The Cost of False Prosperity

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Pick-up trucks – even full-sized ones – used to be less expensive than cars and so were a more affordable alternative to them. With the added plus of being more useful.

They are still useful.

But what does that matter if you can’t afford to buy one?

Pickups are now among the most expensive new vehicles on the market. In part, because of their size. No one sells a compact-sized, basic pick-up anymore (excepting the Ford Maverick, which is a hybrid car with a truck-looking body). The others – models like the Nissan Frontier, Toyota Tacoma and Ford Ranger – which were compact-sized trucks and had starting prices in the low-mid teens as recently as the early-mid 2000s – are now mid-sized trucks almost as big as ’90s era full-size trucks.

They are priced accordingly.

But it is the ballistic increase in the prices of current full-sized trucks that is most remarkable.

In 1989, Ford still made a basic work truck version of its popular F-150 pick-up. It came with an inline six engine, a manual transmission – and without air conditioning or power windows. That is why it only cost $11,001 dollars brand-new. A 2023 F-150 comes standard with power everything, AC, an automatic transmission and a V6 engine.

And that is why it stickers for $34,585.

Yes, there are 34 years of currency devaluation in between these two trucks. But even factoring in the devaluation of the buying power of the fiat dollar – the more accurate term for what is usually styled “inflation” – there is still a very real increase in the actual cost of a new F-150 vs. the cost of one back then amounting to around $8,000. Which amounts to around $3,500 in 1989 fiat dollars, or about a third again the cost of a brand-new 1989 F-150.

How many people, back in ’89, could have swung that?

The answer is – not as many. Chiefly, because the average new car (and truck) loan back in 1989 was for just four years, as it had been for many years prior. This served as a brake on new vehicle prices generally because not many people could handle what would have been the monthly payment on a vehicle that cost a third-again as much factored over just four years.

They therefore bought – financed – what they could afford. And, for many, that was a car (or truck) without what were then cost-adding options such as air conditioning, an automatic transmission and powered rather than manual roll-up windows and door locks, etc. Those things were available – for those who could afford to buy (and finance) them. But the take-home point is that you didn’t have to buy those options and for that reason more people could afford to buy – and pay off much sooner – a brand-new vehicle.

And – after you paid it off – you stopped making payments on it. Not only did you own your vehicle sooner, you were out of debt sooner – which made it possible to save rather than spend. To accrue – rather than be bled of – capital.

Maybe your ’89 truck wasn’t as luxurious as a new F-150.

But you weren’t as poor.

We weren’t as poor. As a nation, which then still lived largely within its means. We no longer do – on a national or individual level – and an excellent barometer of that fact is the fact that the average new vehicle loan today is two years longer than it was back in ’89. Two more years (not infrequently, three more years) of monthly payments being required to spread out the third-again increase in the cost of the typical new vehicle, which would otherwise be unaffordable for many people – as luxury vehicles were for most people before new vehicle loans went from four years to six (and rising).

What’s happened then, over the past 30-something years is that all vehicles – not just trucks – have become luxury vehicles in that all of them, even what are still misleadingly styled “economy” cars, come standard with the features and equipment that used to be optional in most vehicles and which were once-upon-a-time standard equipment only in luxury vehicles. These latter constituted a minority of new vehicles on the market for the simple reason that affluent buyers are in the minority. Most buyers are working and middle class people who cannot afford a luxury vehicle.

Unless, of course, they sign up for a debt-indenture that lasts six years or longer.

And that is exactly what has happened and it is precisely why the actual cost of every new vehicle – adjusted for “inflation” – is so much higher than it was in the days when buyers were obliged to buy what they could afford. And the car manufacturers were for that reason obliged to manufacture the majority of the cars they made to meet that requirement.

It is why there were – until the early-mid 2000s – several compact-sized pick-ups on the market such as the Nissan Frontier, Toyota Tacoma and Ford Ranger that one could buy for around $12,000. Today, these trucks have been upsized – and are priced accordingly.

And it is why full-size trucks have been super-sized and are more luxurious than the most luxury cars once were.

Most people cannot afford this – just as they couldn’t back in the ’80s and prior. But they are able to finance it, which creates the dangerous illusion that they can “afford” it. And it makes it harder for those who know they cannot afford it – and don’t buy into it – to be able to afford to buy anything that’s new. The widespread acceptance of serial debt serving as a kind of financial rip-tide that drags all of us along for the ride. Just the same with respect to housing – and many other things besides.

This will continue until it stops. Probably suddenly.

. . .

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  1. Almost bought a 1989 Ford F-150 back in October. A 6-cylinder with a clutch and a floor shift, changed my mind and bought a newer Ford.

    Maybe should have bought the ’89 model. Still can, I guess.

    If you have one of those super bright flashlights, 10000 to 100000 lumen, you have a weapon, blind somebody temporarily and they will reel. 250 dollars for a flashlight gets spend-y.

    Oodles of light as bright as the sun.

    Gerald Celente asks a question: “What God supports war?”

    Celente calls bs when he sees the words ‘In God We Trust’.

    Gerald cusses at those Wall Street bums quite a bit. Goes from ludicrous speed to plaid when he hollers his biased opinions.

    Steady losing means you ain’t using what you really think is right

    You got news for me

    I got nothin’ for you

    Don’t pin your blues on me

    Just go ahead and do whatever you wish to

    Oodles of light what beautiful sight

    Both of God’s eyes are shining tonight

    Rays and beams of incredible dreams and I am a quiet man

    – John Prine, Quiet Man

  2. To be fair, the increase is due in part to uncle sam’s mandates of safety & emissions.
    No more TBI or carbs, 100 air bags, oodles of sensors.
    Some you don’t get to choose: ABS, traction control, electric stabilization.
    Even the base model work trucks don’t have options for manual anything. Nothing the consumer can do.

    The question is why did people choose trucks over cars? I don’t know the answer. I use my truck for hunting and hauling. Others may not need them but chose them, and when they did, they wanted the amenities of cars. And many are quite willing to pay for it.
    The answer to that part may be the low cost of borrowing.

    • Once upon a time, they may have chosen them because they were cheaper. Now, with the infusion of Urban Cowboys and Goat Ropers, I suspect it’s to accommodate other “short comings”. I would bet that if you tour a parking lot, most of the trucks will show no evidence of actually carrying anything that a truck is needed to carry. Paint in the bed in prime condition.
      My former wife nearly had a heart attack when I brought home a new truck, and promptly slid a gang box in the bed, skinning off a significant amount of paint. Which was of no concern to me.

      • haha, John, so true on the bed condition. I do the same and friends would cringe when I did it. I told them that in 20 years when I trade them in every 3 +/- years no dealer ever looked in the bed, they want the late model truck on their lot, period.
        My trucks today. come with ‘sprayed in liners’ so almost zero damage but I abuse them just the same.
        And to answer Dan a little. I was mostly a road warrior for 25+ years, not so much now, but I put 30-50K mi. per year and when you live on the road, you want a big vehicle that ride nice and has room to move around. When the big cars started going away, like the RWD Caprice, Crown Vic, etc…. us road warriors were almost forced into the growing CC truck, and Suburban type vehicles. And we didn’t like them as much because they rode like trucks and the interiors weren’t as comfortable, but they got better every cycle and we persevered only because there was little options. And why my current ram CC V8 isd my utopia vehicle.

  3. A lot of the people paying stupid money for trucks get it from having dual incomes, often on the government grift. Cops and corrections officers all seem to have monster trucks.

    I pulled into the local back-street gun shop last year and there was a jacked-up F-150 Raptor parked there, those things are $80-90k. I thought “Who the hell has the money for that thing around here? Must be a cop.” Sure enough, it was an off-duty trooper ($150k base salary).

    By contrast the retired dairy farmer who lets me hunt his land has a 1978 F-150 as his only truck.

    • Hose heroes too. 80-100k hooked up 2500s and F-250s with rims and knobby tires seem to be standard issue for that crowd. You can tell them by the fasces on the front plates and/or window stickers.

      • Typical hose monkey ride:
        Bright red 4wd, jacked up as high as possible, minimum 4 shocks per wheel, “road grader” tires on bright, shiny rims. Not a scratch, nor a speck of dust on them, because they never go off the pavement. Stylin’ it, because they can, being paid out of our tax dollars. “Retired” and drawing a full pension @ age ~50, again on our dime, free to “work” for another public agency and draw a second salary for as long as they want.

        Meanwhile, while “our hero” is sleeping @ the fire station, for pay, wifey is banging whoever she feels like, for kicks. Seen it happen, never partook of it (and wouldn’t, myself).

  4. The other thing that happened in the 1990s was a paydown of debt. Specifically the governement kind. Or at least there was an attempt thanks to Gingritch and the contract for America. Funny that Al Gore ran on that semi-balanced budget even when the Democratic pundits were calling it the “Contract ON America.” Hell, Bush II was on track to set the record for vacation time.

    We all know what happened next.

    I think I was making about $30000/year back then. Not bad money, but not great money either. I bought used cars after going through a few hand-me-downs, financing more than I should have because I was still smoking back then. The nice thing about used was that I could get more accessories for my buck than buying new. A lot of people were buying off-lease BMWs and Lexus for not a lot of money. People bought pickups and never sold them because the book value was so low, so they just kept them in the side yard.

    • RK,
      “a paydown of debt. Specifically the government kind.”
      Which was accomplished by raiding the so called SS “trust” fund. Filling it with IOUs.

  5. Today’s trucks are nothing like the trucks of even the 80’s, these things have more luxury amenities and a Mercedes S class of not that many years ago. My neighbors Silverado is amazing but way over done for its supposed mission.
    That being said, that Ram TRX is looking mighty tempting….

    • Alex.
      A friend bought a new Dodge pickup the year they radically changed the body style to the Studebaker look, don’t recall exactly when. He was herding some cows through a gate, and one balked. So he pulled up to it in his truck and gave it a bump. $10,000 in damage, doing something he had done a number of times before in older trucks without ANY damage.

  6. In 1986 I bought a new Isuzu Trooper 2 ….I think the thing cost 11k. It had nothing. no A/C manual trans and transfer case no radio crank up windows…It was the two door model that had so much room in the back you could sleep in the back.I drove that dam thing almost 25 years……Wish I still had it.

    • Hi Zane,

      I owned the Rodeo from Isuzu. That sucker was a tank. I purchased it new and drove it for 217K miles. Turned around and sold it for a $1K. Tried locating one for my teenagers to learn how to drive about a year ago. Can’t find them in my area. It is a bummer. They were well made (and affordable) autos.

  7. It’s the dumbing down of math skills thanks to public “education” teaching calculus rather than basic math and how compound interest works. The hucksters have managed to get everyone to focus on the monthly payment rather than the actual cost, so you end up paying almost twice the actual cash price….forever since they’ll get you into another new car once the original is out of warranty, conveniently timed for the life of the loan.
    Mortgages are even worse, probably pay back 2-1/2 times the price of the house, but oh what a great monthly payment.

    • hi, Mike,
      Yeah, no one should be allowed to graduate high school without an understanding of consumer finance. I think some schools have started to require this knowledge, but they certainly all should.

      Problem is, some rice bowls will get broken. I had an automotive F & I guy tell me, many years ago, that they pull the wool over customers eyes every day, and make more money on F & I than they do selling cars.

    • Mike,
      Also getting them to pursue instant gratification. Why wait when you can have it all now? For a “modest” fee of course.
      I was once at a check out line at a Walmart, and the couple in front of me had a cart full of junk for Christmas. The gal asked the guy, “can we afford all this?” to which the guy replied “sure, though the credit card bill might be hard”. Left me speechless.
      Just because you can afford a particular car/truck payment now does not mean you will next year. Much less in 5 years. The way things are going now there will likely be a lot of repossessed vehicles for sale in the coming year. As incomes “unexpectedly” fall.

  8. Our 1991 Silverado C2500 std. cab 8’ bed looks like a compact now. A new Silverado pulled up next to me. I looked over the door handle was a bit above my sight line, ridiculous.

    Another modern feature they can eliminate, leather seats. The ‘91 has a cloth interior that still looks great, no splits, tears, only wear mark is a 2” circle in the drivers side seat back. I guess you’d call it a corduroy like material and it’s very comfortable. The leather quality has also gone south the seats in my 2018 Grand Cherokee already look like garbage. Drivers side seat bolster a wrinkled mess.

    Since a truck is, well, a truck and designed for real work they last a long time as the above comments and mine are evidence. Our ‘91 has original suspension bushings and ball joints, one set of shocks, original wheel bearings. Beefy frame, big brakes so lots of life especially in non-commercial use. Body on frame helps keep the interior quiet. In our small town/rural area there are dozens of ‘90s pickups and many are small business work trucks still in service.

    • Hi Sparkey,

      Amen. I cannot get over how yuge the new half-tons are. And tall. They all seem lifted. It makes the bed awkward to access. The width makes them awkward to park. But what turns me off the most is how over-equipped they are. Which is why they’re so expensive. And it’s chiefly due to people buying what most of the them can’t afford.

      Just like houses.

      • To each his own Eric. I absolutely love that the current 1/2 tons are huge. I even ordered the slightly longer bed for both my rams. I haven’t been this vehicle happy in 20+ years since GM stopped making the great 1500HD model (CC, larger 6.0 engine, not shorty bed, good ride).
        Yes, they are tall, yes they are big. You just have to adjust. Pluses and minus for everything.
        Yes, they are harder to park, don’t care.
        Yes, you can’t reach in the side of the bed, so I open the tailgate, or get in.
        Yes, the interiors are the nicer now than my old caddy’s, love them,
        Yes, the back seats are bigger than M-B S-class, we use every inch of it, wish it were even bigger.
        Yes, they are buko bucks, but relative. I was able to trade two vehicle (300 sedan and a pickup) for one do-it-all that cost less overall MSPR than the two.
        Yes, they ride (my ram does) better than prior caddy’s i’ve owned.
        Yes, they are wider. Don’t like that very much, but I love what it rewards you with inside.
        Yes, I wish they still made no-frills trucks of the 90’s vintage, but not going to happen in our current usa-ponzi scheme economy.
        Just my 2-cents from a different perspective.

      • “ is how over-equipped they are “

        Oh yes – just saw the TV ad for a Denali, driver and passenger doing patty cakes while in self drive mode, including passing. Can’t believe people find this appealing.
        PT Barnum laughing his a** off from beyond.

        Buddy’s Tesla, we’re tooling along he’s says “ watch this, self drive! “. Was OK till the sun popped out shining off the wet road, car freaks darting side to side, can’t see in the glare. Works till it doesn’t & you better have quick reflexes.

  9. Does Ford sell a “stripped” version of the Maverick in Mexico, without the EcoBoost, hybrid drive, or automatic transmission?

    Something like that priced at $17k here in the US would *sell*.

    • The most “stripped” version they have is the XL hybrid. In 2022 it stickered for $19,995 plus shipping. So many people ordered them, including me, that Ford could not build them all. My ’22 was canceled and moved to a ’23. For ’23 Ford raised the base price $2000 and only accepted new orders for one week, back in September. Mine will get the lower ’22 price but if they build it this month as they say it will have been a 15-month wait. Dealers are routinely scalping the rare stock Mavericks they have in inventory for $5-10k over MSRP.

      • I saw about a half dozen stripped white 2022 Mavericks stickered for $19,995 hidden in the fleet section of a dealer’s lot about six months ago. The hybrid makes sense for service company vehicles.

        I doubt anyone outside of good fleet customers took delivery at that sub $20k price. The tactic of the upgrade offer is pretty common with Ford as of late, blaming the “chip shortage”.

        • In my area, you can’t find a new maverick anywhere within 250 miles, at any price. Went away for the weekend couple weeks ago, about 100 miles from home. Drove by a dinky little Ford dealer in the middle of nowhere, and there was an Area 51 maverick in the front row. Took me about 10 miles to convince the wife to let me turn around and go back to check it out. The second I pulled in the lot, I see a sales guy moving it out back. Asked him about it, he says it came in three hours ago and he sold it 5 minutes ago. Wouldn’t tell me for how much. But, get this, Carmax has a bunch of used ones, and they’re getting 35k for a base XL. For a used one! That’s 10 grand more than sticker on a new one, and Carmax doesn’t dicker. As far as I can tell, the hybrids are non existent, new or used. Been buying cars for almost 60 years now, never seen a market as crazy and effed up like this.

          • Hi Floriduh,

            This seems to be the case nationally with regard to the Maverick. It bears out my hunch that the market is desperate for a $20k small truck. I hope someone else builds another like it. The 40 MPG thing is especially appealing, too.

          • “Took me about 10 miles to convince the wife to let me turn around and go back to check it out.”

            Should have said “Wife, I’m turning around right now to check that out.” Who was behind the wheel — you or her? You’re the captain of the ship…

  10. For most of the last decade, thanks to the artificially low loan rates, it was possible for F&I rooms to put someone into a $40,000 truck with a $500/month car payment, which seemed to be the “affordable” level for a lot of households, even of more modest means.

    That may change now that 2% loans are no longer available and a lot of F&I rooms’ antics in many deals are going to get closer scrutiny as defaults rise, particularly from Ford Credit and, if the Fed no longer owns a controlling stake, Ally, the former financing arms of GM and Chrysler.

  11. I remember my first truck, what the rest of the world would call a Toyota Hi-Lux, but they just called the pickup here. It had vinyl seats, a long-throw shifter, thin vinyl on the floorboards and didn’t even come with a tape deck. Cripes, my old man had to pay extra for cruise control and A/C, which is a necessity in the South.

    It was simple. It didn’t even have 100 hp until I replaced the asthmatic two-barrel carb for a four-barrel unit, which gave it some more get up and go.

    But it got me where I needed to go. It could tow a little john boat and haul my band’s amps and drum kit. It was decently good on gas (about 25 in the city, maybe 30 on the highway) and was easy to park. Now the shifter was notchy and rough and the clutch took some getting used to, but it had an honesty that modern vehicles lack.

    Crazy thing is I sold it after I got a new car for college and the man whom I sold it to is still driving it, 564k miles later, every day to work and back!

    I have a Tundra now that I bought used before the pandemic. It’s gigantic. It has more power than a 70s muscle car and swills gas like Nancy Pelosi sucks down Vermouth. It is 5 million times more capable than any sane person would need and it cost a mint new. The normal person who tows a small boat or a caravan needs something maybe smaller than a Ridgeline with a V-6 and nothing more.

  12. ‘But they are able to finance it, which creates the dangerous illusion that they can “afford” it.’ — eric

    And now, besides the steady growth of prices, interest rates have gone up too. This produced immediate havoc in the housing market.

    One Band-Aid is 3-2-1 buydowns, in which the home borrower pays a 3% lower rate the first year; 2% lower the second year, 1% lower the third year, then full freight thereafter. This allows borrowers who can’t qualify at a 7% interest rate to pass muster at 4%. Wage inflation, presumably, will raise their income as the rate subsidy tapers off.

    Probably auto loans are too short for the 3-2-1 gimmick, though 2-1 (which also exists for mortgages) might work. Trouble is, too many buyers pumped up on covid stimmies overpaid, and repos already are on the rise. So creditors are nervous.

    Auto makers are headed for a total rethink induced by ‘externalities,’ as eclownomists call them — such as the recession that’s now beginning, though the NBER (the official arbiter of the business cycle) probably won’t call it till next year.

    EeeVees and new battery plants and charger networks are the equivalent of investing in tack and buggy whips and networks of stables in 1907, just as Henry Ford was about to unveil the Model T in 1908. That’s how you go bankrupt: gradually, then suddenly.

  13. >$11,001 dollars brand-new.
    Discounts were available.
    I paid just over $7,000 for my new 1989 F150 in XL trim.
    Advertised price, no haggling required.

    300 CID inline 6
    4 speed stick (Borg-Warner T18, 3 + granny)
    Single cab, long bed, dual fuel tanks.
    Factory AC, power steering, AM radio + cassette tape player.
    Roll up windows.
    Dealer had three identically equipped, differing only by paint color.

    I paid cash, and am still driving the vehicle today.
    It was then, and is now, my primary transportation.

    • When my 2004 Chevrolet rusted away in 2018 I decided to build a simple and durable truck that would last me at least 25 years. I found a 79 F150 long bed with very little rust. An industrial 300-6 with 22.5 hours on the meter was purchased from a small town water plant. It replaced the tired 400 that was knocking hard. A new radiator and heater core was installed. New belts and hoses were installed. The NP 4 speed manual only needed some new oil. Both differentials were refreshed with new oil and gaskets. The transfer case was checked and new oil put into it. Wheel seals and bearings were replaced all around. Steering and suspension systems were restored to slightly better than original. A new wiring harness was put in to replace the spliced all to beat hell old one. The beat up bed was scrapped and a steel flatbed with wooden floor and a tool box replaced it. The cab was in decent condition so it received a sanding/primer/paint (dark copper with black stripes). The bench seat was restored with new foam and a nice vinyl cover. Carpet was removed and interior floors were sanded and painted black and then a sound deadener put down followed by a thick rubber mat. All new weatherstripping and window seals were installed. A new set of wheels and tires were added. It is now in first rate working order. It took about a year and a half to do it but was drivable throughout that time. It should last me the rest of my life as a very usable truck for hunting and as a second vehicle. Total cost has been about $12,000-14,000. It gets loads of compliments wherever I drive it.

  14. Not to mention the hidden inflation of loan interest for an additional 2-4 years of financing. Having spent 25 of my working years working out of a pickup, the last one being an ’89, the “new” ones are monstrosities. They are HUGE, and full of gadgets no one wants or needs in a working truck. And the abolition of the compact truck is absurd. My ’97 Tacoma is a jewel, as I’m sure Eric views his Nissan. It’s small, so it can go places a full size can’t, be parked within a normal parking space, and burns less fuel. I still remember about 10 years ago when a coworker bought a new Tacoma, and I was astonished when I saw the badge. I initially had no doubt it was a full size truck.
    We have been financing our lifestyle with debt for far too long, and for far too much. Which adds to inflation by the debtor’s ability to pay more, so the price goes up. The piper will be paid.

    • JK,

      I parked my 23-year-old Sierra next to a late model Tacoma a while back. It had not occurred to me how much physically larger new trucks are. They’re both still half ton trucks yet the Tacoma (off the lot) was noticeably taller, longer, and wider.


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