The COVID Value Bubble
One of the things that’s been incredible to watch during the COVID pandemic has been the new entry of many Australians into the RV lifestyle.
Border closures and lockdowns were a negative for many of us that enjoy the RV touring lifestyle, but it also opened many an Australian’s eyes to what is right here on our doorstep.
There is so much to see and do right here that going overseas really is an option – not a must do. I see this as a two-edged sword; absolutely positive in terms of tourism and supporting many of the lovely little towns in regional areas that many of us know and love. The negative is the burden of responsibility to ensure people know and understand the perils and challenges of touring. There are many of them and I’m glad the CMCA’s RVSafe campaign exists and am looking forward to working closer on that side to ensure as many of these new entrants to the lifestyle are educated on the simple things that many more experience RV owners take for granted.
This flurry of interest has generated an interesting phenomenon on the market. Some call it “COVID tax”, which is loosely right, but put simply it’s just supply and demand. In speaking to many friends in the industry, the wait time from a manufacturing perspective is as long as 18 months at the moment. Manufacturing is challenged with labour and part shortages and compounded by a massive increase in orders.
For mine, this is a wonderful issue to have for the waning manufacturing industry in Australia, and as I mentioned before, great for keeping Australian dollars in the country with increased internal tourism. However, this delivery challenge of new RVs has seen second-hand prices jump significantly. Assets like motorhomes depreciate in normal market conditions, even if it’s only a marginal percentage, but what we see in this market currently is clear artificial inflation. It’s certainly not uncommon for some of the most desirable units to be increasing in value which is completely counterintuitive to the norm.
I know that this is an issue for RV owners. You have to ask yourself, if the worst were to happen, would you be able to replace your RV with the payout you’d get? If the answer is no, then here’s a few tips to help you navigate that situation with your insurer.
1) Get armed with data – arrange a valuation of your RV from a professional. This could be your local dealer or an online valuation organisation. Even doing some research for similar assets online through an RV sales website can help, but not be as solid as a valuation on paper.
2) Plead your case – Call your insurer or insurance agent. The data from the above means you have credible information that should allow you to get what you want. If your insurer isn’t willing to budge, then it might be time to move on.
3) Understand your policy – not all policies are the same, so make sure you read the PDS, scout the website and ask question directly. Online forums and resources are great, but if you’ve not done your research or gone directly to the source you may be getting poor information.
There will be extra premiums associated with increasing the value of your RV. But would you rather the extra cost, or find yourself unable to continue the lifestyle or encumbered with debt when you should be enjoying your life? Pretty easy decision if you ask me.
As for the bubble itself – my tip is we have another 18 months or so to go until borders open and confidence levels around international travel improve to a level where we will see the values come back to a rational number.
Might be worth holding off to grab a bargain