Truck prices seem to be going ever upward. Half-ton pickups are selling at around $50,000 on average with some models pushing into the $80,000 and higher range. Heavy-duty trucks can reach $100,000 in costs. Even smaller trucks often have a $35,000 to $50,000 price tag with a fully-loaded one going over $60,000 easily. Ford dealers are saying that a fully loaded 2021 F-150 will even be priced at nearly $80,000 vs the base price of just $30,635. So what gives? Why are trucks so expensive today and is it worth going all-in on a new "Limited" or are you better off buying a used truck that's coming off a lease instead?
Why New Trucks Are So Expensive
Like most vehicles, pickup trucks are now four-wheeled, rolling metal technology cages. The average passenger vehicle today has over 30 computers in it. Each of those computers has several sensors attached to it to feed it information. Safety engineering and technology has taken big leaps forward, but those leaps come at a cost. To go with that, fuel economy is also a huge factor and truck makers in particular are hard-pressed to improve those MPG returns. Which means more technology, which means more cost.
Going with that technology are also great improvements in comfort and luxury. Pickup trucks today are akin to what a luxury sedan would have been a decade or two ago. They have a plush ride, comfortable ergonomics, smart design, and good maneuverability. Compared to their counterparts of the 1990s, for example, today’s pickup trucks are a world apart in terms of not only comfort and ride quality, but also in capability. The average half-ton pickup in 1995 could tow about 7,000 pounds. Today it’s over 10,000.
Along with comfort and luxury features, new trucks are also much safer than the ones you might remember fondly from when you were a kid. All these layers add up and cumulatively explain the bulk of why new trucks are so expensive.
Profit Makes New Trucks Expensive Too
For their part, manufacturers know that with high consumer demand comes higher profit potential and they price accordingly. Base model trucks are relatively rare and are mostly sold in the realm of commercial fleets and businesses. Most consumers trend towards the mid-grade trim models for any vehicle market; including trucks. In marketing, however, the base model also has the role of being the “price draw” for the manufacturer’s marketing. This lowest price possible can get buyers onto the dealer’s lot, where they’ll likely end up adding 30 to 50 percent more to that base price in trim options and upgrades.
That brings us to the much-maligned dealer markup. Most dealerships mark up pickup trucks at rates higher than they do other passenger vehicles. This is part of the trickle-down from the aforementioned high demand for these trucks. Some models will receive much higher markups than will others, of course, but that’s the norm in most vehicle markets. The most desirable model (usually the “halo,” highest performance, or most popular) will get the highest markup. Sometimes, those markups can be talked down during purchase negotiations, but if the truck is in very high demand, the budge room the dealer is likely to give will be small. There will be other buyers.
All These Features Add Up To A Big Expensive Truck
So we have five major reasons for pickup truck prices continually trending upwards: technology, comfort, consumer demand, high margins, and dealer markup. All of those things are major contributors to the high price of pickup trucks today. One more thing means those prices will stay that way: consumers will pay that high price.
So Why Are Used Trucks So Expensive?
Still, we can’t attribute all of the high cost in a pickup truck to just technological advancement and profit taking by the dealer or manufacturer. That plays a large role, but other factors are also at play. Like any other market, the pickup truck markets are based on simple supply and demand. Currently, and for several years now, the demand for pickup trucks has been very high. As an indicator of this, the used truck market enjoys the highest resale values of any other used vehicle market. Despite the number of trucks that are available. This means that even with relatively high supply in both the new and used markets, consumer demand is also very high.
While we might romanticize and enjoy talking about the glory days when a truck was simply an engine, a bed, and a cab with a simple bench seat mounted to a frame with wheels ... those days are gone. There's simply no market for what trucks like the Chevy S10 once brought to the American heartland. While trucks like that were prized by a generation of men that needed something rugged, simple, and cheap, times have changed.
As a result, the used truck market starts with an expensive product and unlike with cars the depreciation is far lower. Since trucks are designed to last, there are fewer of them available on the second-hand market. While many car and SUV customers might trade their vehicles in well before 100,000 miles, truck owners frequently push their trucks to 200,000 or more miles. This results in low depreciation since there are many buyers out there that want to buy a used truck at a slightly lower price than what it might cost new. In practical terms, this means that many trucks retain up to half of their original value after five years. This is a much stronger trend than you will see with most cars. This is not a new trend and it will probably continue for decades to come and that means that even used trucks are going to be expensive.
Despite complaints seen online and around the water cooler at the office, there’s no getting around the fact that pickup truck buyers are willing to pay those prices. This is why demand remains high. Pickup trucks are uniquely American and have been the best-selling vehicle type here for decades. This trend doesn’t seem likely to change, high prices or not.