Average Pickup Transaction Price Rises – A LOT
Tim Esterdahl | Jun 13, 2013 | Comments 10
A recent survey on pickup truck transaction pricing has found they cost more, a lot more. And buyers are willing to pay for more “fancy” pickups. Is the standard, no-frills pickup being phased out by consumer demand?
Luxury pickups like this 2014 Toyota Tundra 1794 edition are helping spur a big rise in the average transaction price of pickups. If they build it, it seems consumers will willingly pay for it.
Autonews.com says that the big pickup transaction price is rising twice as fast as the industry rate. The facts are that:
Although volumes remain well below the previous peaks, average transaction prices for full-sized pickups have increased at more than double the average rate for the industry since 2005, according to Edmunds.com. And manufacturers are not creating demand artificially with unsustainable discounts.
This means that the new 2014 Toyota Tundra 1794 edition is exactly what the market ordered whether current Tundra owners like it or not. The simple truth is that the buyers are wanting this type of luxury package, are willingly paying the price for it and automakers are reaping the profits. Instead of selling 2-3 trucks to make the same profit, they simply need to sell one of the luxury trucks.
Where does this leave the “no-frills” pickup buyer? This type of truck is seemingly becoming regulated to the fleet buyer side. The sales numbers are telling automakers that the percentage of basic, retail truck buyers is diminishing. With less demand, it is basic business logic for companies to build more expensive trucks. There is now a growing divide in the full-size buyer market between the “no-frills shopper” and the “luxury, car-ride like truck buyer.” Who wins? He/she who pays more it seems.
Average pickup transaction prices are certainly on the rise. Graphic from Autonews.com
There is, of course, two sides to any argument. While, pickup shoppers are buying more luxury pickups, there are other factors in play. The new government regulations for safety and fuel economy, plus consumer demand for a more plush ride are driving up the price as well. There are simply more and more costly standard features that are incorporated on pickups these days.
The reality is simple. It is a great time to be selling pickups with high transaction prices and a hot market. On the flip side, it is a bad time for consumers looking for a cheap, reliable pickup.
What will the future hold? It is anybody’s guess, yet with more luxury editions hitting the market, CAFE regulations being implemented and consumer demand for more standard features growing, the likelihood of lower prices is low.
What do you think? Is it time for a new “no-frills” truck to hit the market or do you want one of the luxury editions?
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Filed Under: Auto News
This will blow mk’s mind here. I can see why the trend is going that way. Like myself when I bought the 07 CM Limited. I wanted the top truck on the market with all I can get in it. If I was picking my last truck to buy why not have everything in it. The resale with everything in it is higher also if I decide to trade or sell it. Now for the person who uses his/her truck daily for work may not want all gizmo’s. Now people I know who do that with their trucks opt for all gizmo’s in their truck. They can use their truck on taxes so it helps them out. Those people want to be pampered even while working on the job. It may not be the case for everyone but the ones I know here it is. Personally I don’t know what’s in the 1794. I do prefer the platinum.
How’bout a selectable locker?
🙂
-Tim
I think a better question is, how long will people be able to keep paying these ever increasing prices? If median income is 50,000 and the average truck price is now 40,000 that means around 50 percent of the population is looking at an average truck price of about what they earn in a year. I see them on the road every day. While I understand there are those who can well afford to pay for these types of toys, numbers suggest perhaps 1/2 the trucks we see are in the hands of those who really can’t afford them.
Each day we hear “we can’t pay for healthy insurance etc. etc., we need help” I suggest people can afford insurance, they choose not to and buy a 40,000 dollar truck instead.
How far can we go? Will the average 1/2 ton truck be 50,000 in 10 more years? With insurance, fuel, tires, turbo charger replacement, automatic transmission rebuilds, payments/interest, loss of principle and investment earnings power, 25 percent FICA/FED/State income tax on the 50,000 principle and 15 years after the purchase that 50,000 dollar truck will be more 80,000. Can that many people really afford these trucks? Is all of America now too big to fail. When many default with they become a consumer arm of Government Motors? Looking at my retirement savings, total assets, they have now become more than I can handle.
I for one want the old style 2 door, long bed, small engine, manual trans, manual window, manual door lock type truck with rubber floor matts which only costs 25,000 so I can use the 25,000 dollars saved to invest in appreciating assets over depreciating ones.
Good luck to all.
I think a better question would be how long will the american consumer be able to pay these ever climbing prices for luxury trucks?
Now I understand there are those who can afford to pay 50,000 plus for a luxury truck but, if median income in the US is around 50,000 and average truck prices are now 40,000 then some number under half of all the buyers are paying as much for a truck as they earn in 1 year.
Every day in the news I read over and over how we need free health care, free you name it. I submit that most can afford health care, they just choose to spend their money on a 40,000 dollar truck. Now if a person pays 40,000 for a truck and they have a gross tax load of 25 percent, they need to earn 50,000 after taxes to pay for that truck which in most cases will be worth zero in 15 years and possibley in a junk yard. I only wish my total tax load was only 25 percent.
Where are the buyers for the plain truck, small engine, manual transmission, manual windows, manual door locks which will be used to haul dirt and bricks as opposed to hauling people to church? Give me a 25000 dollar truck so I can keep the other 25000 and invest it into appreciating assets instead of deprecating trucks.
Bring on the socialism and free trucks for all then I too will get my 50,000 dollar truck with automatic everything and leather seats. Lets hope the government will give us all motor stamps to get those twin turbos fixed so we can get to the government health care clinic for our free heart transplant.
For those who earn 100,000 a year enjoy. For those who earn 40,000, the price of the average truck,,,,, you may wish to think again.
Give me liberty, lower taxes and a cheap truck, with steel wheels and a dead deer on the hood.
Larry,
As I wrote this article, all I could think about is what you will say about this. LOL!
Good comment and your perspective is always welcome.
-Tim
Tim,
Apologies for the double post. Had some trouble with my browser and then didn’t see the post on the forum and tried again. Then later they both showed up.
I have always been one to save and invest. I make it a point to try to buy the items I need rather then those I want especially for things as expansive as the modern 4WD truck. If I did not live in the mountains I would be driving a 2WD unit. Strange seeing 4WD trucks all over Southern CA.
We here in the US have had a very nice standard of living for the past 50 years and it is possible that may be ready to change. Nowhere and I mean nowhere else in the world will we find people driving around in 4 door luxury 15 MPG 50000 dollar 1/2 ton trucks like here in the US.
Where else in the world is the Tundra sold? If you move to France, Spain or Italy you might be stuck with a little Tacoma diesel with a 5 speed manual trans.
This last 5 years of a very slow recovery from our banking troubles and GDP drop could be a sign of the adjustments we are going to need to make.
I was in college in the 70’s when the oil embargoes were going on and fuel prices started to move up. We are now being told we have found lots of new oil and Nat gas and are in good shape. What people are not facing is that the market will go back to it’s wasteful days and consume any surplus very quickly. People who are ready to take the plunge and spend 50,000 on a 5.7 or 6.0 L V8 trucks may find themselves in long term trouble. 5 -7 years from now we could easily be at that 5 dollar a gallon mark again.
I advise caution.
To those at Toyota and other companies who may read this forum, we who need works trucks are still here and Toyota offers very little. We need trucks which help us make money not trucks which eat it and we will still be here looking for reasonable trucks at a fair price when the next recession rolls in. To all truck builders remember the working class people, they were the ones who go you here.
Larry,
No worries. I actually approved both posts because I thought they each had great points.
I get what you are saying about consumption, however, there has been a big increase in the amount of income for people over the last 30+ years as well. For example, on our combined income, we could afford the 1794 CrewMax pickup. No problem. Yet, I try to be a smart consumer. Just because I can afford it, doesn’t mean I need it. Sadly, there are way too many consumers who don’t feel the same way and this is why that style truck and average transaction price goes up.
I have always said that companies don’t set the price for items, consumers do. If consumers are willing to pay the higher price for an item, then that is what the company will sell it at. If consumers don’t pay the high price, the price drops until they do.
Until consumers say enough with higher prices for pickups, the average transaction price will continue to rise. That is a fact!
-Tim
100 percent agreement here. Most are way to eager to point at the supplier. It’s always the consumer/market which sets the options and the price. I am one of the few who will not buy bundled packets if they contain things I do not want.
The reason I have so few options in work trucks is that the general market is not buying them. The FEDs are also making a lot of demands which we the consumer and builder have nothing to say about.
I will encourage all to raise hell with their dealers and write to the manufactures to demand the options you want not what is in a bundle. Hold out when you can.
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