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Lack of Coaches
Over the last few months I have had conversations with owners who were buying a coach outright, or who contemplated stepping up a few years from their present coach. All feedback indicates that finding relatively new used coaches is now both difficult and expensive.
Since the rebound of the stock market and the economy in general we have seen the market shift from a buyer’s market to a seller’s market. If the economy does not go through the trauma of the recent past we can expect there to be a serious lack of available coaches. All converters are now producing but not at levels prior to the economy hitting the skids. At that time they were not only producing coaches to order, they were also producing coaches for their inventory.
Then the economy went in the dumper and production of coaches dropped significantly. In fact it seemed you could count production during that time on your fingers. Now those buyers who would purchase relatively new used coaches are finding there is a complete lack of available coaches in the age range preferred by those traditionally considered “second owners”.
What is worse is that as the coaches produced during the most recent years reach the age when “second owners” are going to be buying them those coaches are being produced in lower quantities than in the period prior to the recession so there will continue to be a lack of relatively new coaches for sale.
It is going to be interesting to see if this situation will have any impact on the rate of depreciation for older coaches. It already has increased the relative value of fairly new coaches that are hitting the market.
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26 Replies
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I see another problem that has created a problem for me,I do not want a coach that has exhaust stacks through the closet reducing the available closet space by 60%,I don’t want a Volvo motor and I do not want roof airs that many of the new Liberty floor plans have.I only have 60,000 miles on my 08 and it will be very difficult to pry it out of my hands as I am very comfortable with this coach.I think that 05-08 is the SWEET spot in XLII coaches as they have 365 tires,better slides,usually more house battery capacity,usually newer pure sine wave inverters,full rear closet and Detroit 14 Liter engine.
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Amen to that, Jack.
As much as I would like adaptive braking, fire suppression, multiplex electrical systems, TPMS internal to the wheel, anti skid, etc. the compromises exceed the needs. But the range you cited is approaching the 10 year mark and that number has broad reaching influence on financiers, dealers, converters, buyers, etc.
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Amen to what Jon and Jack said. The biggest problem in the near future is going to be available financing for prospective buyers. Some of them need to be educated if possible. The availability of late model busses will be tight for a fairly long time, with the same pool changing hands. But future buyers have got to realize what some of us know and understand, and that is that on the MH side it is almost impossible to wear these busses out. If you maintain and keep up with necessary repairs a Prevo will virtually last forever and one can up-date and remodel at will. Do the math and compare to the price of a very late model or new one for very little gain…it’s pretty much a no-brainer. Geo.
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I think from what I have seen over the years is that improvements to the conversion are likely the biggest driving force behind an owner changing coaches. Those with 40 footers wanted 45’s. Then those with no slides wanted slides. Now those with 2 slides want 4.
But like Jack, as much as I would like some of the features found on newer coaches, I am not so certain some of the changes are progress. Yes some of the technical improvements are clearly desirable, but the coaches of today have far less useable space than the previous ones. Mileage was great when we were getting 8MPG, but now we are going backwards. I know everyone but me likes the gee-whiz electronic controls that allow you to run the entire coach from your cell phone or i-pad, but how many versions of the i-pad or i-phone have come out in the last week? Does anyone really believe they won’t be forced to spend more money than the average car costs to “upgrade” so in a few years they will again be obsolete?
Nothing can beat a new or newer coach, but I’m not so sure any of us with a well maintained coach will be able to get all they have in a much newer coach. And maybe that is good because there will not be as many available.
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During the down turn in the economy the converters went from converting around 150-175 a year to less than 50 with several converters going bankrupt or being sold.This situation creates very few coaches after 2008,it does not appear that the remaining converters will convert more than 50 this year,so the shortage will continue for several more years.Those of us that have found the right coach are not willing to sell them,especially when it might take months to find another coach.All of the converters are bragging that they are selling all that they can convert,well with 1/3 of the new ones that are now available compared to pre recession they should be able to find 50 willing customers in a country with 300,000,000 people.
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I think this will take a long time to correct, if it ever does.
Converters in prior years were able to point out the distinction between a Prevost conversion and high end motor homes. Now that a vacuum has been created on the high end of the scale someone is going to fill the void and we can already see that happening. Plastic coaches are now well equipped with the goodies and systems are starting to match what is offered by converters in terms of quality. If and when they get the structural part correct and start building motor homes with better materials, such as less flakeboard and cheap fabrics the buyers that once would have only considered a Prevost now will have choices.
Does a converter maintain current levels of production making the supply less than the demand and enjoying the rewards that will come from higher prices and margins, or does the converter slowly ramp up production (which means the expense of training new employees and the capital required for higher volume) or does the converter sit back and enjoy the prosperity they did not have during the downturn?
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They will never get it right. The difference is the bus. No MH manufacturer will ever get their chassis certified as a commercial vehicle. It would entail crash testing and God knows what else. The closest anyone can come seems to be Newell and still there is a huge difference. You can buy a mid to late 90’s XL 100-150K and double or even triple the initial cost zeroing mechanically and up dating and still not even reach the middle level of plastic MH’s. Geo.
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But the people that have never owned or driven a Prevost will never know the difference. Unless and until folks can own a Prevost, or at least get some experience with one they can never appreciate the handling, safety, or durability.
Maybe the time has come for someone to create a “new” Prevost from late model used coaches. Buy them, replace the engine and transmission and differential with new, gut them and do a complete new interior to today’s standards, update the systems with new everything and turn a $150,000 XL into the equivalent of a new coach to be sold for $450,000. Add slides for another $150,000. Offer a 2 year total coach warranty and there wouldn’t be a conventional motor home that would equal it.
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Jon,
Sounds like a 1950 Ford re-do. I think you have about the same amount in yours too!
Mark
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I don’t think that gutting one and a total rebuild could be done for 250-300K but I see your point Jon.I think that there are very few of us that want to give up our coach for something that is smaller in space and loaded with automation stuff that is over the top.Jon is right,it could take a decade for this shortage to iron itself out.
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I’ve also wondered if what Jon suggests would have a market. One of the things I struggle with is pulling the Series 60 and the Allison transmission and replacing those units. From what I’ve seen on the forums, “Prevost problems” don’t seem to be rooted in the engine/trans package. (I hope I haven’t jinxed myself so that on our next trip with the coach we experience some kind of catastrophic drivetrain failure!)
George Prientice and I have a good friend who has been selling used cars and pickups (as well as Pace and Bravo trailers) for fifty years and is still going strong at 73. He tells me that two things have really screwed up the late model used car market: First, the huge drop in new car production and sales during the recession and second “Cash for Clunkers”. They specialize in GM products.
He and his son are buying used cars/trucks at the Milwaukee Mannheim auction every week and at a Michigan auction 2x to 4x a month.
He contends the product they need on the lot continue to be in short supply even though new car production is back up now. Cash for Clunker took a considerable number of good, lower priced used cars out of the market forcing consumers who would be buying those cars to “buy up” into an already tight market contributing to the short supply.
As a number of the posters have written before me, the same thing is happened in the Prevost motorcoach market and its effects will be felt into the future. We were looking for a late 90’s Prevost. Finally found one. Happy with it. Since we bought ours, I’ve noticed that late 90’s Prevosts for sale have been very few and far between. So I asked myself: “why?”
Most of those I see for sale seem to be sellers selling and not replacing their coach. Logically if someone has a late 90’s coach, has had it for a while, and wants to move to a newer coach for whatever reason they might be looking for a coach built during the downturn … but there aren’t many available, so they sit tight.
An interesting economics of supply and demand playing out in real time.
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I would go even further and say it might even take a generation to get back to how it was, or even not at all.
My reasoning is two-fold, both related. Firstly the buyers of new conversions. During or after the crash, there will have been a fair few folks who had their fingers burned and worse. That means a good number of them are very unlikely to take on such a large (non-house related) debt again. Even if the banks were as willing to lend again. Talking of which, was it the lax lending of the banks that allowed a number of people to get a loan for a Prevost that under ‘normal’ lending conditions, would not have occured? So after 2008/9 that probably leaves cash buyers or those who could afford to pay cash but still prefer a loan – the sort of people who banks like lending to! Maybe also, some of those buyers who can afford, are looking at buying something entirely different as a Prevost conversion is last years ‘must have’ toy.
The second reason is production capacity. Just like S&S builders, a good swave of production capacity has been removed and even if they wanted to, doubling production to make up is never likely to happen for a whole host of reasons; finances, suitable premises, skilled labour and so on. Also, none of the current active convertors is likely to want to expand to such a size that they risk implosion when the next dip comes. (which it will to a greater or lesser extent) When you remove such a large part of the total prodution capacity of a (complex) product, it is always going to take many years for that capacity to be replaced. Just think, if Chrysler had gone bump, could Ford & GM have replaced all Chryslers sales with their own? Unlikely. And new buiders coming into the market to help with capacity? Maybe, but they will need time and lots of it to prove their credetials and reputation etc.
I think it is a similar storey with capacity and overall sales with S&S builders. I’m not sure all their sales are going to return either. Both because of more cautious bank lending again and also because of the numbers of builders, especially large ones like Monaco that (effectively) went to the wall. Newmar, one of the ones that obviously survived, I believe used to build 150 coaches/month. That figure is now less than 50. Their sales are increasing, but I would think it very unlikely that they allow it to reach the previous peaks without very careful consideration (and investment)
All in all, I would conclude by saying that the Prevost market got too inflated in the run up to the crash and has taken a serious hit subsequently to re-align itself with reality, just as the markets do. I’m sure it is a similar story with the boat builders. In the meantime, the second-hand market values increase as has already been noted and good buses at a good price get harder to find. At least there is a little reprieve for sellers as their sale values increase slightly! For buyers, not so good.
Net result for me personally? Maybe I pay a bit more and have to search a little longer for my ‘baby’. Fingers crossed for everyone who wants to change their bus or buy their first one.
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When the economy went to hell it was really ugly and a lot of things happened that made no sense.
Some converters dumped inventory. That devalued all the coaches. Some who financed their coaches got upside down and those coaches ended up in the market at prices that were so low it damaged the value of all other coaches.
All of a sudden people could buy a Prevost at incredibly low prices in some instances, and some of the buyers who “stole” their coach were not in a position to properly maintain them. On this forum we have read of members who bought a coach and found they had some serious costs required to restore some coaches that hadn’t been properly taken care of.
It appears we are getting past the insanity and we now rarely hear of someone buying a coach for bargain prices. What I hope is that if the market grows and is met by the converters we do not ever return to a period in which the bottom of the market falls out as quickly and drastically as happened a few years ago. Maybe, just maybe we can also see a slower rate of depreciation because when values dropped so far, so fast it was hard to justify maintaining or upgrading coaches.
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Im curious: What do you think about the loss of 5 or 6 in the Sanford fire a few weeks ago? Considering how low the used inventory already was, a loss of that many coaches all at once could have an effect on the market. Any opinions?
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Do you know the vintage and converter?
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