New Trucks are Hot, Prices Surge. But Cars Face Carmageddon. And Total Sales Fall

Americans love paying big profit margins for big equipment, and automakers love them for it, but total sales are declining, and something doesn’t add up.

The average transaction price of the vehicles sold by Fiat Chrysler jumped 5% in January compared to a year ago; for vehicles sold by Ford Motor Company, they rose 3.4%; for GM 2.4%; for Subaru 5.4%; for Toyota 3.0%.

For the industry as a whole, the average transaction price in January, according to estimates by Kelley Blue Book, jumped by $1,481, or by 4.2% from a year earlier, to $37,149. These are based on prices paid by retail customers before factory incentives are applied. The average transaction price for full-size pickup trucks jumped by 5.3%, or by $2,500 from a year ago, to nearly $50,000. But Americans spurned the $16,000 small cars.

This has been the theme year after year: higher, and sometimes much higher dollar amounts for new vehicles, particularly trucks, even as the overall number of new vehicles sold has declined.

New vehicle sales in the US peaked in 2016. For the three US brands, for Toyota, and some other automakers, they’d peaked in 2015.  In 2018, new-vehicle sales, at 17.3 million vehicles, where below where they’d been in 2015 and below where they’d been in 2000.

While this has caused a bunch of gray hairs because over the longer term, this is not the way to go, automakers have focused on what Wall Street wants to hear – particularly Ford, whose sales dropped back into the 2013 range: We’re selling fewer vehicles but we’re charging more money for each of them, and so we’re not worried.

There are two factors at play in these rising average transaction prices.

Americans shift to “trucks” & love paying extra

This shift by US consumers away from lower priced and lower margin cars to higher priced and higher margin “trucks,” meaning compact SUVs (crossovers, which are based on cars), pickups, and SUVs, is not new. This trend has been going on for years. But it has reached a critical mass to where automakers are now shutting down car production plants in the US, to focus on making what sells.

And American consumers, often assumed to be astute and price sensitive, are favoring and buying the vehicles with the fattest profit margins: full-size pickups, which include the top three US bestsellers in 2018 with combined sales of over 2 million:

  • #1 bestseller: Ford F-series, 909,300 trucks sold
  • #2 bestseller: Chevy Silverado, 585,600 trucks sold
  • #3 bestseller: Dodge Ram, 537,000 trucks sold.

The next three bestsellers are compact SUVs (“crossovers”):

  • #4 bestseller: Toyota Rav4 (427,200);
  • #5 bestseller: Nissan Rogue/Rogue Sport (412,100);
  • #6 bestseller: Honda CR-V (397,000).

You have to go down to seventh place to get a car, the Toyota Camry (343,400), followed by the Honda Civic (325,800); and by the Toyota Corolla (303,732). Note that Ford sold three times as many F-series pickups as Toyota sold Corollas.

The chart below shows how the dynamics between cars and “trucks” (crossovers, pickups, SUVs, and vans) have developed over the years – and Americans are just willing to pay a whole lot more for “trucks” than for cars, and hence higher average transaction prices.

Price increases in the hottest segments

Manufacturers raise prices on trucks because they can. The average transaction price has risen because automakers have raised prices within the hottest segments that already have the fattest profit margins, particularly full-size pickup trucks.

The average transaction price for full-size pickup trucks jumped 5.3% in January from a year earlier, to $49,562, according to Kelley Blue Book. This is over three times the average transaction price of a subcompact car ($16,273). And it matters, given the large number of trucks sold.

Even the average transaction price of compact crossovers — which are based on compact cars in terms of the chassis, powertrain, and many other components and don’t cost a lot more to manufacture than their equivalent cars – rose to $29,039.

High performance cars, such as Porsches, experienced 5.5% increase in the average transaction price ($113,800), but sales are tiny, compared to the overall market, and they really don’t matter that much.

Below is the list by segment of average transaction prices in January, and their changes from a year earlier. There are also four price decreases on that list, including two luxury car segments: high-end luxury car (-3.8%) and luxury car (-0.9%) (data via Kelley Blue Book):

Segment Jan. 2019: Avg. Transaction Price % change YOY
Subcompact Car $16,273 0.3%
Compact Car $20,504 1.0%
Subcompact SUV/Crossover $23,969 -1.3%
Mid-size Car $25,951 0.3%
Hybrid/Alternative Energy Car $27,653 2.7%
Compact SUV/Crossover $29,039 2.1%
Van $32,939 0.0%
Mid-size Pickup Truck $33,287 0.6%
Sports Car $34,996 -1.7%
Full-size Car $35,327 2.4%
Minivan $35,549 3.4%
Mid-size SUV/Crossover $38,926 1.1%
Entry-level Luxury Car $42,419 0.5%
Luxury Compact SUV/Crossover $44,979 0.0%
Full-size Pickup Truck $49,562 5.3%
Luxury Mid-size SUV/Crossover $56,892 0.2%
Luxury Car $58,470 -0.9%
Electric Vehicle $62,402 2.5%
Full-size SUV/Crossover $63,466 3.0%
Luxury Full-size SUV/Crossover $87,933 4.8%
High-end Luxury Car $96,423 -3.8%
High Performance Car $113,801 5.5%

For automakers, the conundrum is this: Compact and subcompact cars have paper-thin profit margins, and so they’re not pushing them very hard. The money is in trucks. And that’s where much of the marketing dollars go. But compact and subcompact cars are out there, and if Americans really wanted to buy small economical cars and save a ton of money on purchasing costs, interest, and fuel, they could. But not many do.

This conundrum can be further complicated by fuel prices, which can wreak havoc on production planning by automakers. In the past, surging gasoline prices have caused consumer preferences to shift to more economical vehicles. But when gasoline prices fell again, those preferences shifted back to trucks with a vengeance.

At the same time, even as the average transaction price has surged year after year, total new-vehicle sales have declined in what is a brutally mature market, with new-vehicle sales in 2018 just below where they’d been in 2000. This makes for 18 years of stagnation with a huge trough in the middle during the Financial Crisis. But price increases and the shift to more expensive higher-profit margin vehicles has kept the dollars rolling for automakers.

Somewhere there is a cause-and-effect relationship between declining unit sales and higher prices, but it is not clear where this relationship is because Americans most eagerly buy the highest-profit margin vehicles (pickups) while at the same time spurning subcompacts that sell for a third of the price.

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  91 comments for “New Trucks are Hot, Prices Surge. But Cars Face Carmageddon. And Total Sales Fall

  1. Begbie
    Feb 5, 2019 at 1:50 pm

    Big people-Big vehicles-Big payments

    • Harrold
      Feb 5, 2019 at 2:25 pm

      96 month loans.

      • Trinacria
        Feb 5, 2019 at 9:32 pm

        many won’t go the full term of the loan – 8 years now for some, just crazy! After 3 to 5 years, many folks get the new car itch. And, even though many of these may be upside down in the car, they go ahead and buy anyway, rolling the negative equity or “air debt” into the new loan with ever increasing payments till Kingdom come! What a way to live! I certainly, could not sleep at night.

        • Dave
          Feb 7, 2019 at 5:36 am

          Just don’t get it. I drive a 2006 with 150,000 miles. Do most of the work myself when it does need repair/maintenance. I would like a new(er) ride but when I look at the prices I get extreme sticker shock. How the hell do people afford these notes?! And I make a good yearly salary.

    • Keith
      Feb 5, 2019 at 3:51 pm

      Add in the aging of the population. Older people can get in and out of trucks and crossovers much easier than sedans, which sit lower and make people crouch to get into. I suspect this dynamic is more important yet little reflected upon. I never did until my own family got old and I was in the fiduciary line of work for a while.

      • Paulo
        Feb 5, 2019 at 6:53 pm

        I am going to disagree with keith’s statement on ease of access/egress. We have a truck and an F-150 in the family. We also drive a Toyota Yaris, 2 door hatchback. It is a sub-compact and is an absolute snap to get into the front seats. On Thursday we pick up our 88 year old Father-in-Law who sports two artificial hips and has a heart condition. He slides right into the front pax seat of the Yaris no problem. Of course he is of normal weight and about 5’10” now that he has shrunk. I am 6′ and usually drive. Parking in those lots with the small spaces is a snapola.

        I have no idea why regular folks buy trucks…dumb and dumber,for sure.

        As for buying a newish truck, it is looming for us because we actually live rural and use our truck for its intention, hauling stuff, winching logs, etc. Yesterday I blew a brake line in town, did an emergency repair to limp home and will redo rear brakes next week. It is certainly cheaper than buying a new truck. One day it will be grounded and I’ll part it out or give it away. Apparently, ’86 Toyotas are sought after by hormonal males. :-) Hopefully there will be good used trucks on the market when people can no longer stomach the payments. If the right one comes along we’ll pay cash for it.

        • polecat
          Feb 5, 2019 at 8:29 pm

          Regular folk ?? … could you elaborate ? I live in town, a small one, and use my truck for hauling things when the need arises. Now, if you’re referring to urban/suburban howboys/testosterone truckies, then I would be in agreement. Their whole schtick is the Look, the Bernaysian Induced Persona … But there ARE those of us who Don’t live in the sticks that have need of a truck where other vehicles can’t cut the mustard !

        • Feb 6, 2019 at 10:46 am

          The Urban Assault Vehicle came about in part due to crumbling infrastructure, potholes that would swallow a subcompact. Secondly is the ability to inflict greater harm in the event of an accident, which increasingly have no legal resolution. Hit and run? Drive away. Losers get buried. The UAV functions best on the Costco run. The psuedo-prepper likes to load up. Fear and Loathing on the turnpike.

        • Nick
          Feb 7, 2019 at 12:03 am

          Agree

      • Jack
        Feb 5, 2019 at 8:16 pm

        100% correct. Most of my friends who have driven cars all their lives have traded them in for CR-Vs, RAV4s, Foresters, Rogues for that exact reason + try being behind a large SUV when on any road. I am 76 traded my tiny Audi for an easier to get into and exit Q3, the smallest SUV. Love it.

        • Javert Chip
          Feb 5, 2019 at 11:35 pm

          I’m 72, drive a BMW M550 (4-dr sedan), and spend very little time behind large SUVs…

      • Bobber
        Feb 5, 2019 at 9:02 pm

        I agree. Once you hit 50 the legs aren’t as strong and the gut limits your movement. I have a sedan and a SUV, and I always think getting in and out of the sedan is a pain. I think the gas mileage is a bigger issue though, so I use the sedan for longer trips. In 5 years, when the legs are weaker, the sedan will definitely be less attractive.

        The retirees in my neighborhood love the Subaru Outback because it’s sedan-like but is somewhat elevated.

        • California Bob
          Feb 6, 2019 at 1:09 am

          “Once you hit 50 the legs aren’t as strong and the gut limits your movement.”

          Doesn’t have to be that way (I’m 65).

      • Tom Jones
        Feb 7, 2019 at 12:52 pm

        Reading the article, age also crossed my mind as a factor. I had to buy an SUV as it was the only vehicle my aged-back could tolerate for any distance; or even to sit in at all, in the case of some of the smaller cars. When young, I loved small cars. Now old; hello gas-guzzler. Compsendate by planing efficient trips to get many things done in one trip around town.

        • Keith
          Feb 7, 2019 at 2:22 pm

          I was grateful to my former Xterra when I suffered a backinjury, myself. My work vehicle was a Chevy Malibu which was painful and dreadful to get in and out of.

    • Clete
      Feb 5, 2019 at 6:48 pm

      Begbie and Keith, I think you’re both right.

      As we all get bigger (I’m freakishly tall and bigger around than I should be and simply can’t fit in many cars), the vehicles have to grow as well. And my wife recently had abdominal surgery and finds getting into the Murano much easier than getting into other, lower cars.

    • Argus
      Feb 6, 2019 at 2:10 pm

      As the Latin saying goes, “Currus magnus, mentula miniscula” (big car, small d**k)

      • Keith
        Feb 7, 2019 at 2:25 pm

        LOL, right. Larger vehcile have their perks, just as smaller ones do. It comes down to preference and functionality. I think for most people, all things being equal, they prefer the larger vehicle. As cars get smaller due to CAFE dictates, I suspect more and more will continue to go to larger vehicles, in this case trucks.

        Not everyone aspires to cruise around in a Smart car or Mini-Cooper.

    • Old guy
      Feb 12, 2019 at 7:51 am

      I am on my 4th Hyundai and i love it, i also own a pickup truck, gas milage is awesome in the Sonata but not so good in the truck. I am almost 60 and no problems getting in either one, might be different for couch potatoes or obese people. I prefer to purchase 1-2 years old hyundais and trucks but just bought new because price and warranty was so good.

  2. SocalJim
    Feb 5, 2019 at 1:58 pm

    The job market is hot. Because of that, automobiles and houses will catch a bid. CNBC just ran an article indicating the housing market is snapping back with a vengeance. For a little while, media reports of a housing market crash did suppress the market, but no more. Congrats on those home buyers who snapped up a bargain several months ago. I was telling everyone that the house market crash was not possible with a strong job market.

    • Begbie
      Feb 5, 2019 at 2:32 pm

      The real estate market is collapsing, regardless of what the REIC tells us

      • SocalJim
        Feb 5, 2019 at 3:10 pm

        REIC is Canadian. I have no idea what is going on up there. When I said housing, I should have said US housing. As far as non-US housing, I have no opinion. I should have indicated my bullish opinion only applies to US housing. Sorry for the confusion.

        • Begbie
          Feb 6, 2019 at 8:57 am

          “Real Estate Industrial Complex”

        • NoEasyDay
          Feb 7, 2019 at 11:41 am

          @SocalJim-

          > I should have indicated my bullish opinion only
          >applies to US housing.

          You are proselytizing real estate mortgages, a serious financial obligation for most families.

      • Rowen
        Feb 5, 2019 at 3:26 pm

        I think January’s data will surprise on the upside because lower mortgage rates and aggressive price cutting were successful in getting buyers off the fence.

        The issue is whether these buyers got a bargain, or just caught a falling knife. All I know is that overall, the demographics for residential real estate appreciation doesn’t look favorable.

    • Prairies
      Feb 5, 2019 at 2:33 pm

      This gave me a good chuckle. Should buy into Bitcoin while you’re at it.

      • KFritz
        Feb 5, 2019 at 8:25 pm

        Brevity is the soul of wit!

        • GuiriCateto
          Feb 5, 2019 at 8:54 pm

          A short seller eh?

      • Javert Chip
        Feb 5, 2019 at 11:45 pm

        Speaking of bitcoin:

        I liked the story about the bitcoin exchange dude (…grand wizard; whatever they call him) who died, taking passwords to $199,000,000 of bitcoins with him.

        So much (yet again) for the infinitely perfect block chain protecting everybody’s investment.

        • polecat
          Feb 5, 2019 at 11:52 pm

          “Annnnnnnd it’s gone. …. All Gone !

    • LessonIsNeverTry
      Feb 5, 2019 at 2:59 pm

      Nice try. Getting obvious now :)

    • California Bob
      Feb 5, 2019 at 3:19 pm

      As we speak, CNBC is slobbering over the Lamborghini Urus CUV for over $200K.

      The auto websites are pointing out, repeatedly, that modern C/SUVs get better gas mileage than older large sedans.

      • Wisdom Seeker
        Feb 5, 2019 at 4:13 pm

        But not pointing out that modern large sedans get 40-50 mpg with decent hybrid powertrains?

        • Bill from Australia
          Feb 5, 2019 at 11:48 pm

          Petrol(gas) is much cheaper than depreciation on a new Truck,car ,over the life of the vehicle ,plus add interest costs on the loan buying new is a no win proposition , how is your job security looking in 3,4,5 years time? Paid for it in cash did we ??? one advantage with the big truck when you loose the house you can sleep in the bed (sar) .

        • California Bob
          Feb 6, 2019 at 1:19 am

          “But not pointing out that modern large sedans get 40-50 mpg with decent hybrid powertrains?”

          Name one (and provide data). Quick search:

          https://www.car.com/buying-guides/best-hybrid-sedans-10036/

          Best I saw was a Ford Fusion at 42MPH highway, and it’s considered a mid-size, not a large sedan (and these are EPA ratings; good luck trying to get that in real-world conditions).

      • Gunther
        Feb 6, 2019 at 10:43 am

        Better mpg values are available, but not sold in the us.
        Modern small turbocharged gas engines can get something like 50 mpg, diesel even more.
        But the engines are just big enough, not supersized.
        For example a 1 liter three cylinder turbocharged engine with 95 hp drives a vw golf to a top speed of some 125 mph with about 50 mpg on us highway speed.

    • Abomb
      Feb 5, 2019 at 4:40 pm

      Also from the the same CNBC article:

      “Add that to lower rates, and suddenly agents are scrambling to list more homes, even before the spring market officially begins.”

      This market is insane. Glad my savings for a down payment have essentially been obliterated by investors and flippers.

      This economy is so debt driven. Some day the charade will have to stop.

      Serenity now!

      • RangerOne
        Feb 5, 2019 at 7:35 pm

        I don’t know if it has to change but I would like to see it change. A US with less speculation on homes seems like it would be better.

    • Bobber
      Feb 5, 2019 at 9:04 pm

      Do you have any data to support that assertion? All I hear is that the RE market drop is picking up steam.

  3. Lion
    Feb 5, 2019 at 2:28 pm

    As long as easy money and credit are flowing, big ticket items will sell.

  4. Feb 5, 2019 at 3:07 pm

    So can you get a sub compact on a 99$ a month lease? Is this a great country or what?

  5. Rowen
    Feb 5, 2019 at 3:07 pm

    All of 3 my siblings had cars as teenagers 20 years ago. Now, I’ve got about 15 cousins between 16-24. Only 3 have cars.

    Twenty years ago, I kinda had to have transportation to have a social life. Heck, it was nothing to drive 10 miles to the Blockbuster to rent a $3 movie. Now, my cousins live stream their friends, watch netflix, and uber eats, all from their smartphones.

    • Begbie
      Feb 5, 2019 at 3:35 pm

      Millennial’s don’t seem concerned about owning the latest car or the biggest house. My 20 somethings have seen far more of the world then I ever will

    • Keith
      Feb 5, 2019 at 3:55 pm

      Cost of ownership is a lot more. In the good old days, a couple of hundred bucks could get you a beater that you and your buds could fix up. A part time high school job was enough to cover insurance, gas and taking the little late out on Friday night. Cars today are a lot more expensive, part time gigs are now careers for many and cars are too computerized for the shade tree mechanic.

  6. Sadie
    Feb 5, 2019 at 3:18 pm

    Wolf, I priced a truck in January 2019, and the MSRP was $39365.00. The purchase price excluding sales tax was $23990.00. This included mfg employee pricing and incentives.

  7. Ptb
    Feb 5, 2019 at 3:48 pm

    I wonder how much of this is a more “effective” sales network, whether b/c of tech (your phone knows all about you, and it’s in your pocket when you walk into a dealership), or consolidation. Where I live, a college town, -All- the foreign and domestic dealerships now have the same ownership, as of last year. Results are exactly as expected. Service quality in the toilet. Prices stiffening (not that I care at the moment).

  8. Kman
    Feb 5, 2019 at 3:50 pm

    I picked up a Silverado Quad cab 4×4 last Summer. MSRP was $49.5K. I got it for $36K after incentives and dealer markdown. Was about same price as market for a 3yr old use one. I noticed that Wolf mentioned that prices were before incentives. So seems that while prices are up, so are incentives to move them. So how has the “real” price actually gone up over time?

  9. Ed Kennedy
    Feb 5, 2019 at 4:02 pm

    Ford pickup trucks may not quite as popular as the chart makes it seem. The Ford “F” series includes their commercial box trucks and chassis in addition to the pickup trucks purchased by individuals.
    I don’t know if the number in the article is just the pickup trucks, or all trucks in the “F” series.

    • Feb 5, 2019 at 4:57 pm

      Includes up to a 1-ton. Medium duty, such as typical box trucks you mentioned, are not included. All this data here are for “light” cars and trucks. Medium and heavy trucks are reported separately.

      • Sadie
        Feb 5, 2019 at 5:53 pm

        Wolf, Ram recorded an increase in truck sales For January, which included a substantial increase to fleet sales. These “fleet sales” are usually to a large corporation i.e., construction, railroad etc. They are usually the medium duty versions which command a higher price.

        • Feb 5, 2019 at 8:50 pm

          Sadie,

          “Fleet sales” in these reports are “light vehicles” only — cars, pickups, vans, and SUVs sold mostly to rental car companies (they buy over 2 million vehicles a year), but also corporations, and various governments. As I said, medium and heavy duty sales are not included in these numbers.

        • Sadie
          Feb 6, 2019 at 9:17 pm

          Wolf, correction I should have said up to 1ton.

        • Rowen
          Feb 7, 2019 at 7:13 pm

          Substitution effect?

          Aren’t Ram trucks considered an inferior product to Chevy/Fords? Now that I think about it, I don’t every recall seeing a national company use Ram as its fleet truck. Usually, it’s the smaller contractors.

  10. Wisdom Seeker
    Feb 5, 2019 at 4:11 pm

    Do the vehicle price changes show up in CPI inflation, or are they adjusted away via substitution logic (irrespective of actual sales!) or hedonics?

    @SocalJim – I think he meant “REIC” as in “Real-Estate Investment Complex”, an industrial self-interest / propaganda machine similar to the Military-Industrial Complex or the Health-Care-Complex or the Higher Education Complex.

    @Keith – I agree with you, older folks with frail bodies prefer vehicles that they can get into and out of without risking personal injury. But that would also rule out the big pickups that one has to climb up to get into.

    One thing I suspect as well – the vehicles listed are popular types for hands-on workers (pickups) and for service businesses (crossover SUVs). Be interesting to know what fraction of vehicles are being registered to individuals vs. small businesses. Looking reasonably prosperous is a requirement for many lines of work, and tax write offs take some of the sting out of the payments.

    There’s also the line of thinking that if you can’t afford a decent house, at least you can have a good vehicle!

    • Feb 5, 2019 at 5:10 pm

      Wisdom Seeker,

      “Do the vehicle price changes show up in CPI inflation, or are they adjusted away via substitution logic (irrespective of actual sales!) or hedonics?”

      Yes, they’re mostly adjusted away.

      According to CPI, there has been -0.3% year-over-year DEFLATION in new vehicles. According to CPI, new vehicle prices have experienced 0% inflation since 1997:

      • Setarcos
        Feb 5, 2019 at 5:45 pm

        Would be interesing to see the trends on costs to maintain all the new electronics, bells and whistles, etc. The diesel emissions system on my 2013 car just failed at a cost of $3,700. A phone call and a letter resulted in getting it down to $2,800, but there was still quite a nice margin in that repair.

        • Feb 5, 2019 at 8:44 pm

          My guess is about 60% margin on labor and 35% on parts.

          But that would be the gross margin. There are a lot of expenses involved in a shop like this, including admin personnel, training, and high-tech diagnostic equipment. But still, for dealers the “back end” can be the most profitable part of the business.

        • safe as milk
          Feb 6, 2019 at 3:48 pm

          this is why there is a growing number of people who prefer older simpler cars. a lot of new cars have 8 – 10 gears or a cvt automatic possibly with awd. that’s ok for the first owner but when those transmissions start to act up on the second owner, it is way too expensive to fix them.

  11. Shizz
    Feb 5, 2019 at 4:52 pm

    I will NEVER pay over $15k for a truck. I currently own a 2006 Ranger FX4 (daily driver) and a 97 Ram 3500. Paid $6500 cash for the ram and have slowly been refurbishing it. Had the rear end gone through, and have the interior back to near New condition (did all that work myself).

    I currently have about $9000 in it with 230k on the Cummins 12 valve. The 5 speed was rebuild with a new clutch about 75k ago (owner had reciepts in the glove compartment).

    The thing will pull anything I hook to it including my 38ft camper like a champ. I love that truck! Could use a paint job but it is a paid for, solid work horse.

    Beats the $75k they are asking for a new diesel 3500.

  12. Feb 5, 2019 at 5:31 pm

    Most Americans buy used vehicles.
    High income people will pay up a bit to get what they want.
    What we’re seeing here is mainly a shift in the subset of people who buy vehicles … the luxury end is strong and the economy end is vanishing, so total sales decline while average price goes up.

    • IdahoPotato
      Feb 5, 2019 at 5:42 pm

      My neighbor had her roof replaced recently. For a week I had a cavalcade of shiny trucks in front of my house. That roofing crew did cough up a lot for their commutes.

      Don’t know if they were new or used, but those were darn expensive vehicles with lots of bells and whistles.

      • Paulo
        Feb 5, 2019 at 7:22 pm

        IdahoPotato,

        A flooring installer moved in down the road from me. He drives an almost new F-150 crew cab for everyday use, and uses a fairly new big Ford van for his work vehicle. (He also has a tricked out $50,000 Harley in his house).

        He hasn’t worked for 6 weeks. hmmmmm.

        When I started out building houses with my brother we each drove little 4 banger Ford Couriers (Mazda 2 w d). Being carpenters we built our own canopies and had roof racks. All materials are usually delivered, anyway. Sometimes we needed to pick up nails or haul air tools, but a station wagon would have worked just as well. I grew up across the street from a contractor. He used a station wagon.

        If I was still building I think I would use a van, or even a mini van with the rear seats removed. Welders and HD Mechanics/Techs need big service vehicles, most other trades can use just about anything. It’s way cheaper to pay cartage, and if the order is big enough they often price it in as a service if the jobsite is local. It’s nice to keep toos and materials dry and you can’t do that with a truck. If your truck has the big $2,000 canopy, (which is a pain in the ass) you might as well use a mini van with a side door.

        • bungee
          Feb 6, 2019 at 12:08 am

          Everything changed when Chevrolet stopped making the Astro van (or GM safari). Small time workers have had to find a new work van. Ford came out with the transit but it was a 4 cylinder originally and couldn’t cut it. Like a go-cart. The best I found was by Dodge Ram called the “cv tradesman”. It’s basically a grand caravan with the seats gutted and the windows panelled out. It was great but they quit making it to push their stupid ProMaster. My point is “Mini-van with seats removed” is definitely still the way to go you are spot on. I liked the cv tradesman so much that now when I expand the fleet I just gut out a grand caravan. Aaaand it has dual sliding doors which is very helpful. Here it’s not just necessary to keep stuff dry but also from getting robbed. The windows gotta be blacked out too cuz in San Francisco they smash and grab your tools all day long (knock on wood)

        • Keith
          Feb 7, 2019 at 2:35 pm

          I have noticed that for contractors coming to the old homestead, those high top vans are very popular. I think for dedicated work, they may be best. Personally, I like them. On the other hand, having a bed in a pick up truck is very useful to dealing with junk, misc, hauling, etc. It is a good jack of all trades, master of none. For instance, when cutting down trees and transporting dirt and such around the yard and vineyard, I prefer to have that in the bed of a truck rather than inside. That being said, I keep my tools and such in the backseat, to protect them from the elements.

      • Sporkfed
        Feb 5, 2019 at 7:27 pm

        Businesses get tax breaks for new vehicles.
        From construction to lawn care, the business owners
        seem to get a new truck every 3-4 years.

        • IdahoPotato
          Feb 5, 2019 at 8:25 pm

          That crew had one – maybe two – owners and maybe four employees. All had snazzy vehicles.

        • shizz
          Feb 5, 2019 at 8:31 pm

          Better than going to share buy backs…

  13. Bobber
    Feb 5, 2019 at 9:12 pm

    It’s interesting that transactions are dropping but unit price is increasing. But maybe this is just the result of the wealth concentration. The middle class isn’t buying new because they have no money, and that’s why transactions are dropping. The 10% that own stocks are doing really really well, and they are spending their winnings on pricey new vehicles.

    This also explains why high end sports cars are doing well.

  14. Tyronius
    Feb 5, 2019 at 9:53 pm

    I see income inequality here; those few weeks can buy can buy whatever they want, they aren’t price sensitive.

    Then there’s a large and increasing number who can’t afford any new car, period.

    This begs a question; Wolf, do you have any numbers on vehicle sales per capital over time? Cuz I bet that number has been growing for awhile and it’s getting pretty extreme.

    • Feb 5, 2019 at 10:40 pm

      Yes, good question.

      NEW vehicle sales in relationship to the population — note this is not ownership but sales.

      In 2000, there were about 17.4 million new vehicles sold. In 2018, 17.3 million. In 2000, there were 282 million people in the US. In 2018, 326 million. So in 2000, for every 16 people, there was one sale. In 2018, there was one sale for every 19 people. In other words, sales per capita have been dropping. And one of the reasons is this:

      In 2000, the average age of vehicles on the road was 8.9 years. In 2017 (latest data I have), it was 11.7 years. These vehicles are lasting longer and people are driving them longer, and the used car market is huge (40 million vehicles a year sold) and vibrant.

      https://wolfstreet.com/2018/08/21/average-age-of-cars-trucks-vehicles-by-household-income-vehicle-type/

      • polecat
        Feb 6, 2019 at 12:02 am

        Guess it’s time for ‘nother round of Cash-for-Clunkers, eh ?
        Gotta get those plebs to buy somemoarrr new, high-priced vehicles … with money they don’t have.

  15. WES
    Feb 5, 2019 at 10:17 pm

    One item not mentioned in comments. Usually when drivers switch from a car’s low road view to a higher road view with a SUV or truck they do not want to go back to the car’s low road view. Safety is part of the reason.

    • Ididsa
      Feb 5, 2019 at 11:54 pm

      @WES

      Very good reasoning. I fall into this bucket. I won’t be going back to sedans, coupes or even sports cars. I love my Jeep Wrangler. The safety and height are very addictive…..

      • safe as milk
        Feb 6, 2019 at 4:20 pm

        it’s safer in an accident but you ability to avoid an accident has been compromised by the higher center of gravity and curb weight.

        • BrianC
          Feb 6, 2019 at 4:54 pm

          Bingo!

          Depends on the accident. Head on they do ok, and I think rollovers are more likely.

          My experience with trucks and full size SUVs is that they really aren’t very comfortable to drive for a long distance. Also trucks, unless you put several hundred pounds of sand in the back, suck for winter driving.

          Best cars, that *I* am familiar with, for winter driving: 1978 Diesel Rabbit, 1985 Chevy S-10 Blazer (two door), 1998 Volvo XC-70 wagon.

        • safe as milk
          Feb 8, 2019 at 9:49 am

          @BrianC i had 2002 volvo xc70 with nokian tires. best winter car i’ve ever driven.

    • james wordsworth
      Feb 6, 2019 at 6:45 am

      Been a few studies out showing that SUV’s are far more dangerous to pedestrians – hit them at a higher point on the body causing worse injuries.

      Me – I hate SUVs. Plus they suck for the environment …

      Get the price of gas where it needs to be $8/gallon (to cover the real damage caused to the planet) an we would see more reasonable vehicle selections.

      • Jack's SUV
        Feb 6, 2019 at 12:19 pm

        I was waiting for this statement… move away from all the evil SUVs then. I hear the Congo is pleasant.

      • baldski
        Feb 7, 2019 at 3:48 pm

        Your comment is the first I see here to mention the environment. It makes no enviromental sense to me, for a 150 lb. man to need a 5000 lb. vehicle to haul his ass around town.

  16. Jack
    Feb 5, 2019 at 10:56 pm

    Just curious question, what’s the average mileage the average punter does in the US?

    • BrianC
      Feb 5, 2019 at 11:14 pm

      From the US Dept of Transportation:

      https://www.fhwa.dot.gov/ohim/onh00/bar8.htm

      Which is interesting to me. I think our mileage last year was about 5500 miles (8850 km) between 3 drivers. (We have one 21 year old Chevy Cheyenne K2500 pickup.) Probably ~500 miles of that was driving to various sheep shearing jobs in spring, early summer. We also did one camping trip through Central Oregon.

      On the other hand I probably put ~10000 kilometers commuting back and forth from work on my bicycles. Some days I put ~70 km on the bike between commuting and errands, but usually it’s under 15km.

      —-

      Of the six grown up sons and daughters of my business partners, half of them do not own cars. (Ages range from 28 to 40.) This is Portland, Or metro area.

      • Jack
        Feb 6, 2019 at 2:31 am

        BrianC

        Thank You Brian, so the average driver in the working ages between (20-65) is doing roughly 20’000km. Per annum!

        Investing more than 10k in a motor vehicle is a total waste of money by my reckoning.

        On the other hand I applaud you and your family for being efficient in using your MV’s . lots of youngsters need to learn how to use their money better nowadays.

        Also I hope you’re quite in demand for those shearing jobs :) are they of Merino type?

        Thank you again.

        • BrianC
          Feb 6, 2019 at 11:29 am

          I wouldn’t be allowed to touch a Merino. lol How I got into shearing would make a long story best told over a beer…

          I’m pretty much a shearer of last resort for small hobby farmers in NW Oregon. Mostly I see Baby Doll Southdowns, Shetlands, Columbians, Suffolks, and Dorsets. Never know what you are going to see. My first job was a mixed flock of Suffolks and Dorsets that hadn’t been sheared for ~3 years.

          Most clients I pick up from referrals from Vets. I’ll help them with shots, and hold the animals for hoof trimming, but I’ll make the owners do the actual shots and trimming.

          It’s a nice change from hi-tech. I enjoy meeting the people and getting out and about.

          For those wondering… Here is what it looks like when pros shear:
          https://www.youtube.com/watch?v=Vnvm70s7-NY

  17. David Horowitz
    Feb 6, 2019 at 12:19 am

    I would love to see Detroit bring back full-size, rear drive, full frame sedans and station wagons, but they have long ago given up on this type of car. If they brought it back, I suspect it would make a deep cut into truck and crossover sales. The only model that comes close is the Dodge Challenger/Chrysler 300 but who knows how much longer they will be in production.

  18. SocalJim
    Feb 6, 2019 at 8:01 am

    I have owned homes in multi-million dollar areas for most of my life. I have seen a shift in what wealthy people are driving. Many must drive a new 911, Model S or Range Rover. However, I, as an increasing number of others, are driving modest sedans like a Camry or Accord. I have four vehicles, all modest. The reason? Because I feel I am less of a target for criminal activity. Longevity is everything and why risk of being a criminal target … survival of the fittest means driving a modest vehicle.

    • Marc D.
      Feb 6, 2019 at 9:33 am

      Socaljim, interesting you mention the high crime rates out there. I work in D.C. A coworker of mine was born and raised in Los Angeles. He says he’s really glad he doesn’t live there anymore. He complained about the high crime rates. He even moved his mother here, to Bethesda, MD, to get her away from there. It sounds like burglaries and things like that are a big issue out there.

      • SocalJim
        Feb 6, 2019 at 10:35 am

        @Marc D. … your friend is right.

      • safe as milk
        Feb 6, 2019 at 4:28 pm

        interesting. nyc is still cery safe but the homeless population is exploding.

    • safe as milk
      Feb 6, 2019 at 4:26 pm

      i have a good froend who is a “trustafarian.” of course he drives a prius. but to your point, his father who amassed the fortune drove oldsmobiles and then toyota avalons. my middle class parents: volvos.

  19. NotMe
    Feb 6, 2019 at 10:09 pm

    There is only one reason that truck sales are going up and car sales are going down: EPA CAFE regulations.

    Cars and Trucks/Crossovers are two separate categories. Only foreign carmakers can by EPA regulation keep selling more cars. To sell a car you need an offset in gas mileage. Trucks because they are for work and industry require little or no offset. Thus because foreign car makers only sold small cars they accumulated large offsets and are making bigger and bigger cars to expend their offset.

    Unless all EPA CAFE regulations are cast out, there is no future for cars from US manufacturers.

  20. mushroom
    Feb 13, 2019 at 2:29 pm

    I Wonder how much private use Truck gasoline is paid for with “business” credit cards?

    Big racket?

Comments are closed.