The average price of a new car in the United States consistently climbs over the years, but there’s an outlier to the trend: pickup trucks.
The Wall Street Journal cited data from JD Power that shows truck buyers pay 61 percent more for a new pickup compared to costs 10 years ago. The average cost of a new truck today hovers around $44,000, up the 61 percent figure a decade ago. By comparison, the average new car costs $32,500 and rose 28 percent in the past decade.
Part of the pricing pressure likely comes as pickups move from workhorses to luxury vehicles. There are numerous reports from dealers that noted customers have begun to trade in German luxury cars for big, hulking trucks. Today, pickups mean something much different than their blue-collar upbringings—they’re a status symbol.
Unsurprisingly, the high prices have helped pad General Motors, Ford, and Fiat Chrysler Automobiles’ bottom lines. Although some of the truck models only account for around 10 to 15 percent of worldwide sales, the lofty price tags helped GM achieve a massive 8 percent operating margin in 2018, for example. How good is an 8 percent operating margin, you ask? It’s on par with BMW Group or Daimler, the parent automaker of Mercedes-Benz.
Ram helped FCA boast a 6.1 percent operating margin last year, an incredible feat noting the automaker relies heavily on Jeep and the truck brand to make the bulk of its cash.
It’s part of the reason why GMC has pushed its Denali sub-brand. In 2017, GMC said Denali-branded vehicles made of one-third of its sales. The average transaction price two years ago also jumped to $43,800, up 35 percent from 2007 levels. GM hopes to find similar success with Buick’s crossovers as it introduces the Avenir sub-brand on more models.
Comments
One big point to make is that luxury trucks weren’t as dominant 10 years ago. Now we have Ram Limited and Silervado High Country taking sales from the luxury sedan market. The price ceiling potential has grown massively by entering new luxury segments.
Inflation has also contributed about 18%
The little Ranger and B Series were still around 10 years ago to help bring average prices down
2009 was pushing through the recession when there was big cash discounts to move trucks
8 year financing nowadays
I have a 2012 LTZ, if I were to option a 2019 Silverado similarly, and adjust for inflation, the MRSP would be almost spot on to what the sticker price was on my truck.
EDIT: actually inflation taken into account, a 2019 crew cab short bed 5.3 LTZ with leather, console, bose, sunroof, 2spd transfer case, locking rear diff, would be CHEAPER than the sticker on my truck was.
You nailed it in my opinion, now it’s a yearly race to who can release the new range topper trim. From Denali ultimate, f150 limited, ram limited these trucks are definitely taking sales away from the premium sedan market.
Plenty to choose from for your liking…. sle’s and lt’s Equipped are priced fine taking in account inflation and the standard equipment included
and actually to add, in 2009 we were in the heart of the recession, there was big discounts on trucks to get them off lots, further driving prices down, further driving the average transaction price lower
Best news I have heard all day!
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This is not related to price hikes to trucks within recent 10yrs.
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The cereal box of the automotive world, it’s mostly air you’re paying for in the back. Cool colors and fun writing on them, too.
Very good points made about the recession and adjustment for inflation and accurate as well! I have one tiny morsel for thought. A truck was never intended to be a luxury vehicle (WAIT!! Don’t kill me yet!, I like the luxo trucks too!!) Now that they have left the farm and construction sites and have been “discovered” by those who don’t really need them but want them (nothing wrong with that, just hear me out!!) it has all but pushed the price of them beyond the budgets of the folks who still need them. I have always bought new trucks for the front line of my small business. Now, a new W/T SIlverado is costlier than a lightly used medium duty truck in my area. I can’t really see paying almost $50k for a truck that will be beat all to hell within a few years and I don’t need to buy the cheaper medium duty because it’s too much truck for what I need. It’s not making much sense. Although I understand the demand and why the manufactures push them as everyday vehicles for the huge profits, I have to wonder when will they become so popular and so expensive that only a few will remember that they were made to be….trucks. And in my opinion, a truck is a lot cooler down on the farm than it is commuting to the office.
I was at the auto show last night and to compare a truck from todatbyo 10 years ago is more than a change of 61%.
The items and options offered on these truck were not even conceived of 10 years ago let alone in most cars.
Just look atv5be dash of the big threes and it has more features than most will ever use.
My question is in the future will we have old beat up trucks as we once had as since they were simple and cheap to repair they stayed on the road. Or will we have Ram air ride trucks sitting on the bump stops parked like a old Lincoln because it is too expensive to repair.
How will future resale fair? Now old truck can sell for much more than most old cars will they hold up?