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CNN Sunday Morning

Interview With Dave Humphreys

Aired September 01, 2002 - 11:35   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

FREDRICKA WHITFIELD, CNN ANCHOR: Tired of airport hassles? Want the freedom to travel when you want, where you want? If so, you might want to consider joining a fast growing part of the population, RV owners and renters. CNN's Sean Callebs has the details now.
(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): They are lined up at many campsites around the United States, recreational vehicles. Owners say it gives them the chance to see the nation in comfort.

GEORGE WETZEL, RV OWNER: We left some time in April and didn't get back until November.

CALLEBS: The Wetzels from just outside Miami are doing the same thing this year. The industry says RVs are providing an outlet for families still skeptical of flying in the wake of 9/11. Manufacturers and dealers say shipments are up 14 percent this year compared to last. Campgrounds are affording an increase in occupancy. Low interest rates are sparking sales, even though some of these rigs cost hundreds of thousands of dollars.

TRACY FULKERSON, SUPER 1 RV: People are wanting to keep their money at home. They're wanting to travel in the states. They want to see some of the things that are in their own state or very close.

CALLEBS: And then, there is the curiosity factor.

UNIDENTIFIED MALE: Those who aren't familiar with an RV or have not seen motor homes up close, they always want to see what's it look like.

CALLEBS: The perks are eye-openers -- big TVs, DVD players, washer and dryer, full-size fridge. There are even some economic benefits.

FULKERSON: It does qualify under IRS regulations as a second home. So any interest that you pay on that loan, you can deduct the full amount off your IRS tax bill at the end of the year.

CALLEBS: There are drawbacks as well. It takes time to learn how to handle something this size. It only gets about nine miles to the gallon. The resale value is also poor, but buyers are apparently willing to look beyond those concerns for a chance to hit the highway.

Sean Callebs, CNN, Atlanta. (END VIDEOTAPE)

WHITFIELD: All right, let's learn a little bit more about this $9 billion a year industry. Joining me from Washington, Dave Humphreys. He is the president of the Recreational Vehicle Industry Association.

Good to see you.

DAVE HUMPHREYS, PRESIDENT, RECREATIONAL VEHICLE INDUSTRY ASSOCIATION: Good morning.

WHITFIELD: Well, RVs are not just for our grandparents any more, are we? You're noticing that the baby boomer generation has really gotten sight or catching on to the RVs and are buying them like hot cakes.

HUMPHREYS: Well, I think that's really big news. It's true that years ago, we were really selling primarily to retired people who were over 65. Now, people who are 35 to 55 are the largest group and they're still employed. They're living very hectic lives, but they found that this is a great way to kind of get away from all the pressure and reconnect with their family.

WHITFIELD: And finding a....

HUMPHREYS: And so, yes...

WHITFIELD: And finding out that it's a lot more attainable than many of us once thought. We have a live shot of an RV that we're going to explore a little bit after this interview with you. This one has a price tag of -- a whopping price tag of about $700,000.

HUMPHREYS: Well, that is...

WHITFIELD: It's not abnormal for people to be scooping up RVs like this any more.

HUMPHREYS: No, they're doing very well. In fact, all of the high lines are doing well, but we make them as low as $5,000, too and everything in between. The one you're showing there is a Bluebird and it's a wonderful, wonderful vehicle. And if people have that kind of money, it's certainly a great way to go. But fortunately, we have, you know, vehicles in the $20,000 to $30,000 range that are very comfortable, too, and that broadens the appeal considerably.

WHITFIELD: There has been something like a 31 percent increase in the purchasing of RVs this past July compared to July of last year. What explains this surge?

HUMPHREYS: Well, I think there's two things. First of all, before 9/11, thank God, we were doing extremely well. In 1999, we had the biggest year in 20 years. Two thousand was the second biggest year in 20 years. So we were doing extremely well. But then, when 9/11 came along, I think that definitely gave us a boost because the things that had always been helpful and important were simply way more important. For example, getting away from the hassle index at airports, the uncertainty, things like that, that's always been the advantage for RV travel, but it was more so after September 11.

We always touted the fact that when you're in a campground, you're about as comfortable and secure as you could ever be. You wouldn't hesitate, you know, to send your young child several hundred yards to buy a candy bar with a child they met five minutes ago. Well, you'd never do that in a resort, just at a campground. So those things are simply more important and that has helped us.

WHITFIELD: And Dave, what's interesting about this too is these RVs are considered like the second homes. This is how serious the purchasing has become. You know, the interest is tax deductible, just like it would be on a second home, and the financing, it appears, is very similar to buying a home, right?

HUMPHREYS: Yes, it is. As a matter of fact, earlier in the piece, they mentioned the resale value wasn't too good. Well, you know, you can finance a motor home for 15 years and to me, that means that the resale value is good. But you're right, even when you finance it for 15 years, that interest is tax deductible as long as you don't already deduct the interest on a second home. And if you do already have a second home, then use a home equity loan and that interest will still be a deductible.

WHITFIELD: But unlike real estate, which usually appreciates, an RV is not going to appreciate. You still dealing with a vehicle and it is going to depreciate, right? So doesn't it really, in the long run, going to, you know, make sense to finance something for 15, 20 years?

HUMPHREYS: Well, there's no question that any vehicle is going to go down in value every year, but what I'm saying is the lenders have obviously decided -- when they lend money for 15 years, that an RV does not depreciate like the car does. The resale values hold up extremely well, and that's documented by the NAVA used vehicle books, so it's a great asset to be able to say it's not going to go down like a car.

WHITFIELD: So to hit the road with the other seven million RVs out there, would it be your advice, when making your first purchase of an RV, to go for a used vehicle first, see if you like it, try it on for size and then upgrade to something new eventually?

HUMPHREYS: Well, it depends a lot on, you know, how knowledgeable the buyer is. I would say though about 80 percent of all the people who purchase an RV for the first time do, in fact, purchase used. And I think they do that, as you mentioned, because they're not sure how they're going to use it and they just want to be certain before they put down more expensive money into a brand new vehicle. Some people rent, too. That's another option. You can go out and rent one, and see if you like the lifestyle, and what kind of vehicle do you want.

WHITFIELD: All right, David Humphreys of the Recreational Vehicle Industry Association, thank you very much for joining us. HUMPHREYS: Thank you.

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