Sunday, October 21, 2018

Fiberglass RVs - A Different Way of Doing Business

Suppose instead of dicking around with a dealer, you just drove to the factory and bought your car?  That is the business model of most fiberglass RV manufacturers

UPDATE:  Read this article (in .pdf format) by a journalist who covered the RV business.  He became disillusioned after he actually bought an RV and realized how poorly they are put together and how the financing can bankrupt many owners.   He gives the industry 20 years, tops, before a massive reshuffling occurs.  Maybe a bit dramatic, but who knows?  Now you know why I am a fan of fiberglass RVs!

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As I noted in an earlier posting, we just put down a deposit on a 2019 Escape 21' travel trailer.   Like the 17' Casita we now own, it is what enthusiasts call a "fiberglass RV".

"But wait," you say, "Aren't all RVs made of fiberglass?"   No, not really.

As I noted before in this blog, most RVs are made of sticks and staples - literally.   When I went to install a new cargo door in our 27' fifth wheel, I was appalled that the structure of the thing was made of 1" x 2" soft pine "studs" which were literally stapled together (sometimes badly) at the factory.  The aluminum "skin" of the trailer was so thin, I was able to cut it with a razor knife.   I literally had the hole cut for this new cargo door in about 20 minutes, by hand.

Of course, not all RVs are made that way.  Our 21' Class C motorhome had fiberglass laminated walls.  Instead of a thin layer of aluminum, it had a thin layer of fiberglass, glued to luan plywood.  The coach had a sticker saying it had an "aluminum frame" but I found out later on that the frame was not entirely aluminum - the sticks and staples were used to fill in the middle parts and the bed over the cab.   Once the unit started leaking, all this cheap wood rotted out pretty quickly and the smooth fiberglass sides started to bubble up - a slow-growing cancer that cannot be fixed for less than the resale value of the coach.  You just live with it and hope it the RV outlasts the payments.

Fiberglass RVs, in contrast, are made of solid fiberglass, like a boat hull.   Usually there are two halves, a top and a bottom, joined together.   There is thus only one seam, and little chance of leakage.   The fiberglass shell is the structure and thus it does not rely on sticks and staples for framework, nor is the fiberglass some thin layer glued to plywood to look smooth, but actually provide little or no structure.

As you might imagine, such a building technique results in a heavier trailer - heavier than a sticks-and-staples trailer of similar size.  And since fiberglass is expensive, they cost more compared to a similarly sized sticks-and-staples trailer.   But since they are built like a boat, they can last for decades without wearing out, rotting out, or delaminating.   Our 17' Casita is just now pushing 20 years old and still looks like new.   You can't say that about many conventionally built RVs, period.

The history of the fiberglass RV is pretty interesting, but I won't go into it here.   There are a number of ancestors of this concept, from the Dodge Traveco motorhome (which you will still see parked in side yards, 50 years after they were built!) to the Canadian Trillum travel trailer and Boler travel trailers (both relatively small).  Another company, Burro, sold trailers complete or as kits.  U-haul even rented out small fiberglass trailers in the 1970's - today they are collector's items.   Two brothers borrowed the idea of the Boler and formed the Scamp trailer company in Minnesota.  They had a falling-out, folklore says, and one moved to Texas and started Casita.   There are a host of others, some old, some new - Oliver, Bigfoot (who also makes a fiberglass truck camper), Lil' Sleepy, and so forth.   Most are fairly small - the 21' Escape is one of the largest all-fiberglass trailers on the market.

But what all these trailers have in common (for the most part) is that they are not sold through dealers, but usually sold directly from the factory.  The huge fiberglass shells are expensive to make, so the trailers already are at a price disadvantage with the "sticks and staples" people in Elkhart, Indiana.  And since Elkhart cranks out a lot of RVs, they have the advantage of buying components in bulk and can lower their costs even further.   Traditional campers are sold to dealers (who have to borrow money from the bank to pay for them) and they sit in huge lots, row upon row, waiting for a sucker buyer to come buy one.

And since they offer E-Z money financing and have a salesman with a big hat and belt buckle, they can convince the plebes to buy these sticks-and-staples campers "on time" based on low, low monthly payment, often stretching on for decades.  And yes, most buyers end up "upside-down" on these rigs and most don't outlast their payments - or are pretty darn worn-out at least. 

Since the "sticks and staples" campers cost so much less to make, they often have fancier features - multiple televisions, slide outs, power levelers and so forth.  To the average consumer, who cannot perceive quality (which is a hard thing for anyone to do), counting the number of flat-screen TeeVees is the only way they have of judging the value of one camper over another.   Why would you want to buy some tiny fiberglass RV that doesn't even have a television, or a slide-out?  Heck, even the microwave is an option!

For many of these buyers, the sticks-and-staples RV seems like a dream - the interior is nicer than their house!   So it is not hard to see why they buy.

But to a certain group of people - particularly folks like us who have been down the "sticks and staples" road before - such fru-fru is not appealing.   What we are looking for is solid construction and less hassles and worries.   Fancy electronics and gadgets are fun and all, but when they break, well, you are kind of stuck.   At almost every campground we visit, there is someone with a fancy trailer or motorhome who can't leave the park because their slideout won't slide in, or the hydraulic jack stands won't retract.   So they wait for the "mobile RV repair" guy to show up and find the hidden fuse (yes, they hide them!) that blew or replace the seized hydraulic pump or slide-out motor and send the RVer on his way.

Or you could be like the single lady in the park we are in right now.   Her husband died and she decided to keep RVing.  She was ready to leave - had slid-in the slideouts and unplugged the electric.  Unfortunately, the rig had a "power inverter" and a battery bank (so you can watch your 110v television in the boondocks!) and she left the air conditioning and electric hot water heater on (and the fridge in AC mode) and it overloaded the inverter, which caught fire and burned the coach to the ground.   What was the point of the inverter again?   When camping becomes more about "bringing it all with you" and not "learning to live without" it misses the point - and gets expensive and frustrating to boot.

But getting back to finances, since most of these fiberglass RVs are sold from the factory, there is no "salesman" to convince you that you want one - or earn a commission.   There is no "E-Z money financing" offered at the factory (at least not at the one we went to) and the prices listed are the entire price, not some monthly payment.   Oh, and the price is the same price for all buyers - there is no haggling or negotiation.

Imagine that - a financial transaction where you put down your money and they give you a product, just like that.  No hassling, no haggling, no games, no hidden prices or rebates or discounts,  No bullshit.

This does mean, however, that if you want a fiberglass RV you actually have to want one.   It is not something you are "sold" on, but something that you buy.   So many RVers we see on the road were clearly "sold" an RV, often at an RV show or in a showroom, where people look at the amenities inside and don't bother to think about the monster they are about to drag home.  The same is true of boats - people buy them and then realize later they don't have a clue how to handle a 38-foot yacht.

And often, these folks are unhappy with their purchase, and if they can afford to, they unload it quickly, which is why you see a lot of boats and RVs for sale that are only a year or two old (either that, or they were repossessed).

And yes, this happens with fiberglass RVs, too, but for different reasons.  Since most are so small, some folks trade them in fairly quickly - within a year or two - as they cannot get used to living in a small space.  We are the third owner of the Casita - the first sold it within a year, as the wife couldn't handle the small space.  The second owner sold it after two years, buying a Canadian-made Award, which was billed as "the shape of things to come" but went bankrupt after a few years.  Again, space was the issue.  We've had it for about 15 years, which is a long time to keep anything.   People either sell them quickly or keep them forever - that seems to be the pattern.

And when I say that fiberglass RVs are expensive - relative to stick-built trailers - that doesn't mean they cost a lot of money.  Since they are small, they don't command huge prices.  We paid $8375 for the Casita - 15 years ago.   There was a guy in the campground in Malibu who spent $837,500 on a "Prevost" bus motorhome.  Poor guy was all alone with his possessions.  But he had a 50" television outside of the camper to "watch the game" with (he turned it on, full volume and then went inside for an hour.  Sweet!) - not to mention the two or three televisions inside.  And yes, the RV mobile repair guy had to come and unstick his leveller jacks before he could leave the park.   Rigs like that, you cant' even change a tire by yourself - you have to call someone.

The Escape will run about $30,000 USD, which is a lot of money to me, but a laughably small amount to most people.  An Airstream of equivalent size would run more than twice as much (maybe three times) and would be subject to dents, leaks, and clearcoat failure.   But a sticks-and-staples camper of the same size might cost only $20,000 USD, or for thirty grand, you could buy a larger one, with more slide-outs and televisions and whatnot.   And that is why you see so many sticks-and-staples "box trailers" on the road.

But nevertheless, we struggled with the decision for years.  Should we buy the new trailer or keep the one we have?   I am all-too-cognizant of the trend, in any hobby, where you buy the "ultimate" fill-in-the-blank of your dreams, only to find you've lost interest in the hobby about the same time.  I've seen this happen to people with boats, motorcycles, cars, and whatnot.   They finally buy the car of their dreams, and find out they've lost interest in cars, entirely.

So we approached the transaction with trepidation.  There was no salesman to encourage us to buy, no high-pressure sales tactics, no e-z money financing offered, no blaring signs on row after row of trailers with monthly payments advertised.   Indeed, their inventory was limited to four "demo" trailers in their showroom - each customer trailer is built to order.   So by the time we got to the factory, we had a very good idea of what we wanted and just wrote up the order.

Many of these fiberglass RV companies only build-to-order, and since they don't have huge advertising budgets, they offer owners small bribes ($100 or so) to show off their trailer to prospective customers (if the customer buys, that is).  They rely on word of mouth to sell product, and it is a very slow way to sell products!   But it is a very robust method - one that doesn't depend on high-pressure trickery to move product out the door.  As a result, the number of happy customers is higher - again, the only reason folks might sell a fiberglass trailer is that they can't deal with the small space, not that they are unhappy with the quality of the trailer itself.

And as a result, the resale prices on these types of trailers is pretty robust.   One reason con-artists on Craigslist like to use the Casita as bait is they they are so darn expensive in the resale market, and people want one, but don't want to pay for one - like so much else in life.  And that is one reason we decided to order a new Escape, rather than buy a used one.   We found only a few for sale used, and most were nearly as much used as a new one would cost (thanks to a favorable exchange rate with the Canadian Ruble).

But sometimes, we just have to laugh at ourselves for being so timid.   We are agonizing over a $30,000 camper, when the guy in the space next to us lost that much money in depreciation the day he took delivery of his poorly made fake "bus" motorhome, which is already starting to delaminate.

However, maybe it isn't such a bad thing to agonize over spending money.   And maybe buying something from the factory - and paying cash - is a better deal than going to "Smilin' Sam's RV lot" and signing your life away, after spending five hours in the closing room.

Maybe, just maybe!