In the vast automotive market, few vehicle segments have seen prices rise quite as sharply in recent decades as full-size pickup trucks. While still extremely popular purchases for both lifestyle users and commercial work applications, the retail cost of a new truck now averages well above $60,000 – almost double the average price from 20 years ago. What’s behind the truck market’s rapid inflation?
Read on to learn how market demand, evolving feature sets, underlying body construction, and savvy branding have all enabled automakers to charge a premium on their lucrative pickup models.
5 Reasons Why Pickup Trucks Are So Expensive
1. High Consumer Demand Driving Price Tolerances
Basic economics suggests that when demand is high for a product consumers value, manufacturers can charge more and still attract buyers. Such is the case with the full-size truck category consisting of models like the Ford F-150, Chevy Silverado, Ram 1500 and others.
As best-selling vehicles year after year, automakers know they can price trucks higher because loyal customers exist both for work and recreational uses. Those looking for truck capabilities have limited alternatives, so brand loyalty runs deep. Automakers rightly surmise that many buyers will pay extra for the truck they really want.
2. Pushing Towards Luxury Features in New Models
In response to strong demand, truck manufacturers have also pushed their model mix upmarket over time. Today’s truck buyers expect more premium finishes, technology integration, and comfort features akin to a luxury sedan versus a basic work vehicle. Leather seating, entertainment systems, safety aids, and turbocharged engines were rare 20 years ago but now come standard on many retail trucks costing $60-$70,000.
Brands have introduced roomier 4-door crew cab options to accommodate families as well. While stripped-down base work truck models exist mostly for fleet sales, the bulk of retail advertising focuses on loaded configurations. Customers have shown a willingness to pay for these creature comforts.
3. Truck Platforms Benchmark Pricier SUVs
Additionally, automakers now build trucks on robust platforms shared across SUV model lines designed for superior ride quality, handling, and passenger protection. As SUV prices have themselves inflated toward premium standing, their truck-based counterparts have followed suit. Brands market the strength and durability of truck chassis and suspensions while loading them with features families desire.
By aligning trucks with more expensive SUVs, manufacturers have greater licenses to drive higher pricing since customers connect trucks to the durability required for off-road adventures rather than just work sites. The value perception exists even if most suburban drivers never go off-road.
4. Strong Brand Image and Loyalty
Underpinning automakers’ ability to charge so much is the brand equity and imagery culturally tied to pickup trucks, especially market leaders Ford and Chevy. Both brands tout their truck heritage and reliability after decades of veneration as quintessential American vehicles. Buyers identify personally with brands like the Ford F-150 or Chevy Silverado based on childhood memories of riding in their parents’ or friends’ trucks.
The strong nostalgic connections keep buyers coming back despite rising costs. Automakers leverage this emotional brand loyalty by offering buyers a chance to “join the club” when pricing trucks tens of thousands above average cars. Loyalty runs so deep that pricing becomes secondary to having that badge in the driveway.
5. High Resale Value Adds Pricing Support
Another factor allowing automakers to charge a premium for full-size trucks is the incredibly high resale values that trucks maintain in the used vehicle market. Data shows trucks often retain 60% or more of their original purchase price even after 5 years or 75,000 miles of use. Strong demand for both new and used trucks keeps trade-in and resale values propped up and is another reason why we’re seeing so many people cash out equity with car and semi truck title loans.
Since buyers know they’ll recoup more money later by trading in their truck versus other vehicles, they become more comfortable paying the higher initial purchase prices. If you can spend $60,000 on a new truck but get $30,000 or more back after a few years of ownership, the net cost of buying that truck reduces considerably. The math makes pricing tolerances rise.
Conclusion
Savvy manufacturers and effective marketing have combined to make the full-size pickup truck market a price haven compared to other vehicle segments. For truck devotees, the functionality, identity, and status offered by today’s luxury-leaning pickup trucks justify the inflated price tags. Brand loyalty keeps buyers coming back regardless of cost. As long as demand stays high, automakers can expect their premium truck pricing power to carry on indefinitely.
