The multipurpose pickup trucks, which can be used as a mode of transport, as a lightweight trailer truck, and for day-to-day chores, have become so much expensive that an average car buyer cannot afford a pickup truck nowadays. The price of pickup trucks has skyrocketed in the last two decades. The average cost of a pickup truck is more than $50,000, a big amount, not to say. But why are pickup truck so expensive?
The once loved and affordable pickup trucks are now expensive, thanks to the increased demand, chip shortage, US tariff policies, technology, comfort, high margins, and dealer markup. Another reason why the price is on the rise is that people are willing to pay an even higher amount, which as a result, obviously will raise the price.
Let’s get to know about the reasons in detail & some other reasons too.
Why Are Pickup Trucks So Expensive?
The average price of pickup trucks is more than $50,000, and if we talk about luxury and higher-power pickup trucks, their prices are more than $70k. Most pickup trucks in the 90s used to cost between $10k to $20k. So what has caused this much raised prices? Actually, there are several reasons, which include:
1) Chip Shortage & Supply Chain Disruptions
The recent hike in pickup trucks is due to chip shortage and supply chain disruptions due to Covid-19. For months, microchips have been in short supply. Because of this, car manufacturers are unable to produce all of the vehicles in their lineups, including trucks, and there are fewer options for consumers.
Because of the rarity, people are willing to pay a premium. So this, in turn, is making the prices sky-high.
2) Technology Advancement
Advances in automotive technology unquestionably fuel the rising cost of automobiles. As a result, in the last two decades, automobile manufacturers have had to invest heavily in research and development in order to improve safety, fuel economy, and emissions.
Consumers have also become more concerned about creature comforts. Items such as in-cab touch displays, seat warmers (and coolers), computerized full-length sunroofs, and backup cameras raise the price of constructing a truck.
3) They are new family cars.
Despite the fact that pickups have been popular for decades, the recent demise of the family sedan can be attributed in part to a shift in consumer preference toward trucks rather than cars. Trucks are just no longer merely work/utility vehicles but became more family-friendly as they grew into their new role.
And obviously, it is not cheap to convert a bare-bones work truck into a family vehicle. Five people are expected to sit in midsize trucks. Full-size trucks, which have become America’s default family vehicle, are expected to seat five people comfortably.
So this definitely has made the prices of pickup trucks go high.
4) Power of the Trucks
Trucks are increasing their work capacity as well as their family car technology. You might laugh if you look at some older trucks. Conversely, you might giggle at older trucks. For example, 1980 Ford F-Series engines ranged from 110 to 153 horsepower and 309-foot pounds of torque.
The smallest gas engine in the 2020 F-Series lineup offers 290 horsepower, with an optional 450 horsepower and 510 foot-pounds of torque. Turbochargers, direct injection, aluminum body panels, and clever computer tuning all boost towing capability but cost money in R&D.
So surely, the prices will become high for the power they are giving.
5) Increased Demand
As measured by rising sales data, trucks are pricey due to purchasers’ increased truck demand. In 2019, consumers committed to purchasing approximately 900,000 Ford F-150s. Over time, manufacturers boosted output to enhance supply but also increased prices. Since truck buyers have not retreated, prices continue to rise.
In addition, supply chain problems have reduced production, but demand remains high, resulting in price increases.
6) The Chicken Tax
Japanese carmakers like Toyota and Honda have displaced the Big Three in the domestic market by selling high-quality, low-cost vehicles. However, due to a “Chicken Tax” enacted in 1964, trucks in the United States were not subjected to this.
Actually, the United States responded to European tariffs on American poultry by levying a 25 percent tariff on foreign light trucks as retaliation. It has remained in place for nearly 60 years because it safeguards the truck market.
Introducing a basic $20,000 workhorse truck won’t be realistic for a foreign manufacturer like Isuzu because of the additional 25 percent in the price. So with no foreign competition, the local truck market keeps the prices as per their will.
7) The Used Trucks are also not Cheaper.
What is the typical response when new automobiles are expensive? Buy used items to save money. Unfortunately, this method is ineffective for pickup trucks. Used pickup truck costs have increased more rapidly than new truck pricing.
In 2021, the average price of a second-hand full-size pickup truck exceeded $40,000. Some used vehicles sold for more than their brand-new counterparts. So obviously, it does not affect the new truck prices much, and they stay high priced.
8) They are also great for off-roading.
Currently, off-roading is arguably the most popular vehicle craze. However, due to their heavy-duty suspensions and four-wheel-drive options, trucks have always been very capable off-road.
These characteristics made it simple for recreational off-roaders to customize their vehicles with aftermarket components. As a result, a large proportion of vehicles are being delivered with some type of off-road improvement, which is driving up the price.
9) Higher Manufacturer & Dealer Profit Margins
Vehicle manufacturers are making more money with pickup trucks than they do with automobiles. So in order to keep up with the demand for their trucks, the manufacturers keep their margins high, on average, $15,000 for some models. So obviously, it will make the prices high.
Obviously, inflation is a big reason for making pickup trucks expensive. Over the last two decades, our government has played a role in driving up retail prices. In addition, a rise in automobile safety and pollution standards has occurred. Although inflation is a factor, it isn’t to the extent that you might expect.
Why are used pickup trucks so expensive?
You may think used pickup trucks may be cheaper, but this is not the case. Actually, the used pickup trucks are expensive too, and there are various factors contributing to this, which include:
- Reliability is the most important factor. Overall, pickup trucks have a longer lifespan because they are more reliable. So this results in even old pickup trucks having higher prices.
- Furthermore, the body pieces on old pickup trucks are more expensive and more reliable than those on sedans and coupes. Heavy-duty materials are needed to assure the long-term viability of used trucks, which raises their price.
- Used trucks depreciate at a far slower rate than used cars. It’s easier for consumers to acquire a greater trade-in value for their used trucks, but it means higher selling expenses for the next buyer of a second-hand truck.
- Trucks are significantly more powerful than the vast majority of passenger cars and sport utility vehicles on the road. These trucks must be able to transport and tow huge cargo, something other vehicle kinds cannot perform. So this makes them more valuable, resulting in higher value even for old trucks.
So now you know all the reasons why are pickup trucks so expensive. This is understandable in light of the truck’s robust capability, dependability, luxury, and technology features, as well as the restricted supply in the second-hand truck market. However, if you want to buy one, check for deals and cashbacks, which sometimes run.
We hope this article was helpful & informative. Please leave your valuable thoughts & suggestions in the comments below!
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