Are U.S. Truck Prices Artificially Inflated?

August 6th, 2013

2013 Chevy Silverado

The Detroit News yesterday morning said,

Some industry experts believe American consumers are paying thousands extra for pickup trucks because of a lack of true market competition.

Well that’s disheartening, isn’t it?

How many years have faithful buyers of F-150s, Silverados and Ram pickups been paying more than they should for their American workhorses? What about faithful repeat buyers, who religiously remain loyal to a brand and buy new on a regular basis? Those guys have, theoretically, paid tens of thousands of dollars more than necessary for their made-in-America trucks.

It is interesting that the only full-size pickups sold here are the trucks made here.

Now think about the market for sedans and SUVs in this country. There are makes and models from Asia, Europe and North America in every corner of this great country. But even the pickups from foreign automakers, the Toyota Tundra and Nissan Titan, are built in the United States.

Why is that?

You can thank a tariff from 1963 that subjects imported trucks to a massive 25 percent tax.

Since foreign carmakers can’t import a vehicle without paying the tax, the only trucks sold here are made here.

The Detroit News story continues,

By tamping down foreign truckmakers, the tariff has led indirectly to higher truck prices, which have inflated at more than twice the rate of all new vehicle prices in the past nine years.

What’s to keep prices in check when competition is eliminated?

In what could be good news for consumers, that 50-year-old tariff could go away. The U.S. government is in the process of negotiating with Japan, which is a market that has historically been difficult, or impossible, for U.S. automakers to enter. If Japan removes its restrictions and allows access, the U.S. will remove the truck tariff.

In all honesty, it’s all just political mumbo jumbo to me. I don’t think Toyota or Nissan would pull production of trucks from the U.S. if the tariff was removed, nor do I believe other automakers would enter the market here anytime soon.

If you really want to save money on a truck, pay no attention to the tariff and just search the used listings for one of the many thousands of trucks looking for new homes.

Do you think there should be more competition in the U.S. full-size truck market?

-tgriffith

Find Used Cars in Your Area at CarGurus

Used Ford F-150
Used Chevrolet Silverado
Used Ram 1500
Used Toyota Tundra
Used Nissan Titan

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  1. Randy
    | #1

    I’ve been wanting to replace my trailblazer with a pickup so I can still pull my cargo trailer and get a 5th wheel travel trailer, but I’m so turned off by the outrageous prices that I’m not in the market. Nothing exotic- a small V8, trailer towing package, 4WD the the prices start to near 40K, absolutely absurd. Used prices are in most ways even worse, with high mileage units going for asking prices of 85% of new. No way, Jose.

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