One of the biggest news stories following the end of the recession was how consumers eventually began buying cars again. As the economy slowly recovered and more people found the need to upgrade their vehicles, the “Big Three” American automakers experienced a recovery, but not before the industry accepted a bailout from the federal government.
However, one piece of news that has gone almost unnoticed is the recovery that the RV industry has experienced.
According to a recent article by Bloomberg Businessweek, the Recreational Vehicle Industry Association has revealed that RV sales are expected to surpass 316,300 units this year—11 percent higher than in 2012. Next year, the group predicts a 6 percent gain.
Why is this happening? Similar to the good fortune that befell the auto industry, RV makers are benefiting from a better economy and, more importantly, cheap, accessible credit.
RVs are expensive, and it is not unheard of for certain models to cost as much as a small house. These are not items that people pay cash for. And since most of the recent sales have been expensive, high-end models, it is clear that many more consumers are taking on debt to buy them.
Such an investment requires a bit more scrutiny on the part of the financial institution that loans out the money. Though RVs are large vehicles, their price demands that they be treated more like homes than cars. Banks should use risk assessment tools to determine if prospective buyers are at risk of defaulting on the loans that they seek.