The RV Dealership “Bloodbath”. Lower Prices Incoming?

It certainly looks like the boom in RV sales and purchases is coming to an end.

RV sales was already growing and doing pretty well leading into 2020. But, the whole pandemic thing really sent it into hyperdrive. Travel habits changed and suddenly a lot of people realized that RVs were a great way to continue to travel and see the country.

But, at the same time as demand increased, we also saw major supply problems. Supply chain issues, labor shortages and shutdowns all made things more difficult for manufacturers to keep new rigs on the lots.

And, as you know, when demand increases and supply decreases, prices go up. And, man did they ever! RV prices skyrocketed. And they’re still pretty high. You can easily go to a dealer lot and drop $40K-$50K on a super basic trailer. Literally nothing special whatsoever and not even very large… and you can easily saddle yourself with a massive bill to get it.

Frankly, it makes no sense to buy anything right now. It really doesn’t.

Especially when… the bubble is bursting.

In fact, the RVIA is reporting a 46.4% drop in wholesale RV shipments over last year. Towables are down 53.3% and motorhomes are down 14.4%.

Not only that, but dealerships are flush with inventory right now. They still have a ton of 2022 models sitting on the lots. And they’ll need to move that inventory out of the way before taking on new stuff for 2024 (not to mention 2023 models).

Why RV Prices Will Drop

There’s several issues that are driving prices down again…

First, there’s the high interest rates on loans. According to LendingTree, your absolute lowest rates right now are going to still be over 6%. More often than not, however, you’ll be between 7% and 8%. When you combine these high rates with the already sky-high prices of brand new rigs, it makes even the monthly payments downright stupid.

Unfortunately, too, if you try to make the smarter decision to buy a used rig and can’t pay cash, then either you’ll find you can’t even finance it at all or the rate will be much higher.

Secondly, the high prices scared many people off. The resulting drop in demand is naturally going to bring prices back down.

And lastly, as mentioned… there’s just too much inventory.

So, we have literally a reverse of what drove prices up to begin with. Supply went up and while demand went down. Prices therefore fall.

All this to say…

If you’re in the market for an RV, I have two recommendations for you.

Advice #1: Buy Used

Seriously, buy a used one.

There’s not much that depreciates faster than a brand new RV. They drop in value like a falling rock. You’re basically just burning money to buy one, frankly.

And you couple that with the high rates you’re getting locked into right now and it just makes no sense at all. At least in my opinion.

I think the “sweet spot” for RVs is after 5 years old. Maybe something between 5-10 years. It is usually still in pretty good shape and most of it’s rapid depreciation is behind it.

And don’t hesitate to buy something even older than that. Keep in mind that, many times, the older RVs are better built than the new ones.

Either find an alternative means of financing it or, if you can… pay cash.

But, if you absolutely just want a brand new RV, then…

Advice #2: Wait To Buy

In some place, prices for RVs on the lots are already dropping. And I think more decreases are coming as they need to clear out their inventory.

Be aware, though, that the situation manufacturers find themselves in could result in them cutting costs on quality even further. You may find yourself looking at lower-quality rigs with more flaws and cheaper materials. Manufacturers need to find a way to keep things profitable while trying to keep purchase prices attractive. It’s a tough place to be, really. Inflation increases costs while consumers want lower prices.

So, keep an eye out. You may be able to find good deals on new ones (relatively speaking). Just be careful.\

Buying An RV In 2023? Here’s How To Get The Best Deal

And again, if you buy used, you avoid all that headache.

And BTW, if you think new RVs don’t break much, think again. New RVs can (and often do) end up spending a lot of time sitting in lots waiting for warranty service. So, trust me, in many, MANY cases, you’re not exactly saving yourself any headache by buying new.

Yes, warranties help. With an older rig, you’ll have to fund any repairs on your own. However, in a lot of cases, I just find they don’t break down as much as you think they might. Especially if they have been fairly well maintained.