Considering investing in a pickup truck? Great – trucks are very popular thanks to their practicality and features! Furthermore, the internet has made it possible to find deals on new truck prices that might seriously shock you! If you haven’t looked at the available savings in awhile, you might be amazed to see just what’s available!
Truck- and SUV-like vehicles have seen a particular increase in popularity in recent years. In a ten-year span – from 2007 to 2017 – the market share of new upscale SUV sales has jumped from 4.2% to 7%, while the share of luxury sedans dropped from 7.6% to 4.9% .
Now, the COVID-19 pandemic has slowed things down quite a bit by causing truck shortages and price hikes. However, shopping for a truck is still worth considering since it looks like things will come back to order fairly soon.
Truck Prices May Start Coming Down After The COVID-19 Hike
Demand for trucks – especially used ones – rose considerably during the 2020 coronavirus pandemic. The reason for this was that people started thinking about their safety and decided to stay away from ride-sharing and mass transportation .
Aside from that, automakers across North America shut down many of their plants in March and April, restricting the supply of new models.
The combination of restricted supply and increased demand triggered an increase in used truck prices – to a record high of $21,557 in August, up 31.5% or $5,166 since February.
With that said, as of October 2020, things seemed to be leaning downward. The average retail price for a used vehicle was $100 less in October than in September .
Besides, Alex Yurchenko, senior vice president of data science at automotive analytics firm Black Book, thinks that the downward trend will continue through the end of 2020.
Remarkably, sales of pickup trucks held up better during the pandemic than SUV and passenger car sales. Pickup sales fell by just 18.7% from March through April, compared to 48.6% and 36.6% declines for passenger cars and SUVs respectively .
And interestingly, much of this decline is attributed to commercial and government buyers!
What Payment Options Do You Have When Shopping For A Truck?
When shopping for a truck – and for any type of car, for that matter – you have 3 options:
- Pay cash upfront without any leases or loans.
- Finance the car with a car loan.
- Lease the truck.
Paying upfront is unachievable for many people because of the costs involved. However, in the long term, you get the chance to avoid paying any interest. Plus, you won’t have to make any monthly payments after the purchase.
Car loans are great because they allow you to distribute the purchase costs over several years. Most Americans choose to finance their vehicles in one form or another. More precisely, in the second quarter of 2020, 85.5% of new vehicles bought in the US were financed .
Finally, we have truck leasing. Leases are very similar to loans in that you pay for the car on a monthly basis. However, lease agreements don’t actually make you the owner of the car . You must return the truck to the lender at the end of the lease, although you could pay a fee to acquire its ownership.
Typically, leases cost less than loans because you’re not paying off the entire purchase price of the vehicle. Plus, with leasing, you could use a car for 2-3 years, give it back to the lender, and jump onto a newer truck!
With each of these options, you may also choose between a brand-new or used truck. New trucks have zero mileage and often come with incentives like 0% financing or cashbacks. On the other hand, used trucks are much cheaper – as much as 50% sometimes!
Which purchase method to choose depends on your financial situation and expectations. You will need to check out prices in your area and figure out which option would be the best for you.
What You Can Do To Save Money On A Pickup Truck
One of the best ways to save money when buying a truck is to shop around for the best deal. However, there is more you can do:
- Get a used truck, unless you have a serious reason to want a new one. Pre-owned trucks can cost half their retail price but be like new.
- Negotiate, especially when shopping for a used truck.
- Read the fine print. Hidden fees may turn a seemingly good deal into an absolute nightmare in the long term.
- Closely follow market trends – prices change with supply and demand.
Investigate Pickup Truck Options In Your Area
Pickup truck prices may vary widely from dealer to dealer. Fortunately, thanks to the accessibility of the internet, finding a good deal is easier than ever.
In the end, be sure to look around before investing money – retailers can offer dramatically varying terms.
“Sedans Sinking Fast As Luxury-Brand Flagships”, Forbes, https://www.forbes.com/sites/jimgorzelany/2017/11/02/sedans-sinking-fast-as-luxury-brand-flagships/?sh=3d1d1b4e214c.
“Buyers traveling across the country, paying record prices for used pickups”, CNBC, https://www.cnbc.com/2020/10/19/used-pickups-selling-for-record-prices-amid-high-demand.html.
“Used vehicle prices up as supply sinks, but relief is coming”, The Detroit News, https://www.detroitnews.com/story/business/autos/2020/10/13/used-vehicle-prices-up-supply-sinks-but-relief-coming/3644066001/.
“The coronavirus pandemic can’t stop Americans from buying pickups”, USA Today, https://www.usatoday.com/story/money/cars/2020/06/15/pickup-truck-sales-covid-19-pandemic-coronavirus/5345096002/.
“Share of new vehicles with financing in the United States…”, Statista, https://www.statista.com/statistics/453000/share-of-new-vehicles-with-financing-usa/.
“Leasing vs. Buying a New Car”, Consumer Reports, https://www.consumerreports.org/buying-a-car/leasing-vs-buying-a-new-car/.