Pickups are pricing out the average new vehicle buyer
Truck enthusiasts Ernest Johnson and Mike Herron couldn’t be more different.
Johnson, 80, lives in Pontiac, Mich. He retired from General Motors in 1999 where he drove a tractortrailer delivery truck for 35 years.
Meanwhile, Herron, 65, lives in Durant, Okla., about 50 miles north of Dallas. He owns four businesses and is a real estate investor who has driven BMW sports cars for the past decade.
Yet, each paid an amount equal to that of a small house to buy new 2019 GM pickups.
“The price is a little high, but with all the technology on it, I guess it’s worth it,” said Johnson. “But, in the future, it’s something a lot of people won’t be able to afford.”
Johnson paid nearly $60,000 for his 2019 Chevrolet Silverado Z71, he said. For that price, he will keep it a long time, saying, “I won’t have a choice.”
The prices people are paying for pickups have steadily risen over the past decade pushing the trucks further and further out of reach for average consumers. In fact, some fullsize pickups can cost more than $100,000.
Edmunds’ data shows, through September, the average transaction price for a full-size pickup is $48,377, a 48-percent boost from 10 years ago and a 19-percent hike from 2013 for the same period. For that price, a person could buy a Mercedes-Benz or BMW luxury sedan.
“A 48-percent increase in price is the highest price increase for that time period out of all vehicle categories,” said Ivan Drury, senior analyst at Edmunds. “Even at $45,000, it prices a lot of people out.”
How much?
According to data from Kelley Blue Book, in September 2013, the average transaction price for a full-size pickup was $41,680. This September, it was $48,369.
Yet the expectations of most pickup buyers fall far below what they actually end up paying, according to data from Cox Automotive, which owns Kelley Blue Book.
Most buyers expect to pay $26,699 for a new midsize pickup, Cox data show.
But, the average transaction price through August 2018 is actually $33,275.
Similarly, the expected price of a full-size pickup is $38,529, but the average transaction price for the year through August is $47,987.
Last month, the average transaction price for the Ford F-series was $46,591. The Chevrolet Silverado was $42,162 and the Ram came in at $42,484, according to J.D. Power’s Power Information Network data. Those figures include 2018 and 2019 model-year pickups.
Chevrolet only started trickling out the high-end, more expensive, redesigned 2019 Silverado in August. GMC also started delivering the redesigned option like a ventilated seat versus a cloth seat and it’s 90 degrees outside, it becomes a very compelling argument to say yes,” said Drury. “Ten years ago, comfort packages weren’t offered on trucks. People are saying, ‘I want those even if those vehicles are used to haul mulch.’ “
Taking a look at the median purchase price rather than the average purchase price, the numbers land a little differently, although still climb higher. The median purchase price for a pickup nine years ago was $31,000. It rose to $37,000 in 2013. Today, it is $43,000, said Alexander Edwards, president of consultancy Strategic Vision in San Diego.
Meanwhile, the median household income of the truck buyer also has been on the rise, Edwards said. Through August, that metric is $100,305 a year compared with the median household income of a general new vehicle buyer at $95,355, he said. But in 2009, the median household income for general new car buyers was $83,516 versus median household income of pickup buyers, which was $76,660, he said. The U.S. Census Bureau puts the median household income in the United States at about $59,000.
“So those who purchase a truck have even more money than those who buy a new car,” said Strategic Vision’s Edwards. And, that’s even as the median purchase price of a new vehicle is $34,000, well below that of a pickup, he said. “Yet, the new vehicle buyers are more likely to be college-educated than those buying new pickups.”
Only 15 percent of full-size pickup buyers use the trucks for business, Edwards said. Of those who buy heavy-duty pickups, only about a quarter of them use them for work, he said. Yet, when asked whether pickup owners use their pickups to carry their kids daily, 12 percent said yes, compared with just 7 percent in 2009, he said.
“Trucks are definitely not priced in the range of your normal U.S. buyer,” Edwards said. “For some, it’s even possible to have a BMW and a full-size truck in the garage.”