RV-Buying Boom a Sign of Consumer Confidence

The number of recreational vehicles delivered to dealers’ lots is expected to reach a six-year high in 2013, as fledgling RV buyers such as Karen and Jim Smith, of San Jose, Calif., shake off the economic slumber of the past few years and prepare to hit the road this summer.

“There are just so many things to see that we’ve never seen before: Mount Rushmore, the Grand Canyon, Lookout Mountain in Tennessee,” said Karen Smith, after writing a $21,000 check for her 18-foot 2014 White Water Retro Travel Trailer that came stocked with a queen-size bed, separate refrigerator and freezer, two-burner stove, microwave, full-size bath, shower and beds for three more people.

The Smiths represent new hope for a U.S. RV industry that sustained a series of body blows beginning with the 2008 recession but now appears to be rebounding.

The industry has not seen more than 300,000 RVs shipped to dealers around the country since 2007, the year before the recession took hold. But deliveries this year were up 11 percent in the first quarter, and the RV industry now expects to see a total of 307,300 deliveries of motor homes and towable RVs. Towables make up the overwhelming majority of RV sales in the U.S.

“Our industry is an economic indicator,” said Kevin Broom, spokesman for the Virginia-based Recreation Vehicle Industry Association. “When shipments go down, they usually go down ahead of a recession. When shipments come back, they usually come back ahead of the recovery. Consumers in general are a little more confident they’ll have their job this year, next year and even five years from now. So they’re ready to make a purchase.”

Some 8.9 million U.S. households – or 8.5 percent of all American households – now own RVs, representing a 7.9 percent increase from 2005, according to the RV association.

An estimated 5.8 million RVs were expected to be on U.S. roads and highways last weekend for the unofficial start of summer, according to another survey by the association. Only 34 percent of RV owners said fuel prices would affect their travel plans, compared with 58 percent last year.

The renewed interest in RV sales and travel is attributed to several factors: pent-up demand after nearly five years of sluggish sales, relatively high airline ticket prices and lingering low interest rates to finance an RV purchase.

With average gas prices hovering around $3.62 a gallon, according to AAA, RV dealers are quick to point out two factors to prospective buyers: Better technology gives even the bigger RVs improved gas mileage, sometimes 12 to 15 mpg, and the majority of RV owners take trips within 100 miles of their homes.

The bulk of RV purchases – 90 percent – are made by customers like the Smiths, who prefer lower-priced units that have to be towed, Broom said. Prices go up as the amenities and body sizes increase, from trailers to Class C “cab-over-camper”-style RVs built on a truck chassis, to more traditional-looking Class B motor homes, to high-end, rock-star Class A buses, which average $175,000.

El Monte RV in Dublin, Calif. does not sell RVs that have to be towed. But sales of the company’s most popular Class C units are up 10 percent from last year, said Joe Laing, the company’s marketing director.

El Monte RV’s customers typically rent a Class C model first, and can later apply the rent toward a future purchase, Laing said.

“Some people aren’t ready yet to jump in and start throwing money around,” he said. “As the recovery happens, the first people buy less expensive products and are a little more conservative.”

At See Grins RVs in Gilroy, Calif., which calls itself Northern California’s largest RV dealer, this year’s forecast of a 25 percent increase in sales couldn’t come soon enough.

The company opened in 2008 and struggled for three straight years while three neighboring competitors went under, said owner Randy Scianna.

With sales rebounding this year, Scianna said, “we’re going to be surrounded by competition again soon.”

The Smiths also bought a new Chevrolet Traverse SUV to tow their new travel trailer. And Karen Smith was back at See Grins last week, to drop off a $21,000 check and to have the brakes upgraded on the new SUV to handle the RV.

As Scianna headed out the door for a four-day, 140-mile trip with his granddaughters to Lake Tulloch in a 36-foot RV, Smith made her own plans to receive a two-hour See Grins tutorial to learn how everything works on the new trailer.

But within the next week or two, she and Jim and their two Chihuahuas planned to brave the roads for their inaugural RV excursion.

“At first, until we know how to operate everything, we’re going to stick close to home,” Karen Smith said. “But then we’re going to go see everything. I can’t wait.”

America’s RV Owners

• Average age: 48
• Median income: $62,000
• 39 percent have children younger than 18 living at home
• 80 percent plan to use their RV for sightseeing
• 54 percent plan to use their RV to visit family and friends

SOURCE: Recreation Vehicle Industry Association