RV sales are through the roof. Is this a good time to buy an RV? Probably not.
2020 is proving to be a very interesting year, to say the least. We were all poised to enter a major recession as it was, as car sales and RV sales plummeted in late 2019 and early 2020 - usually a sure sign of impending recession. Not only that, but consumer debt was at an all-time high, and our government was running record deficits. The stock market was starting to slow down and it looked like our eleven-year bull market was coming to an end.
Usually, declining RV sales are a sign of a recession. When the virus hit, you would think this would be be the nail in the coffin for RV sales. But at least temporarily this is not the case.
People still want to go on vacation, but there are fewer choices. Cruise ships are out - even if they were available, few people would want to go on them. Similarly, flying anywhere seems like a bad idea, trapped in a tiny metal tube with hundreds of other people coughing on you.
Many people have decided to try out the RV lifestyle, and sales are up 50% over the same month last year. This is good news for the RV business, but perhaps bad news for consumers. It is always a bad idea to buy things at the same time as everybody else, as you have lost all of your leverage, in terms of price negotiation.
Not only that, but these people rushing into the RV world may discover quite quickly that it's not what they thought it was. They may be shocked to discover the quality of an RV is nowhere near that of a car, for example. And they may be upside down on their RV loan, and unable to get themselves out from this commitment.
But having owned RVs for 30 years now, I can understand why people are attracted to the concept. It's nice when traveling always to have a clean bathroom and kitchen, as well as your own refrigerator and your own bed with you at all times. You always have a place to relax, and a table to eat at as well. You never worry about where your next meal is coming from or where you are going to stay that night - it's all with you.
So it seems like a good idea to buy an RV right now, as you can take the whole family on vacation without having to worry about getting germs from other people - right? But sadly, like so much else in this Corona madness, it seems like we're all doing the same things at the exactly the same time. And the lemming approach or the herd approach to life never results in an optimal outcome. So what to do?
As I noted before, renting an RV is probably a good idea to try first. You might discover you actually despise RVing and you could save yourself an awful lot of money and hassle if you rent an RV first and discover this, rather than drop $50,000 to $100,000 on an RV and find out that you hate it. Of course, one of the problems is that probably everybody else has the same idea and they are also renting an RV right now.
Another approach would be to wait a year or so. I think a year from now this Corona Virus hysteria will have died down quite a bit, and people will have returned to a more normal mode of living. Maybe this means you can't go on vacation this year, but then again we all have to make sacrifices. Making small sacrifices usually ends up in saving a boatload of money.
The upside would be that next year you'll find all those people who rushed out and bought RV's this year will probably be trying to unload them, as they discover they don't really like RVing, as the cruise line they normally travel on is now offering discounts, and thus they go back to cruising or Disney or whatever. Moreover, the RV dealers might be a little more desperate to make a sale and offer better prices than they have to, today.
But with sales up as high as they are right now, it has all the makings of a bubble. And you never want to buy anything during a bubble, whether is real estate or cars or stocks or gold or Bitcoin. As soon as everybody is talking about it, thinking about it, and doing it, it's a good idea to run as fast as possible in the opposite direction.
I suspect the people rushing out to buy RVs today are the same people who have a moldering hoard of toilet paper in their basement - another sound financial decision they made!