By Len Souza, The RverAdvocate (05/2009)
The answer to this question, in my opinion is, a qualified YES. “Yes”, assuming that you have the means and that you are aware of the potential problems that you might encounter if you pursue such and action at this time. Please read on……………..
In spite of the current, severe, financial conditions, this question undoubtedly does present itself to folks who are RVers and may want to upgrade; or to those who are new to this hobby, or life style. This question (and its answer) needs to be considered in light of the current economic times and industry conditions. Everyone is aware of the major shakeup that is going on in banking, manufacturing, stock prices, employment, housing and yes, in those 401Ks that we were all depending on.
This turmoil has, of course, taken its toll on the RV Industry. To say that the RV market is soft would be a major understatement. Retail price discounts have never been greater, because the bottom has fallen out of motor home sales. Currently, through February 09 wholesale motor home shipments are off by almost 70% versus this same period in 08. And, sales in 2008 were off significantly from 2007 and the “peak year” of 2006. These are very bad times for the RV industry. Ten (10) manufacturers have shut down via bankruptcy. Several of these companies were major players and represented well-known brands in the RV business.
So is the RV business going to go away? No, of course not. However it is going to change in scope and the physical size of the typical RV vehicle is going to be smaller in the future. The industry is going to become “Greener”, for whatever that all entails. The trend towards bigger and bigger motor homes, with multiple slide outs and with an ever-growing list of gadgets and a growing list of automated features---is changing course. The economic realities facing today’s buyers and sellers will bring about these changes. Spending $150,000 for a gas powered motor home or spending $250,000 to $350,000 for a diesel powered unit—is now not as appealing as it was in recent years at the peak of the RV market. Here is why I say this:
First of all, the purchase of a motor home is an investment in a depreciating asset; a new RV will depreciate by 50% from the MSRP in 5 years after purchase. (It may be a house on wheels, but it is not a piece of real estate.) In a soft economy where personal wealth is shrinking, potential buyers can only view this as a negative factor.
The fuel efficiency of these vehicles is very poor and the cost of fuel is going to be trending upward, from now on. Even before the recent, near financial collapse of our economy, the $4.50 cost for a gallon of fuel had already taken a major toll on motor home sales and RVs of all types, in the previous year (20 08).
GLOBAL WARMING: Environmentalists, inside and outside of government look with disfavor on all so called, large, “fuel guzzler” vehicles. They are not viewed, as “Green” and some people don’t consider them to be appropriate in the world we live in today. Some people are calling for alternative fuel sources for automobiles, trucks, and buses -- and for RVs. (I recently spied a Small Class A, Fleetwood, “Hybrid” prototype, motor home on the freeway near Riverside, CA—the company is now in bankruptcy.)
We are hearing more and more talk about increased taxes on energy users, as a deterrent to the excessive use of petrol fuel energy resources. And how about the “Cap and Trade” proposal that is being bantered about in Washington? Under this foggy proposal, high-energy users would be paying a lot more federal and state taxes on their energy consumption in the future.
A new development. Last week the Federal EPA, received a Federal Court ruling that says they (The Feds.) are now going to be empowered to regulate “Green House Gas Emissions”---because they can create a hazard to people, the citizens of the US --via climate change. Scientists and the EPA have clearly identified six (6) green house gases that need to be monitored and controlled: 1.Carbon dioxide, 2.methane, 3.nitrous oxide, 4.hydroflouro-carbons, 5.Perfluoro-carbons, and 6.Sulfur hexa-flouride. Armed with this new mandate to protect our health and the Earth’s environment, I am afraid that the makers and users of autos, trucks and RVs are going to be receiving a lot of attention in the future from the EPA.
Many of the new RVs that are sitting on dealer lots today, are “Orphans”; the original manufacturer of many of these units are no longer in business or they are trying to restructure themselves in order to continue their product’s brand. This has to raise a big red flag for a potential buyer. The availability of warranty service, parts and someone who will perform the necessary service on these units, has to be a major concern for any buyer. (I raised this issue recently, with an acquaintance of mine who is in the RV media -- he discounted my concerns saying “anyone can service these motor homes, as most of the parts are “interchangeable”.) I don’t buy his contention; as usual he takes a “pro RV industry” position on any issue that I have ever brought before him.
So what is the RV industry doing to cope with these concerns and this business climate? They are going “Green” in their advertising and by designing smaller, lighter Class B and Class C units on small diesel chassis like the Mercedes Benz Sprinter. They are now advertising small (diesel) Class C & B RVs that get mileages of over 15 MPG and short, diesel Class A units that get over 10 MPG.
Two surviving RV companies have recently announced that they will perform service on motor homes whose manufacturers are no longer in business. This of course does not address the warranty service of these orphan coaches, as certainly a 3 rd party is not going to assume the financial warranty responsibilities for a coach that they did not produce. The RV owner is going to pay for this service one way or another. Recently, Good Sam/AGI has stated that they will sell a RV owner Extended Service Contracts that will somehow cover “any” New RV. The chassis and power train--plus the appliance warranties will of course continue, I assume, to be covered by makers of those sub-systems. But who is going to pick up the cost of the shell/house enclosure—the roof, the walls and the end caps?
So if you are in the market for a new or used motor home, take your time and evaluate the situation very carefully. And beware of the representations made by the RV salesperson and his or her manager. Get everything in writing, leave nothing to chance and don’t depend on any verbal representations in your transaction.
Ed Note: Len welcomes your comments and opinions, and can be reached at mbpete@verizon.net