at HIGH interest rates.) While this is enabling them to make things “appear” normal, at some point they will max out their cards or get themselves in deeper trouble via missed payments. When that happens, some of our fellow countrymen will learn what life in Venezuela has been like for the past several years.
Demand destruction is a new term in the American lexicon. Rising prices are forcing Americans to abandon their RV travel plans. Those with RV’s are travelling shorter distances and those without are abandoning the market. Recent data suggests fuel consumption is down 5%. This is almost inevitably a reduction in leisure travel – and MOST RV travel is just that – leisure travel.
An anecdotal observation regarding RV Travel
This morning, Saturday Jun 11, 2022, I traveled from Edgemont, SD to Casper, Wy – a distance of about 170 miles. Reflecting upon this mornings drive, I passed/encountered VERY FEW travelers in RV campers (of any type.) While this is completely unscientific, its also “prime time” for this region to experience LOTS of RV travel.
In a conversation with Jake of Outlaw RV Repair in Casper, Wy., he shared that calls for RV repairs are down this spring. This confirms to me that fewer RV’ers are hitting the road as much of his business comes from travelers. Its clear also that many RV’ers are not even taking their campers out of winter storage.
Still in the market for an RV? RV Buyers ARE Drying Up – but NOT in all “categories”
In recent conversations with RV salesmen from across the nation, I learned that fewer buyers are presenting themselves to RV dealerships – some sales people have reported 15-20% (or greater) declines in sales in contrast to last year at this time. These same salesmen also noted they’re taking MANY inquiries each week about potentially selling their current camper to the dealership (who by now are back to offering bottom dollar for such purchases.)
Just a quick note – Thinking of buying (or selling) a RV? Want a guide by your side, who also has your back? Check out my Concierge RV Buying and Selling Service – and be sure to read the reviews at the bottom of the page!
What RV loans REALLY cost…
Buyers who have had new campers on order have cancelled orders – especially as they learn that 2023 models are now pricing at 10-17% higher MSRP prices than 2022 models. Combine this with higher interest rates being offered potential RV buyers. The BEST rates you can hope to get are around 5.5% (with 800+ credit scores), even if your score is really good, about 750, because RV loans are RECREATIONAL loans (ie – a luxury, not a necessity), your rate may be a lot closer to 8% (or more!)
As an example, If you were to borrow $50,000. on a 12 year loan (a typical RV loan term) at 8% interest, you’ll end up paying a whopping (approx.) $28,000. in interest, so that $50,000. loan is really costing you about $78,000! Incidentally, your monthly payment will be about $541.
Tip: Buying new is not often a good choice, and now with demand dropping, new campers will return to their traditional pattern of depreciating rapidly. Most of the clients I work with buy used – and my goal is to get them a used camper in “like new” condition at a cost significantly below what a new camper would cost.
Still yearn for the RV Life? It’s not all doom and gloom… (In fact, I still ENJOY it!)
Recently, I’ve been able to get some deals for my Concierge RV Clients – especially in “categories” of RV’s that are not currently in demand. My clients wisely rely upon my counsel to look for specific types of RV’s, specific manufacturers and specific years to get the best deals as the marketplace shifts. Incidentally, I negotiate the best possible deal for each and every client!
For example, while there ARE many sellers, especially from the “class” of 2020 and 2021, for those who bought new campers, first, many of these campers are “covid campers” which means they were built when employers didn’t know who was going to show up for work from day to day. The end result was poor quality control (and as my readers know, I view the build quality of many campers as sub-standard to begin with!)
RV’s are typically for leisure travel – but not always!
Historically, RV’s are used for leisure travel, however in recent years, there has been a trend towards more folks hitting the road and “full timing” in a RV. While what follows is a “seat of the pants” generalization on my part, I believe I’m onto something – but I welcome your feedback below to support or counter my thoughts.
Technological advances have enabled folks (like myself) to go full time as Internet access (almost anywhere) allows you to conduct business as if you were in an office somewhere. This group of travelers enjoys the “nomadic lifestyle” while maintaining an income stream “on the road.”
Another group of “full timers” is emerging however. I believe that this group explains the RISE in trailer prices as larger travel trailers and fifth wheel trailers meet their needs and hence are in demand. These are folks who are getting pushed (or forced) out of their homes/apartments due to rising mortgage costs/taxes/rents.
These folks need SOMEWHERE to live and many are opting to buy trailers to live in at campgrounds – effectively becoming permanent residents for fees (that at least for now) are significantly less than their prior rent or mortgage costs.
Bottom line: Campers in demand and NOT in demand
As camper sales decline at rv dealers and more campers come up for sale – particularly from those who bought in the past few years, the TWO areas I see demand continuing is larger trailers (travel trailers and fifth wheels) and Class A campers. I don’t believe the Class A demand has been great enough to offset the decline in buyers for Class C and even class B motorhome campers.
As noted earlier, for my Concierge RV Clients, I am making lower offers for smaller trailers and for Class C and even Class B campers. There is still life in the Class B market, so it comes down to floor plan and price point.
So, there you have it. This is the state of affairs in the RV industry as I see it in mid-June 2022. If fuel and food prices continue to rise (and I expect they will) the trends we see now will simply amplify – particularly until the consumers credit is completely exhausted. If and when that happens, all I can say is I’m glad I reside in rural areas.
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