As you might imagine, the past year has been no barrel of laughs for the RV industry. If Hollywood ever makes a feature film about this era, it will fall squarely in the “disaster” category. There’s been a perfect storm of events that have conspired to kill new RV sales.
If skyrocketing fuel costs were not enough, there’s also the small matter of the global credit and banking crisis. Willing buyers with good credit have been unable to obtain loans. And the plunging stock market has hindered many a retirement plan. It’s tough to buy a new RV when your stock portfolio is emulating an Acapulco cliff diver.
The result has been a severe contraction of the industry. Business is shrinking like a cheap cotton t-shirt. Many quality dealerships have gone the way of the Dodo. The same holds true for many manufacturers. Even those who are surviving are doing so through layoffs and cutbacks. Elkhart, Indiana — the heart of American RV manufacturing — boasts the highest unemployment rate in the country.
But have no fear. Help is on the way!
Or is it?
My wife in Buenos Aires. No word on whether the stimulus package applies to shoes.
The much discussed and hotly controversial $875 Billion stimulus package includes provisions to help the RV industry. Here’s a breakdown of some of these goodies. If you want detailed information, you’ll need to call your accountant. My pencil-pushing skills only go so far.
According to the provisions of the new stimulus bill, if you buy a NEW motorhome between now and December 31st, you will be able to deduct a portion, up to about $4,000 worth of the sales or excise taxes. This cookie applies to the first $49,500 of the deal.
To qualify, you must earn less than $125,000 a year individually or less than $250,000 a year jointly.
In addition, the stimulus bill includes RV consumer loans and dealer floor plan loans in the Term Asset-Backed Securities Loan Facility (TALF). They say this should ease credit and stimulate RV lending. I’m no expert on TALF (wasn’t that a sit-com in the 80s?) but apparently this means that dealerships and consumers will be able to more easily obtain Federally-backed money to buy new RVs.
But note that the new provisions do NOT include travel trailers or other towable RVs! This exclusion makes no sense whatsoever to me, as it obviously leaves Airstream and others out in the cold. But hey, I guess we’ve got to start somewhere.
In a future blog post (probably a video post) I will consider some of the costs associated with RV travel. While no travel is cheap, with RV travel you have an ability to control expenses. When people think about RV expenses, they often focus on gas prices. But to get a clear picture, you need to consider a lot more than the transportation cost. And when you do so, you’ll probably discover that RV-ing remains more affordable than booking flights, hotels, and restaurant reservations. In fact, the travel experts claim that an RV vacation typically costs quite a bit less than one which includes renting hotels and dining out every meal.
I’m sure we’ll be revisiting this story as the year progresses. But for now, if you are in the market for a new motorhome, I hope you found this article stimulating. 🙂
DODO…. ahhh I hope this is the bird and not what it says… grin… Dod-o-do is better choice?
LOL
It is not every day that one is called upon to spell an extinct bird.
But I’ve done a little research.
I am correct to say that many dealerships have gone the way of the “dodo.”
Meanwhile, our economy continues to go the way of the “doo doo.” 😉
I don,t know what to think right now. I have a friend (amazing as that might be) who was employee #27 at a large robotics company(they employed 1400 people 2mo ago).They now employ less than 400….. the big 3 being there biggest customers, came to them and dictated that the machining of all their parts can be done in China at a reduced rate. He has been with this company since 1982, as a machinist. He now finds himself pounding the pavement.
Good to see the big 3 taking care of the country this way, Hands out for money, jackboots laced up to give the boot to those that gave it to them.
Tax breaks for rv’s sounds good on paper but I wonder if the new RV’s coming out of the brand new cheaper to run plant in China will help ? Seems the wall-mart philosophy has moved into the automotive sector where next?
Doo Doo (I don’t mean the bird) is the stuf you buy at above mentioned retail chain who have a price chopper, waiting to chop you right out of a job………
The above oppinion is the sole responsibilty of myself (the poster) and in no way should reflect the oppinions of the of the web page creator and his lovely wife.
A2MadMac, we welcome all opinions that are respectfully expressed (as was yours), so no worries there.
My own armchair analysis of the stimulus bill is that it’s impact on RV sales will be modest. For anyone shopping for a travel trailer or 5th wheel, it does nothing. It only applies to motorhomes, and only to the first $49.5k of the purchase, and only to buyers in certain income brackets… and even then, it’s really just another buyers’ incentive. We’re ALREADY in a historic buyers’ market, so I doubt this one little tax cookie will unleash a huge wave of buying.
Low fuel prices — IF they remain low — will help. But the biggest hurdles facing the RV industry now are rock bottom consumer confidence and the frozen credit market.
With regard to outsourcing and China, it’s complicated, and I think the issue runs far deeper than Wally World. At the end of the day, Wal-Mart just distributes and sells products; they don’t manufacture products. At this point, if they refused to stock any product made in China, they’d have a bunch of empty stores. The horses have already left the barn (or however that old saying goes!).
With regard to the Big 3, here’s what I can’t figure out… In my home state of Alabama, there’s a thriving auto industry: Mercedes, Honda, and Hyundai all operate massive production facilities, employing thousands with quality jobs. How is it possible that those companies can do it, while the Big 3 cannot?
And now, I will finish on a POSITIVE note. The real upside for the RV industry and RV travel may be cost. Studies have shown that RV vacations COST LESS than other forms of travel. With an RV, you can control your expenses via your choice of where to camp, where to dine, etc. In tough economic times, the cost advantages of RV travel come to the fore.
Whew… heady stuff for our blog! But these topics are on everyone’s mind. Thanks for joining the discussion.
I like positive…..
Thats why I like TheLongLongHoneymoon ;o)
Thanks! I like positive too. I figure we’ve got plenty of places to hear bad news, so I’d like “The Long Long Honeymoon” to be a beacon of good news.
Someday I’m going to do a video about our very FIRST camping experience. (Yes, I brought a video camera.) We had a $40 tent and a couple of sleeping bags. We had the time of our life!