Demand for RVs has not yet abated.
Black Book Principal Automotive Analyst, Specialty Vehicles Eric Lawrence said the group’s latest overview of the used RV market showed prices for travel trailers, fifth wheels and motor homes at record highs once again.
“Dealers are telling us they still can’t get enough new units to satisfy their retail demand and are relying on used models to keep sufficient inventory on their lots,” Lawrence stated.
The cycle continues to be driven by consumer demand for RVs. Lawrence said dealers are working to find any way they can to meet the demand, and that is driving auction bidding for used RVs to record highs over the past five months.
“There’s a lot of people getting their jobs back, there’s been some rebound, but a lot of them didn’t get a chance to take a vacation,” Lawrence said. “I think it’s a lot of repurposed money from vacations that didn’t happen, football tickets from games that didn’t happen. A lot of that money is being repurposed into other things.”
Lawrence said Black Book has seen similar trends in its marine and auto coverage, with demand continuing at high levels despite the pandemic and elevated jobless claims.
Black Book’s November report found for towables, which include travel trailers and fifth wheels, the average selling price at auction was $18,643 in September. That’s a 1.9 percent increase from August and up from $15,912 a year earlier.
On the motor home side, the report found the average selling price rose 2.4 percent from August to $57,641. The price was up from $48,361 a year earlier.
How long can elevated demand from consumers drive the market trends? Lawrence said it was difficult to tell, but with RVIA projecting sales of 500,000 units next year, and strength expected into 2022, it might be a while.
“Everyone is hoping and praying Covid goes away, and you hope that next year is better than this year Covid-wise,” he said. “But you never know. A lot of the underlying reason that caused the surge could be valid still next year.”
Lawrence referred to the last surge in production – one which took the industry a year to work through after manufacturers oversupplied dealers – as evidence of caution.
“Certainly once the new production can catch up with where it needs to be, that will play a big factor in the cost of used RVs,” he said. “The well is only so deep. At some point, there aren’t new used RVs in the system. You’ve got to have that trade-in or have the RV being sold to get in the system.”
One other potential boost to auction supply could come from repossessions. Lawrence said because of the pandemic, many lenders stopped or slowed repossessions of RVs – a major supply source for the auctions.
“Once that gets back up to normal, you’re going to take pressure off the auctions, which should lower the prices a little bit,” he said.