What happens when the bottom falls out... - Polaris RZR Forum - RZR Forums.net
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post #1 of 37 Old July 16th, 2019, 08:01 AM Thread Starter
 
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What happens when the bottom falls out...

I am talking about the rzr market specifically and the consumer market economy generally. The rise of the rzr and performance utvs over the last 12 years has been quite amazing. A recreation and enthusiast lifestyle has been created. The financial growth overall has been as impressive as the growth in what people are willing to invest in a single machine.

As I see people invest 10, 20 or even 30k or more in single utvs, I question the future of the market when the economy turns. We are not talking about a truck or something that can be used to support work or even be used to commute to work. We are talking about a pure toy. As the performance utv market has heated up, they have never been means tested with a tight economy where peopleís priorities shift to the essentials.

This is not totally new as sports cars, boats and motorcycles are toys that have gone through tight economies. However at least with sports cars and motorcycles you could get to work as needed. As far as boats are concerned, they have always been a great place to light money on fire.

Interested to hear peoples thoughts, however leave your politics aside. The next recession is coming, we just donít know how bad or how long. How durable do you think the utv market is? In five years will we see lots of people upside down with thousands tied up in utvs they canít sell because no one has the disposable income to buy? Or has a lifestyle been created that we are all willing to invest in?
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post #2 of 37 Old July 16th, 2019, 08:28 AM
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Re: What happens when the bottom falls out...

That is a tough one. In my 30 plus years in the workforce I've had ups and downs due to the economy. I had to endure several layoffs in that timeframe, one that lasted a year.
All through those I still snowmobiled and rode a sport quad. In the earlier years , I was still able to boat. The last layoff, the year long one did effect me. I saw it coming and was able to sell the boat. Funny thing is, I had just bought an '08 RZR 800, kept that for 8 years. That was then, this is now. And now we have people that have double what that 800 cost in just accessories. I think the people that go out and buy a new one every other year, and credit card all the add on's will be hurting for sure.
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post #3 of 37 Old July 16th, 2019, 08:39 AM
 
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Re: What happens when the bottom falls out...

Nothing that you buy that depreciates and generates no return is an investment. Itís a liability. You accept that liability in exchange for the reward.

That said, the sport UTV market was basically created and grew exponentially smack in the middle of the last recession. Started with the Rhino in Ď04, then the RZR in Ď08, and grew like crazy from there. I think it was just an untapped market waiting to be developed. A guy like me who was into Jeeps, into quads, and found the UTV offered the best of both worlds for a price somewhere in the middle.

Personally, I wonít be dropping 30k on a UTV, but I donít begrudge some one who does. There are others that think Iím nuts for spending 15k on mine. Itís all relative.

Not to say that itís a good thing, but you can finance anything these days and the terms are getting ever longer. As long as people can scratch up a little extra cash and get an affordable payment on a toy, they will buy them.
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post #4 of 37 Old July 16th, 2019, 09:14 AM
 
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Re: What happens when the bottom falls out...

I guess I never think of toys as investments. My toys are in the same category for me as vacations. Its the price to play. I have $30k easy in my RZR and I have fun with it. I know that I will never see $30k again. its worth what ever the market will pay at the time. Not something I worry about. If I spend $3k on a trip to Hawaii its money spent on the fun. Its gone baby and it ain't coming back.
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post #5 of 37 Old July 16th, 2019, 09:18 AM
 
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Re: What happens when the bottom falls out...

I would have to compare this to the wakeboat market in general. That market bottom hasn't fallen out and the boats keep getting 5% more expensive every year (think prices north of 185k MSRP). The thing about that market is that the used market is propped up by the inflation. Not sure the SXS shares that same model as the used market seems more accessible to more people and the prices are lower. I think as far as prices go you'd be surprised what the market can bare. 40K isn't out of the realm of possibility.
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post #6 of 37 Old July 16th, 2019, 10:07 AM
 
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Re: What happens when the bottom falls out...

Quote:
Originally Posted by Apex1 View Post
In five years will we see lots of people upside down with thousands tied up in utvs they canít sell because no one has the disposable income to buy?
As good a reason as any to pay cash for toys. You aren't upside down if you own it.
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post #7 of 37 Old July 16th, 2019, 10:26 AM
 
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Re: What happens when the bottom falls out...

I look at it a different way. For years when my parents had a lake house we had boats and Sea-Doo's. Dad had his Ranger and I had several different versions of fun boats, the last one being a deck boat. They sold the house in 2014 and the wife and I took a lot of weekend trips for something to do. Those started adding up, but on one of those weekends to Pigeon Forge, we went on a guided ride. Wife loved it more than I expected, so in spring of 2015 we bought a used Commander.

I grew up riding dirt bikes, so I was all in for this. It seemed like we were riding every weekend and soon we realized that we were spending less riding (I am luck to live within 1.5 - 2 hours from any HM trailhead) every weekend than we were going away once a month.

Then we rented a 4-seat RZR out in AZ and it rode so much better than the Commander. Got home and was going to get and an XPT4, but took the wife to go get one and she liked the General 4. So I ended up with an "S4" instead of an XPT4, but I am happy with it.

And the cost of boats has gotten way out of hand. Last boat I bought was a 24' Hurricane Deck Boat and couldn't believe I was going to pay $40K for it. Now that boat would be close to $100K which makes the General 4 seem cheap.
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post #8 of 37 Old July 16th, 2019, 11:01 AM
 
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Re: What happens when the bottom falls out...

These are not investments but rather toys that are paid for with disposable income. I could never justify pending the $$ I do on these things if I had to finance them. I always pay cash for toys because my motto is if I have to finance it I can't afford it. Over the last 10-12 years a billion dollar industry has sprung up around the SXS markeet. The companies who have their business based solely around this source of disposable income will be the ones to suffer in a down turn. The major companies will take minor hits because they are diversified but it's the small proprietors that will go under.
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post #9 of 37 Old July 16th, 2019, 11:01 AM
 
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Re: What happens when the bottom falls out...

Cash is KING !
Stuff gets cheap when economy tanks.

He who takes care of their own economy prospers.
Why at times I like recessions...I take advantage...less people out there riding also.
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post #10 of 37 Old July 16th, 2019, 11:15 AM
 
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I agree these are toys not investments. Normally I would say pay cash for your toys, don’t go into debt. That is not what I did this time. I can get the cash from my investments and CD’s but the 2.9% interest rate Polaris offered is lower than my return on any of my investments. It was a no brainer, I used their money.
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post #11 of 37 Old July 16th, 2019, 12:06 PM
 
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Re: What happens when the bottom falls out...

Not worried about it. Like many here, cash rules, I don't finance fun.

I was stunned to learn so many people finance their UTVs with 10 yr loans. Those people will be hurting in any downturn. I have neighbors here in So UT that are so in debt with their home and toys I wonder how they sleep at night.
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post #12 of 37 Old July 16th, 2019, 01:24 PM Thread Starter
 
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Re: What happens when the bottom falls out...

Quote:
Originally Posted by Total Loss View Post
Cash is KING !
Stuff gets cheap when economy tanks.

He who takes care of their own economy prospers.
Why at times I like recessions...I take advantage...less people out there riding also.
True, have to play the market. In 2010 I bought a used c6 and drove it for 10k miles. Then sold it in 2014 for 3k more. The first owner took a bath on it selling it for 1/2 of List. However I feel like most people that can finance a 56k dollar sports car can take the hit on depreciation.

I question how many utv buyers can afford a new xpt or better cash. What is the percentage of new utvs being financed out 72 months or more?
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post #13 of 37 Old July 16th, 2019, 01:36 PM
 
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Re: What happens when the bottom falls out...

Quote:
Originally Posted by ganks View Post
Not worried about it. Like many here, cash rules, I don't finance fun.

I was stunned to learn so many people finance their UTVs with 10 yr loans. Those people will be hurting in any downturn. I have neighbors here in So UT that are so in debt with their home and toys I wonder how they sleep at night.
10 years? You would be upside down in that thing until maybe year 9. No thanks.

Dealer pushed hard for me to finance and wasn't happy I said No.
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post #14 of 37 Old July 16th, 2019, 06:13 PM
 
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Re: What happens when the bottom falls out...

I remember that when the crunch came in 08/09 Polaris jumped up and offered $99.00 month and only $99.00 down.
The turn out was HUGE for Polaris -sold mega inventory and only 7 years later your toy was paid off!!!!!!!!!!!!!!!!!

Some can't see the forest for the trees- but the markets survive.
It is a shame as it seems like the younger crowd always get caught up in the Gimmick's.
If you can't pay for it in cash- you can't afford it has always been brought to my son's... same as going on a vacation/ keep it off the credit cards unless you can pay for it 100% when the bill comes...

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Last edited by Highrider; July 16th, 2019 at 06:18 PM.
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post #15 of 37 Old July 16th, 2019, 07:00 PM
 
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Ehh I dont mind financing for a year or two if its 0%. However, I dont know many who can afford say a turbo 4s in cash though.
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