Will the Stimulus Package Help RV Sales?

Posted In: Airstream, Blog, Fuel Costs

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.

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. 🙂

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