<%@LANGUAGE="JAVASCRIPT" CODEPAGE="65001"%> Psycological Impacts of High Fuel Prices
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The "Psychological" Impacts

By Tom Gonser (Revised 10/13)

More than a decade ago we had published an article by our Chief Technical Advisor, Bob Gummersall, that takes a careful and objective look at the true effects of higher fuel costs on the RV lifestyle. From Bob's analysis, it seemed difficult to conclude other than higher fuel prices are simply not a major factor in RV ownership -- even at substantially higher levels than the gas and diesel cost in the current marketplace. Noteworthy is the fact that Bob's article, in its very title, describes the assessment as being "without emotion". While we do not challenge the "objective" conclusion that today's higher fuel prices arguably should not have a significant dampening effect on RVing, we think it's appropriate to consider another thesis: Even if it is not logical for RVers to react to higher fuel costs, there are indeed significant psychological factors (call them "emotional" if you wish) that may in fact have a chilling effect on the RV lifestyle as we have come to know it over the past decade or more.

Impact of Media Reports

Consider for example the effect of a headlines in the national news that began years ago to question "whether America might be coming to the end of its love affair with sports utility vehicles". The reason? It's of course attributed to higher fuel prices. Since then hybrid models and now even fully electric models are attracting greater government incentives and in many circles are considered a more "acceptable choice".

What is the likely reaction to these changes for buyers when contemplating the purchase of a new car or RV? Arguably it will influence some to consider adjusting to the "new reality" of higher fuel costs, and to opt for a vehicle that offers better fuel economy. For many contemplating a new vehicle purchase this may not be a "logical" conclusion. Indeed the higher cost of some of the new "high mileage" hybrid and electric vehicles may take years to justify. But inspired by media hype it may have the effect of changing purchase decisions -- not based on an "objective" assessment, but rather as a psychological reaction to the perception of higher fuel costs. Should RVers be considered immune from these reactions?

The "Political Correctness" Factor

When the upward creep of fuel prices started we began to see a reaction to "gas guzzlers" among some portion of the population. SUVs were thought to be especially "bad", because in many cases these less efficient vehicles were purchased more out of a sense of vanity than real "need" for the four wheel drive capabilities they offer. No doubt many of these vehicles will never see surfaces more challenging than smooth pavement.

But demand for these vehicles initially remained steady, despite the early phases of higher pump prices. But public opinion may have shifted somewhat against these vehicles -- and to a certain extent even to their owners. Is it possible that with a growing and increasingly strident public opinion that scorns inefficient vehicles it could become akin to "politically incorrect" to own one of these vehicles? This change in the landscape of public opinion may seem either unlikely or unimportant to some. However clearly there are some who do not want to appear to be out of step with current societal "standards". And these folks are likely to make choices based in part on these types of "appearances". To the extent they do so, market demand for energy inefficient vehicles seems likely to decline further -- based in part not on logic, but for reasons that are psychological in nature. It seems the leap of logic to the impact on prospective RV purchasers might not be far behind.

Concerns about Resale Value

As the "new reality" of dramatically higher fuel prices becomes more visible, and part of our consciousness, is it possible we may begin to wonder about the wisdom of purchasing the type of vehicle that may have a limited resale potential because it is fuel inefficient? As fuel prices continue to escalate (if you buy into the assumption this is a likely scenario) might some of us wonder about the resale market for vehicles that can not use, at least in part, alternative energy sources? Indeed, are we already seeing this in the dramatic shift away from large motorhomes to much smaller, lighter, and less fuel-demanding towables?

High end motorhomes escalated in the first decade of the 21st century to price points that took the highest end models into uncharted waters. But initially the resale market remained active, and many were willing to invest the large sums required to make that purchase. Granted, no one in his or her right mind would ever purchase an RV thinking it's a good "investment". But so long as prices on the newest models kept going up, and sales at these prices remained firm, there was a reasonable expectation that resale prices should continue to remain viable as well. When the combination of higher fuel prices and recessionary times came together in 2007-8, many of the upscale motorhome manufacturers could no longer survive. Here again we had a subtle but important psychological factor at work: No one wanted to pay a large sum of money for a product that, logically or otherwise, might increasingly be seen as the latest iteration of the "dinosaur" -- or, said otherwise, wanted to make a purchase that might potentially be subject to a rapid loss of value.

Fuel Prices Revisited

Just a very few years ago the thought of fuel costing as much as $4.00 per gallon was beyond our general comprehension or expectation. But today we hear speculation that prices may well go even higher -- perhaps a lot higher. Five dollars per gallon no longer seems out of the range of possibility for diesel fuel. But how about six dollars per gallon -- or seven? In the past year the RV market has seemed remarkably resilient in dealing with the increased cost of fuel. Perhaps RVers recognize fuel costs are not the major factor in the overall cost of RV ownership. But the question remains as to whether at some level of future fuel cost the psychological impacts might indeed pose a significant challenge to the RVing lifestyle as we have known it. The recent trends favoring small, light towable RVs suggests this change may now be the wave of the future.

Conclusion: We do not intend to forecast a picture of inevitable doom and gloom for RVers or the industry, although dramatic changes have already been felt. However psychological impacts, some of which may translate to public opinion and changed buyer preferences, deserve at least our conscious awareness.