Lending for boats and recreational vehicles fell after Sept. 11, but lenders say it has picked up in recent months in part because of the terror attacks.
People have been reluctant to travel internationally, and much of those recreational dollars are now coming to the marine and RV industries, said David Blancett, the president of First New England Financial, a Fort Lauderdale, Fla., subsidiary of Wachovia Corp.
First New England originated only $8 million of new boat loans in September, Mr. Blancett said down 60% from August and 36% from September 2000. But volume has risen steadily since. In January its new boat loans were $24 million, more than two and a half times the year-earlier figure.
Overall industry figures for marine lending were not available, but the Recreational Vehicle Industry Association said that manufacturer shipments of RVs fell abruptly after the attacks.
Shipments have rebounded, however, and are showing signs that they will surpass last years volume. About 21,300 RVs were shipped in January, up 10.9% from January of 2001.
John W. DeWolf, an analyst specializing the recreational-vehicle market for DeWolf Associates, in Sterling, Va., said shipments will reach 263,200 this year and could be as high as 300,000 next year. The record, set in 1999, is 321,200.
David Potter, senior vice president at $1.5 billion-asset North Shore Bank in Brookfield, Wis., offered another reason for the surge.
People want to be closer to their families now, and boating and traveling around in RVs are two ways to enjoy family activities together, Mr. Potter said. North Shores marine and RV loan originations were $35 million in February, up 13% from a year earlier, and this months applications are up 30% from March 2000.
RV makers in particular have designed units that are more family-friendly, adding extras such as additional beds and expandable sides for camping, said Paul Wible, an executive vice president at $13 billion-asset Bank of the West in San Francisco.
Mr. Wible said that with interest rates at their lowest levels in decades, the product is more affordable now, so youre seeing more families entering the market.
Jim Coburn, executive vice president at $39.2 billion-asset National City Bank in Cleveland, agreed that the Federal Reserve Boards 11 rate cuts over the past year have helped boost marine and RV loan originations.
The banks boat and RV originations in February exceeded projections by over 200%, Mr. Coburn said, adding that the lower rates have increased loan originations as well as refinancings.
People have held out to refinance until rates were good, and now is a great time to trade out, said Chris Renn, the national director of marine and RV sales for Firstar Bank, a subsidiary of $171 billion-asset U.S. Bancorp of Minneapolis.
The Fed is widely expected to begin raising rates by the summer or perhaps as early as its next meeting on May 7 but lenders say that with the economy rebounding they do not foresee any waning in the demand for boat and RV loans.
