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.
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.
. . .
If you like what you’ve found here please consider supporting EPautos.
PS: Get an EPautos magnet or sticker or coaster in return for a $20 or more one-time donation or a $10 or more monthly recurring donation. (Please be sure to tell us you want a magnet or sticker or coaster – and also, provide an address, so we know where to mail the thing!)
My eBook about car buying (new and used) is also available for your favorite price – free! Click here. If that fails, email me at EPeters952@yahoo.com and I will send you a copy directly!