OT--Why Are Used Late Model Used Pickups so Expensive?
Close
Login to Your Account
Page 1 of 4 123 ... LastLast
Results 1 to 20 of 70
  1. #1
    Join Date
    Jan 2011
    Location
    Kansas
    Posts
    618
    Post Thanks / Like
    Likes (Given)
    26
    Likes (Received)
    46

    Default OT--Why Are Used Late Model Used Pickups so Expensive?

    I've been looking at 3/4 ton gas trucks. I don't put on lots of miles. So I've been looking for something 3-5 years old with 80,000-120,000 miles. To me they seem very expensive, they are up into the mid to upper twenties. What is the deal? You can buy a new one in the mid thirties. Where is the sweet spot for buying a used truck?

  2. #2
    Join Date
    Apr 2004
    Location
    Milwaukee,WI
    Posts
    594
    Post Thanks / Like
    Likes (Given)
    325
    Likes (Received)
    380

    Default

    Buy a new one. With low miles you can sell it in 3 years for top dollar. With the warranty you wont be spending any money on repairs.

  3. Likes dslynn65 liked this post
  4. #3
    Join Date
    Jul 2009
    Location
    Peoria, IL
    Posts
    10,383
    Post Thanks / Like
    Likes (Given)
    31
    Likes (Received)
    7714

    Default

    I wonder if it has to do with the current lending practices. Typica auto loans are now 100 months, over 8 years. So, it's possible that after 3-5 years, you still owe $25k on a $35K purchase even with $5k down.

    Assuming the average car on the road in the US is 7 years old, most people never pay off their car...

  5. Likes wheelieking71 liked this post
  6. #4
    Join Date
    Oct 2012
    Country
    UNITED STATES
    State/Province
    Virginia
    Posts
    8,318
    Post Thanks / Like
    Likes (Given)
    4392
    Likes (Received)
    3738

    Default

    Quote Originally Posted by munruh View Post
    Where is the sweet spot for buying a used truck?
    Not 3 to 5 yrs. Buy at six to fifteen years old, keep for ten-plus, rather. "I don't put on lots of miles...." fits a great many vehicles, and can eat your lunch all your life if you let it.

    THEN seek "relatively" low mileage as-in some suburbanite's 2d or 3d vehicle, AND NOT a "work truck", frequent tow vehicle, or daily driver for someone who commuted to work every day.

    Look for reliable. EXPECT some ugly. It's a pickup truck. "Hollywood" is a different set of wheels, entirely.

  7. Likes munruh, Joe Miranda liked this post
  8. #5
    Join Date
    Jan 2011
    Location
    Kansas
    Posts
    618
    Post Thanks / Like
    Likes (Given)
    26
    Likes (Received)
    46

    Default

    I think your right. I do take the occasional customer out for lunch so don't want too ugly of a truck. It's a difficult market.

  9. #6
    Join Date
    Aug 2002
    Location
    West Unity, Ohio
    Posts
    22,407
    Post Thanks / Like
    Likes (Given)
    3034
    Likes (Received)
    5983

    Default

    Quote Originally Posted by munruh View Post
    I think your right. I do take the occasional customer out for lunch so don't want too ugly of a truck. It's a difficult market.

    LOL!

    Boy, been there, done that! LOL!


    Several years ago we had a machine setting in a riggers facility in Kansas City. We decided that we were going to not take delivery on the whole unit, and would just go out and cannibalize it, and scrap the rest.

    Well, they wouldn't let us in to work on the weekends, and if we took a cpl of days in the middle of the week, plus a day out and day back, that really ends up being the whole work week out of the shop, and even when slow - I don't like that.

    So I asked if we could get in over Christmas break. OK, that was doo-able.
    Since we were going that far - we loaded up sleds and hit Colorado for a cpl of days as well.

    So, after a full week or more of traveling all over Gods white Earth, sledding, and cannibalizing, we headed down to Oklahoma City to check in face to face with a customer down there.

    After we got the nickle tour and all, he wanted to go to dinner (lunch?) at a local steak house. OK, sure.... "We'll follow you over."

    No, he wanted to ride with us. We are in a 1 ton truck, not a 'Burban, and I told him that we have been living out of this truck for a week. "That's OK."

    Ohhhh kay ...


    So when we git to the truck he sees what I was saying. We have clothes for sledding, clothes for working in a cold warehouse, and some spares for just in case.... The truck is FULL!

    So we piled everything loose in the front seat and tried to find a spot in the back seat for it, and we all piled into the front and drove to get something to eat.

    He was fine with it, but was a bit for us.


    ------------------

    Think Snow Eh!
    Ox

  10. Likes Bobw, Garwood, wheelieking71 liked this post
  11. #7
    Join Date
    Apr 2013
    Country
    UNITED STATES
    State/Province
    New York
    Posts
    648
    Post Thanks / Like
    Likes (Given)
    556
    Likes (Received)
    532

    Default

    Quote Originally Posted by munruh View Post
    I've been looking at 3/4 ton trucks. I don't put on lots of miles. So I've been looking for something 3-5 years old with 80,000-120,000 miles. To me they seem very expensive, they are up into the mid to upper twenties. What is the deal? You can buy a new one in the mid thirties. Where is the sweet spot for buying a used truck?
    Once upon a time I was a salesman at a GM dealership, so I might have a little more insight than most on how new car and truck sales work.

    One very important thing to keep in mind when it comes to new car and truck sales is the financing aspect. Most people (almost no one) don't pay cash for vehicles anymore. For that matter, most people don't actually know how much they paid for their new car or truck - they only know how much their monthly payment is.

    Another important thing to understand is how the dealer incentives work. Many dealerships who sell new vehicles actually lose money (or only make a very small amount) on the actual new car and truck sales. They do this for a couple of reasons, mainly because the manufacturers force them to take a certain number of certain vehicles to allow them to continue to be a GM (or whoever) dealership, and most dealerships are paying interest on every vehicle they have on the lot from the moment they take delivery on it. So they get stuck with a $50,000 truck they may not want, but don't have a choice in the matter. And because anyone on the internet can take the VIN of that vehicle and find out the "invoice pricing" (and that's if the dealership doesn't just hand you their invoice on it) there really isn't a lot of room to negotiate on those prices anyway. And even if a dealership wanted to fight for "sticker price" the buyer would just go to the next town with the same dealership and buy it there.

    So there is no margin, and not a lot of motivation for dealers to try to get ‘top dollar’ for new vehicles, and a lot of incentive for them to get rid of them as quickly as possible.

    In addition to that, many manufacturers further motivate dealers by offering them ‘coupons’ or ‘dealer rebates’ on certain vehicles or types of vehicles (luxury models that aren’t selling, or anything the manufacturers just have too much inventory of.) Many dealerships will actually use those for customers, in part or in full, just to get rid of a new vehicle that’s costing them money to have on the lot every month. Chevy’s “famous” ‘Truck Month’ comes to mind, which is essentially Chevy trying to clear the lots of last year’s models as quickly as possible, before they start rolling out the coming year’s trucks, which tanks the value of the previous year’s. I saw new trucks going out the door at about 65% of sticker price at times. Granted, it was a rough time for the business and GM.

    So why do dealerships put up with this?

    Being an official Chevy dealership means a lot more service business, and generally a lot more parts sales business. Volume bonuses are also a big deal, so there really is some truth to buying a new car at the end of a month.

    There is also some money to be made on the financing side, as well as the add-ins (Z-Bart coating, wheel packages, alarms, whatever) but no one’s getting rich on this.

    One thing to note: you generally can’t combine incentives as a buyer, meaning if you take the 0% financing option, you’re paying full-price for the car or truck. Still might be a better deal if you take 0% over 5 or 6 years and plan to keep it that long, which is what a lot of people do….and then they wind up trading it in in 3-4 years, taking a huge hit in value where the dealership can make some money.

    Additionally, being the official Chevy dealer means being able to sell “Certified Used” vehicles, which are a big money maker. Used cars and trucks in general are where new car dealerships make their money. And being an official Chevy dealer means you get first crack at the lease auctions, and anything being sold off by GM Financial (because every major car manufacturer has a finance division.) So you’re getting the best used vehicles for your lot. You also get more and better quality trade-ins, which are always better than anything you have to go out and buy at auction.

    On an average new vehicle sale the dealership probably loses money at the end of the day. On an average used car or truck sale, the goal is typically to make at least $2,000-$3,000 on something in the $15,000-$25,000 range. As much as $3,000-$4,000 isn’t uncommon, and I personally sold vehicles more than once where the dealership made over $5,000 on the sale.

    On the financing side a lot of the manufacturers are actually using their financing companies to shift financial losses. I.e. Chevy decides to boost sales by allowing people with bad credit to buy new cars via GM Financial. They do this knowing that a good portion of those people will default on the loans, and they’ll take the cars back. This isn’t malicious, it’s just stupid, or short-sighted. But at the end of the day, GM “makes” money on sales and GM Financial loses it – just over the course of years instead of a quarter. This is a lot easier for shareholders and corporate types to take, especially considering those losses can be offset by future ‘good’ sales and business practices.

    For the record, business practices like this were a big part of why GM had to get “bailed out” by the government. Pretty similar to what happened in housing actually – they knew all along what they were doing was stupid, but the government told them to do it anyway and they’d cover them when the crash came.

    As to why Used Trucks cost so much: supply and demand. And there is a ton of demand for used trucks, because the new ones are seen as so expensive (right or wrong.) There is also a ton of markup in used trucks, because by and large, dealerships have a hard time keeping them on the lot. Especially when the body style of the used truck is the same as the body style of the current year’s. If you think the people who buy Mercedes and BMW to be ‘flashy’ or ‘trendy’ are bad, you haven’t seen most of the people buying new trucks. They’re more a status symbol or fashion accessory than anything (but don’t tell the ‘Truck Guys’ that.) My old Sunfire (sub-compact chick coupe) did more hauling and towing than just about any daily-driver truck I’ve ever seen. My current work ‘truck’ is an old honda minivan I paid $1700 for 2 years ago and haven’t put a dime into. It can hold 4’ x 8’ sheets in the back with the tailgate closed, and it keeps them dry in the rain. I can’t remember the last time I saw a truck with a bed big enough to do that. And I didn’t have to buy an expensive truck box or cap to keep people from stealing my tools out of it.

    If you can do some math, and if you actually plan on keeping the truck for a while, buying brand new with 0% financing is often the best way to go, and it eliminates “buying someone else’s problems” as we used to say. My brother just went through this exercise after shopping for years for a replacement for his full-size with 300,000 miles on the clock – he finally gave up on finding a good deal on used, and just bought new. It might wind up costing him $1000 more, but he got a brand new truck with a better warranty, rather than a 3-4 year old one with 40k-50k on it. It seems wasteful, but it can really be the way to go.
    Last edited by Johnny SolidWorks; 11-15-2017 at 09:12 AM.

  12. #8
    Join Date
    Apr 2013
    Country
    UNITED STATES
    State/Province
    New York
    Posts
    648
    Post Thanks / Like
    Likes (Given)
    556
    Likes (Received)
    532

    Default

    Quote Originally Posted by munruh View Post
    I think your right. I do take the occasional customer out for lunch so don't want too ugly of a truck. It's a difficult market.
    Do what I do when I need a 'nice' car for a customer thing: rent one for a day. Seriously. It'll be like $75 bucks, it'll be pristine and nice, and you won't have to try to justify a $50,000 truck purchase to your wife for the 5 or 6 times a year you take a customer out.

  13. #9
    Join Date
    Jan 2010
    Location
    Gilroy CA
    Posts
    4,112
    Post Thanks / Like
    Likes (Given)
    2849
    Likes (Received)
    2137

    Default

    What new 1/2 gas pick up can you buy in the mid 30s?
    I guess a single cab long bed work truck with 2 wheel drive maybe? And manual crank windows?

  14. Likes digger doug, AARONT liked this post
  15. #10
    Join Date
    Jan 2011
    Location
    Kansas
    Posts
    618
    Post Thanks / Like
    Likes (Given)
    26
    Likes (Received)
    46

    Default

    Quote Originally Posted by dstryr View Post
    What new 1/2 gas pick up can you buy in the mid 30s?
    I guess a single cab long bed work truck with 2 wheel drive maybe? And manual crank windows?
    The Ram dealers have their Tradesman series for this price now. 4x4, crew cab, power windows and locks, integrated brake controller, backup camera and so on..............

  16. #11
    Join Date
    Jan 2010
    Location
    Gilroy CA
    Posts
    4,112
    Post Thanks / Like
    Likes (Given)
    2849
    Likes (Received)
    2137

    Default

    My younger brother just bought a new f150 FX4 package with aftermarket leather for $55k OTD after taxes / bullshit.
    Pick up market is insane now.

    I bought one of the last 2012 dodge slt 2500 in 2013 and paid $40k OTD. KBB shows its worth 30k now in 2017 with 50k miles on it.

  17. #12
    Join Date
    Jan 2005
    Country
    CANADA
    State/Province
    Saskatchewan
    Posts
    9,095
    Post Thanks / Like
    Likes (Given)
    1015
    Likes (Received)
    2888

    Default

    I lucked out on my last truck, F150, buying it privately from an estate. It was past warranty period with only 12k km on it! Paid $24000 for it, which I figured as something like 33% off of new. I can bear my own warranty.

    It's a luxury ride, AFAIC, and is comparable to any car out there for comfort and handling...plus real 4wd when required. Just think of those old time emperors sitting in their sudan chairs with a passel of hungry mouths to feed, and enduring the hot sun.....they'd have killed entire cities to get this ride

  18. Likes tdmidget liked this post
  19. #13
    Join Date
    Apr 2013
    Country
    UNITED STATES
    State/Province
    New York
    Posts
    648
    Post Thanks / Like
    Likes (Given)
    556
    Likes (Received)
    532

    Default

    Quote Originally Posted by dstryr View Post
    What new 1/2 gas pick up can you buy in the mid 30s?
    I guess a single cab long bed work truck with 2 wheel drive maybe? And manual crank windows?
    Not that I'm a huge fan of GM, but their current year 1/2 ton, regular cab, long box, 2WD Work Truck package has a sticker in the mid 27s.

    Which seems utterly ridiculous to me, but I tend to buy vehicles for what the average American's car payment is.

  20. Likes Bobw, tdmidget, Garwood, wheelieking71 liked this post
  21. #14
    Join Date
    Aug 2010
    Location
    Minnesota
    Posts
    1,335
    Post Thanks / Like
    Likes (Given)
    127
    Likes (Received)
    1005

    Default

    Quote Originally Posted by munruh View Post
    I think your right. I do take the occasional customer out for lunch so don't want too ugly of a truck. It's a difficult market.
    A family friend in the demo business almost lost a job over his truck... quoted the job out and the guy giving the approval said he didn't trust them because they showed up in a POS truck. Guy went out over lunch and bought a brand spanking new F350 dually diesel and came back and landed the job. H

  22. Likes Ox liked this post
  23. #15
    Join Date
    Aug 2002
    Location
    West Unity, Ohio
    Posts
    22,407
    Post Thanks / Like
    Likes (Given)
    3034
    Likes (Received)
    5983

    Default

    Quote Originally Posted by kustomizingkid View Post
    A family friend in the demo business almost lost a job over his truck... quoted the job out and the guy giving the approval said he didn't trust them because they showed up in a POS truck. Guy went out over lunch and bought a brand spanking new F350 dually diesel and came back and landed the job. H

    A half ton is a different deal IMO, but I have 1 ton truck(s) with a flatbed. I feel like the status symbol is not attached to these quite so much. A "heavy" truck that is not all new and shows a bit of life about it in places does not seem to me to scream "loser" like it would on my 'Burban.

    But then - I had to upgrade a cpl yrs ago as my truck was getting past that point, and looking like that POS truck that you just mentioned. There is a difference between "not new" and "unreliable". Not that my old truck is really unreliable, but it leaves a bit of oxided iron samples here and there when you slam a door somewhere.

    It makes a good plow truck for the next few years.
    And has been my spare that I used for the last month+ while my "good" truck was all apart for HVAC doors. I tore it apart, and then got busy. Just got back together yesterday.


    ---------------------

    Think Snow Eh!
    Ox

  24. #16
    Join Date
    Aug 2010
    Location
    Minnesota
    Posts
    1,335
    Post Thanks / Like
    Likes (Given)
    127
    Likes (Received)
    1005

    Default

    His old F350 looks like it was used in a demo derby... he is a demo guy so...

  25. Likes Ox liked this post
  26. #17
    Join Date
    Aug 2005
    Location
    Toronto
    Posts
    4,740
    Post Thanks / Like
    Likes (Given)
    2520
    Likes (Received)
    2740

    Default

    Quote Originally Posted by kustomizingkid View Post
    A family friend in the demo business almost lost a job over his truck... quoted the job out and the guy giving the approval said he didn't trust them because they showed up in a POS truck. Guy went out over lunch and bought a brand spanking new F350 dually diesel and came back and landed the job. H
    i'm the opposite. Show up in a truck like that and feel like I better go get more quotes. I tell our welding consumable supplier, your truck looks better than our truck, I want a price reduction....and I usually get something. I was involved in a business once, proprietary electronics. they were making so much money, but of course were smart enough not to show it. The policy was if you drove a nice car you had have a beater as well to drive when customers were coming in (all customers were a plane ride away, there were no drop ins)

  27. Likes digger doug, larstonx, Garwood, neilho liked this post
  28. #18
    Join Date
    Jul 2009
    Location
    Peoria, IL
    Posts
    10,383
    Post Thanks / Like
    Likes (Given)
    31
    Likes (Received)
    7714

    Default

    Quote Originally Posted by Mcgyver View Post
    i'm the opposite.
    Yep. I see building contractors running around in brand new diesel trucks with 8" lift, $5,000 in rims and tires, and a 12" drop hitch to pull their little enclosed trailer (can't haul anything in the 6' bed, even if they wanted to).

    If a guy showed up to work on my house with that rig I'd tell him to climb back into his truck and go.

  29. #19
    Join Date
    May 2002
    Location
    South Central PA
    Posts
    12,286
    Post Thanks / Like
    Likes (Given)
    1433
    Likes (Received)
    2515

    Default

    Quote Originally Posted by ewlsey View Post
    Yep. I see building contractors running around in brand new diesel trucks with 8" lift, $5,000 in rims and tires, and a 12" drop hitch to pull their little enclosed trailer (can't haul anything in the 6' bed, even if they wanted to).

    If a guy showed up to work on my house with that rig I'd tell him to climb back into his truck and go.
    +1. I've done business with those guys, and have real judgements about doing it ever again.

    On the other hand, the demo guys all drive junk, that's just how they operate. Even the wealthy ones it seems.

  30. #20
    Join Date
    Oct 2012
    Country
    UNITED STATES
    State/Province
    Virginia
    Posts
    8,318
    Post Thanks / Like
    Likes (Given)
    4392
    Likes (Received)
    3738

    Default

    Quote Originally Posted by munruh View Post
    I think your right. I do take the occasional customer out for lunch so don't want too ugly of a truck. It's a difficult market.
    I think of Kansas as having space enough that Joe Average can have more than one vehicle.

    In the "1/2 ton" (3/4 Ton, actually) range, I use a $3450 used Chrysler Town & Country with a 4' X 8' sheet of 3/4" ACX exterior, tie-downs, front bulkhead, and a hand-cranked strap winch 'tween the front seats, add a 1200 lb-rated folding aluminium ramp as needed.

    One month a year, the plywood comes out, the "stow & go" seats pop up, debris is removed with a bit of vacuuming - or a coupla hand-grenades, depending, and the Wife and extended family have a 7 seater.

    My "other truck" is a $10,600 acquisition cost used 2005 Jaguar 4DR "long-wheelbase" - XJ8L.

    Works for me.

    I quit driving "new" with the 1984 Wagoneer, rent wotever those don't cover, short-term.

    Fairfax, then Loudoun County Virginia have too high a tax on "Personal Property" - read vehicles, mostly - for me to EVER AGAIN run anything less than five to fifteen years old.

    More folk should sit down and calculate the WHOLE cost of vehicles - taxes, maintenance, insurance, interest on loans, as well as tires, fuel, parking, purchase price and depreciation - against their GENUINE need and use.

    Some have that genuine need - "business" or work basis .. Others, not so much.

  31. Likes Johnny SolidWorks liked this post

Tags for this Thread

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •