As we are just out of the coronavirus pandemic that led to factory shutdowns and then the shortage of semiconductor chips in all parts of the world, the manufacturing of trucks has reduced immensely, and the price is expected to go higher.
iSeeCars, a platform is known for its deep research in the automobile industry, released a report in October of 2020, analyzing the prices of automobiles over several years. They started their ana lysis from 2014 to 2019, and they covered over 1.3 million used car sales. Between the two time periods, they compared the average listing prices of all models. In this price analysis, they didn’t include heavy-duty trucks.
The price of used cars increased by 9.5% on average. Most of the vehicles in this category were pickup trucks. The truck with the most significant increase in price every year is the RAM 1500, with an average price increase of 19.7% (both used and new). However, not all trucks increased in value; some still retained their value.
The second and third trucks with an increase in value year after year are the GMC Sierra 1500 and Toyota Tundra.
It’s undeniable that the pandemic might have caused an increase in price due to different factors related to demand and supply, but you should know that trucks have been expensive before the pandemic.
Over the past decade, truck buyers have been paying mor e than 61% for trucks, which isn’t a slight increase. Over the past 30 years, it looks even more dramatic. Check the MSRP of the truck you own or any truck of your choice in the 1990s, then check its MSRP for 2020. Try adjusting the price to inflation, and you’ll see the immense increase in price, which is about 30% or more, depending on the maker and model.
Check that of a sedan, and you’ll notice its price is still the same as 20 years ago.
Why are trucks so expensive? There are several reasons why, and you should know that the price of trucks is not just high, it is also increasing, and in the coming years, they might even be more expensive than they are now. Here are some of the reasons why —
1. Impressive functionality
This is expected. Every owner knows pickup trucks are very functional. When comparing them to other types of vehicles, they are the most versatile, and this shouldn’t come as a surprise if you consider the rugged construction of trucks. Besides, they have incredible space which can fit about five passengers comfortably, then extra space you can use to tow or haul things.
Trucks are mainly used to haul heavy things. However, with their ample space for loads, you can load up anything, no matter how massive it is.
Additionally, trucks can travel to places that a hatchback or sedans can’t access. With the high ground clearance of trucks, you’ll be able to drive in rough terrains and drive safely in bad weather without worrying about being stuck, unlike other vehicles. The only vehicle with this level of performance is SUV.
2. Powerful Engines
In vehicles, the engine is the most expensive part, and trucks have even more functional ones. In recent times, the engines of trucks have gotten much more powerful, but this improvement comes with a price, and it is a hefty one.
Engine technology keeps advancing, so trucks are getting more capable than ever; however, with this advancement comes costly development and extensive research, which will have to be passed down to customers.
But in the long run, this improves the efficiency of your work that involves the use of trucks. So you’ll have to determine within yourself if this is a worthy investment. If it’s not, then you can settle for an old model, such as the early 2000’s Toyota Tacoma, a model known for its affordability, but it’s a small-sized truck.
3. Advanced Materials
Modern trucks are already being fitted with innovative automotive engineering. This includes making them more fuel-efficient, lighter, and with better capabilities. In addition, trucks have experienced some novel, innovative design and better manufacturing techniques over the years than some vehicles.
On the fifth-generation Sierra, GMC introduced the carbon fiber bed so it can be more durable. This addition made the truck more robust and lightweight, but the material is costly.
data-preserver-spaces=”true”>Ford also constructed body panels of the F-150 with aluminum, and aluminum is much lighter and cheaper than steel that trucks are usually made of. But, just like GMC carbon-fiber bed, using aluminum in trucks isn’t as cheap as consumers will expect, even though its cost is lower than steel.
With these advancements and how expensive they can be, someone will have to cover the costs, and that is the customer. Since you’re getting something beyond average, it’s expected that you’ll be willing to pay above the average price.
4 Better Fuel-Efficiency
In the past two decades, trucks fuel consumption has seen significant improvements. Hatchbacks and sedans have gone through this advancement which made them more fuel-efficient, but now trucks enjoy these improvements.
With fuel injection and turbocharging, different truck models now have fuel-efficient engines without having to sacrifice power. Some mid-size trucks now run on diesel engines, which is more expensive but with better fuel efficiency, just like heavy-duty trucks that enjoyed those benefits in the past.
Then there are hybrid trucks. Since the discontinuation of the Chevrolet Silverado hybrid back in the 2000s, hybrid trucks have come back stronger. Maverick hybrid, Toyota Tundra hybrid, among others, are some great examples of functional hybrid trucks.
To increase the mileage of trucks, considering how heavy and oversized they are, it will be difficult and more expensive than those of smaller vehicles.
So you can see, with improvements in emissions and fuel efficiency, you will enjoy your truck more, but it comes with a price.
5. New Features
Nowadays, you’ll find trucks with towing cameras, in-bed storage systems, built-in power generators, among others. These innovative features in trucks make them more versatile, and they’re easier to use for specific jobs like towing, clearing snow, delivery, and so on.
For instance, you’ll find most GMC Sierra with GMC’s innovative MultiPro Tailgate. On RAM 1500, you’ll see a similar Multifunction tailgate (but less sophisticated) and the RamBox lockable storage units.
While the Ford F150 has an onboard power generator, and the Honda Ridgeline has a spacious in-bed trunk for your belongings.
Something you’ll find on lots of trucks is a backup camera. These cameras are installed to make it easier for a driver to drive around quickly.
All these make driving more efficient, but with a more significant cost. The more new features that are added, the more expensive it gets.
Why Are New Trucks Expensive?
why are trucks so expensiveApart from demand and supply and the global shortage of semiconductor chips, there are other reasons why new trucks are rising in price. While those as mentioned above might be considered the chief reasons for this expensiveness, there are two other reasons —
The new stylish look of trucks means they will be more coveted by the public. Trucks no longer resemble the terribly designed workhorses they once looked like some decades ago. Nowadays, they look more stylish, and sitting inside one is more comfortable than ever.
They are now like small relaxation hubs. You’ll find massive touchscreen systems in them, wireless charging, premium leather upholstery, heated steering wheels, panoramic sunroofs, and so on. All these features are things that will make your journey comfortable.
Alongside these features is also an array of driver safety and assistance features that allows you to drive safely when traveling. Trucks now have self-driving features.
Anything that looks luxurious will always be at a premium price, not only vehicles but every luxurious object. With the luxurious options, you shouldn’t be surprised that they cost more than expected.
2 . Popularity
In these three countries — Canada, the United States, and Australia, trucks have gotten more popular, so the theory of demand and supply comes into play.
Trucks are no longer used for just towing, delivery, and so on; they’re now used by some as a family car because it has all the things that make a car comfy: technology, efficient fuel, etc.
Besides, manufacturers are starting to design trucks to look more appealing than some SUVs, sedans, and hatchbacks. Trucks don’t look crude as they did in the ’90s.
With the demand for trucks getting stronger, customers are also willing to pay the prices even though they keep going higher; this makes trucks keep getting expensive, and who knows, they might become unaffordable for the average person.
Why Are Used Trucks Expensive?
The reason for this is because the demand for trucks is more than the supply. On the second-hand market, there are fewer used trucks, just like there are fewer new ones. The cause of this dwindling supply can be traced back to the Great Depression. If you were born during that period or read about it, you’ll know this was a period of great strife. Manufacturers reduced the production of trucks to focus more on affordable/smaller vehicles because buyers wanted due to their financial capability.
A lot of people expect used trucks to be less expensive, but that is not the case. They’re still high in price, just like new ones. Even though they’re cheaper than new ones, their price range is still high for most, compared to how cheap it is to get second-hand sedans or hatchbacks.
Besides, look around you; how many trucks do you see on the roads? I bet they are not half as much as other vehicles. Moreover, today’s work culture is different. We all work in offices, and a truck isn’t really a corporate thing to drive to your workplace. So only a few people own them.
Another reason is the longevity of trucks. They’re very durable, so they can last for many years. In addition, since they are built to handle heavy-duty jobs, they can handle the challenges that come with rough terrains and use.
With a low supply of trucks and increasing demand, what you should expect is higher prices. And buyers are willing to pay the asking price for these vehicles because they know it still has more years to function efficiently.
While most expect a rise in years to come, others are confident that the price will go lower. They believe this stark decline in trucks supply will correct itself because the significant reason why trucks aren’t much from a decade or more ago is because of the production cut by automobile manufacturers.
With the great depression came a shift in the buying decision of people. Most shifted from owning expensive trucks to owning more affordable sedans, hatchbacks, coupes, and so on. But even though the great depression has ended, the production of trucks hasn’t seen a significant rise.
With demand for trucks increasing in recent times, it’s believed that automobile manufacturers might have to consider producing more trucks to meet the demands. However, if this will happen in a few years is very hard to tell, considering the shortage of some materials.