Over the last few years, RV sales have been a complete roller coaster. Consumers and manufacturers have been through corkscrews, loops, and steep drops.
To say the market has been anything but unpredictable is a significant underestimate. Between record-breaking shipments and decreased demand, it’s been incredibly chaotic.
However, the RV Industry Association recently released their prediction for RV sales in 2024. Surprisingly, it’s not as gloom and doom as you might think.
Let’s take a look!
New RV Shipments Tanked in 2023
The glory days for RV manufacturers and dealers were from 2019 to 2022. The demand for recreational vehicles went through the roof. Getting outdoors and going camping were more popular than ever.
As a result, RVs were practically selling themselves. Unfortunately, good things only last so long for those invested in the RV industry.
Throughout 2023, numerous led to the perfect storm for manufacturers and dealers. Manufacturers no longer had trouble keeping up with demand, and RVs were going unsold and sitting on dealership lots.
It wasn’t long before the data started rolling in, and things weren’t looking good.
Starting in January 2023, RV shipments plummeted from approximately 52,000 units to just over 20,000.
While there was a gradual increase during the spring months, it wasn’t nearly enough. The number of shipments was down almost 40% across the industry for the year.
What’s to Blame for Decreased Demand for RVs?
So, why are we seeing such a decreased demand for RVs? Sadly, there are a few reasons for this nightmare for dealers and manufacturers.
High Interest Rates
Starting in early 2022, the Federal Reserve began raising interest rates. From March 2022 until July 2023, there were 11 difference increases, with some more significant than others.
Many Americans didn’t start to feel the impacts of these hikes until 2023. However, once they began to feel them, RV sales and other luxury purchases came to a grinding halt.
The high interest rates caused many consumers to think twice about making large purchases, especially those they were financing. Higher interest rates make these purchases more expensive each month and over the life of the loan.
As a result, banks and lenders were much more cautious about whom they were lending money to. Because financial institutions see RVs as luxury purchases, getting qualified for an RV loan has always been challenging.
However, under these changes, financing required a nearly spotless credit history.
Increased Prices
Over the last few years, prices for RVs have climbed quickly. This is primarily due to the law of supply and demand.
The prices skyrocketed because RVs were in short supply and extremely high demand. Many hopeful consumers experienced sticker shock when they started shopping for their perfect rig.
Additionally, with increased prices and high interest rates, it quickly became nearly impossible for consumers to secure financing. Those wanting to jump into RVing had to wait until the market changed or save money for a larger down payment.
Oversaturated Market
In 2020 and 2021, many travelers purchased RVs instead of navigating travel restrictions. However, many discovered they didn’t use their new recreational vehicles as often as planned.
As a result, there were a generous amount of gently used RVs for sale. While consumers previously had few options, they now had plenty of potential rigs to consider.
An oversaturated market may benefit consumers, but it makes it challenging for dealers and owners looking to sell their rigs. While campers once sold themselves before hitting the dealership lot, that was no longer the case in 2023.
HOT TIP
Read 5 Pitfalls to Avoid When Buying Your First RV so you don’t regret your RV purchase.
Industry Experts Remain Hopeful for 2024
There’s no easy way to say it: the number of shipments in 2023 could have been better. However, the RV Industry Association (RVIA) has a more optimistic outlook for 2024.
They expect shipments to land somewhere around 350,000 units for the year. This would represent between an 11.8 to 15.8% increase compared to 2023.
The Federal Reserve has recently announced that inflation and the economy are better than anticipated.
As a result, 2024 will likely see a reduction in interest rates. Decreased interest rates may encourage consumers to sign their names on the dotted line.
It will also encourage dealerships to increase prices again.
Is 2024 a Good Time to Buy an RV?
Buying an RV is a significant decision and isn’t one that you should take lightly. Before getting too far along, you must take a long look at your finances and make sure you can afford your rig.
Not only will you likely have a monthly payment, but there are also hidden expenses that many overlook.
With increased interest rates and MSRPs, being in a good position financially is critical. If not, you could find yourself in a financial disaster.
In addition to your monthly payment, remember to consider hidden expenses like storage, maintenance, and camping reservations. These can add up quickly and make it challenging to afford your adventures.
Will We See a Surge in RV Sales in 2024?
RVing has been trendy for several years. However, the increased prices and demands are making it harder and harder for more to embrace the lifestyle.
Most dealerships have plenty of inventory, and many struggled to get rid of last year’s models. As a result, it could be looking better for a surge in RV sales in 2024.
The RV Industry Association comprises executives from some of the largest brands in the market. As a result, it’s understandable that they’re portraying a more positive outlook. Casting anything but a positive outlook could set them up for failure in 2024.
