Car shoppers are paying more than ever to finance new vehicles — and pickup trucks are driving up the average cost in at least two states.
More than 1 in 4 car shoppers in Texas and Wyoming have committed to paying more than $1,000 a month, and experts say it is due to the high volume of large truck purchases in those states, according to a report by auto site Edmunds.
More than 1 in 5 shoppers in seven other states — Colorado, Kansas, Louisiana, Montana, Nebraska, North Dakota and Utah — are also forking over more than $1,000 for their vehicles each month, Edmunds found.
The average monthly auto payment reached $733, a new record, in the second quarter of the year, according to another Edmunds report.
Large trucks are the third-largest vehicle sales segment in the U.S., after compact and midsize SUVs, and account for the “heaviest finger on the scale” when it comes to the average car payment, said Joseph Yoons, a consumer insight analyst for Edmunds.
“With their sales volume, it’s the trucks that are doing the most damage in terms of pushing the prices higher,” he added.
Tight inventory and sky-high prices have kept interested truck buyers on the sidelines. But as the market cools, shoppers are coming across better deals for trucks that were once harder to come by. Buyers in Texas and Wyoming, specifically, are jumping back into the market and financing $50,000 vehicles.
Large trucks can rev up costs
Full-size pickup trucks, the segment where monthly payments can reach north of $1,000 a month for new vehicles, made up 14.5% of the total market in 2022, said auto industry analyst Paul Waatti.
“If it’s almost 15% of the market, and most are $50,000 to $60,000 as an average,” he said. “That’s going to significantly drive up the overall industry transaction price.”
Trucks have evolved from utilitarian vehicles to highly aspirational ones that consumers are willing to spend a lot of money on — and automakers are noticing, added Waatti.
A decade ago, top prices for trucks could go as high as $60,000. Nowadays, midsize trucks are soaring past that, and full-size pickups are topping out close to $100,000, he said.
“People are not using their trucks just for work anymore; they’ve become a status symbol,” Waatti said.
'Cowboys with cash' in Texas and Wyoming
Texas and Wyoming are states that have always had strong demand for pickup trucks, Waatti explained.
Pickup trucks have larger fuel tanks, allowing these vehicles to have longer ranges. Drivers in Texas and Wyoming have to navigate long, rural distances between towns or through mountains.
Additionally, pickup trucks are beneficial for the work many people do in these areas, such as farming, ranching and energy production.
Thus, owning a pickup truck can be key in regions with lots of heavy-duty, hands-on work, Waatti said.
“They also speak to that cowboy-ish buyer,” he added.
Many ranchers and people working in oil and gas in Texas, Wyoming and similar states have more cash on hand than people in other parts of the country might expect, experts say.
“It does not seem strange to me that a quarter of the population in Texas have some serious cash, [saying] ‘I couldn’t get one of these fancy trucks before, I can get them now,’” said Tom McParland, contributing writer for automotive website Jalopnik and operator of vehicle-buying service Automatch Consulting.
“You have your average folks, and you’ve got some cowboys with cash,” he added.