In today’s blog, we’ll cover a fairly alarming RV development that will likely affect your RV’s value. We’ll also look at the latest travel data and emerging trends.
This Month’s Big Story
Dealer lots are full of RVs. I recently visited a local dealer and was surprised at how many new RVs they had on the lot. There was barely room to park. I also recently passed another local dealer where I purchased my Keystone Bullet a few years back, who had close to an empty lot a year ago. Their lot was full of new RVs. The change in the quantity of new RVs on dealer lots over the past 60-90 days is remarkable. The big question is will people show up to buy them?
I have a few theories on what could happen. First, the industry forecasts about continuing sky-high demand for RVs may be accurate, and all this new inventory will be gobbled up by an RV thirsty public. Let’s call this the optimistic view of the future. A second possibility is that people feel like they have less money to spend because of inflation, so fewer people will show up to buy RVs. Let’s call this the pessimistic view of the future.
Since both scenarios are very general, let’s explore a possible third scenario. This is where people with affluence, who can’t buy many high-ticket items due to shortages just now, continue to purchase higher-end RVs. However, less affluent people, who feel the effects of inflation more so, pull back on large purchases, including RVs. This would mean that higher-end RVs like Airstreams would continue to see long wait times for deliveries, while less expensive travel trailers would begin to pile up on dealer lots. To me, this is precisely what appears to be happening. It is a strange dichotomy in that most of the RVs filling dealer lots appear to be for the low to middle market, while expensive Class-B camper vans and Airstreams can’t be bought without very long wait times.
We will know much more by the end of May, but as we’ll see in a moment, there are a vast number of RVs for sale, likely more than ever. For now, these huge RV volumes may take a toll on the value of the RVs we currently own, as the price of used RVs is generally a function of the discounted price of new RVs.
Production Numbers
This week the RVIA posted the latest RV shipment data for March 2022, and the numbers are staggering. Volumes of RVs shipped are at an all-time high, with over 64,000 units shipped in March. As a point of reference, the next highest March on record was 2021, with just over 54,000 units shipped. A large portion of this record output is for travel trailers, as motorized RVs are subject to similar shortages as motor vehicles are currently experiencing. Besides expensive Class B camper vans, Class A and Class C motorhomes are down vs. prior years.
RV Trader
New and used RVs for sale on RVTrader.com are historically high, hitting over 227,000 units for sale. This is up 4,000 or so units since March 23rd. In 2021, the number shrank by 4,000 units over the same period, so one could surmise that relative supply vs. demand is +8,000 units year-over-year. This explains the earlier theory that too much supply of low to mid-level travel trailers is not being met by early demand and why we are seeing full lots at local RV dealers.
RV Quality Concerns
Meanwhile, manufacturing employment levels in Elkhart County, Indiana, are at an all-time high, making it very difficult to get and retain quality labor at many RV factories. Given the break-neck speed that RVs are being shipped and the ultra-low unemployment rate in Elkhart, quality concerns are a real issue for the consumer to contend with. If you are buying a new RV, be very thorough on your walk-through before purchase. If the unit is more expensive and you are not already a seasoned RVer, consider using a certified RV inspector to look at the new RV you are considering. Also, plan to do a shakedown trip early in the ownership process to get any warranty items taken care of with your dealer.
This past week I was able to tour an RV plant in Northern Indiana and witnessed first-hand the construction of new RVs. It was fascinating to watch these being built and the sheer amount of hard work that went into their construction. True, the workers were moving fast due to the pay construct of piece work, but after talking with a few line workers, it was evident that they were skilled and trying to do a good job. There are opposing forces in the equation, given that the pay construct rewards speed, and taking time usually means fewer errors. Another fallacy is that there is no quality control involved. At this location, several people were doing PDI (pre-delivery inspections) on the RVs completed coming off the line.
AAA
Gas prices are staying stubbornly high and haven’t retreated below the $4 mark nationally. In recent weeks the price of regular unleaded has actually increased. The current price as of April 28th was $4.141 per gallon, about 10 cents lower than a month ago but a couple of cents higher than a week ago. An RV trip of 3,000 miles at 10 mpg would cost $1,242 now vs. $866 a year ago, about a 44% increase.
Good News
Finally, there seems to be good news for those who work remotely with the advent of Starlink and the addition of roaming account access. This means you can sign up for Starlink service and not have to change your permanent address in the system when you move locations. Many Starlink users are seeing outstanding bandwidth from their system even in remote areas since the internet signal is satellite-based. Imagine working remotely from some of the most beautiful locations on earth that previously had no cell service and therefore were impossible to work from.
All the best in your camping endeavors!
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