Truck Prices as a Financial Discussion

[Blue Goose]

...I believe it was either an SD or Raptor thread where he posted a pic of his 68 and HE said it was top of the line.

It was the top of the line.....the Ranger trim level package! That's the point! What WAS, isn't anymore. My top of the line '68 Ranger didn't come standard with power anything or air, hell, I had to pay extra for the tinted glass all of the way around. An XL today comes standard with ps, pb, and I don't know if you can buy one without air. I'll bet the seat in an XL is on par with my upgraded seat that came with the Ranger pkg. (a selling feature I might add since the base trim level seat was one step above a church pew)

I also think allowances need to be made for gov mandated items.....the car companies can't be blamed for gouging because of them. Like I said in a previous post, catalytic converters are so valuable that thieves are taking chances of getting caught sawing them off of cars in hotel parking lots. Same thing goes for airbags. Cars are being stolen just so the thieves can strip the airbags and sell them on the black market. Those two items alone add substantial cost over both my '68 truck and your Dad's.

The point about the amount I paid or for that matter, what your Dad paid for the black truck, wasn't window sticker. That price would have been higher. Yet you compare the paid price against window sticker prices of today.

 

[mrxlh]

Brad, you bring up a good point. Sticker is not what anyone pays for a vehicle unless its in very high demand. (GT500 ect ect)

Erine, what was the base number off sticker when you were selling?

(The standard for R.V.'s is deduct 20% from the sticker and the dealing starts there)

I would presume it would be x plan or something of that nature. For the sake of conversation though a percentage would be better used in this sense so we could see the actuall deduction of say 50,000 minus 10% would be 40,000.

 

[LEB Ben]

The point about the amount I paid or for that matter, what your Dad paid for the black truck, wasn't window sticker. That price would have been higher. Yet you compare the paid price against window sticker prices of today.

Actually, sticker on my dad's truck was 31k, so he got 10% off. Even if I was 100% off with your truck Brad, FACT of the matter is, in 15 years a top of the line truck went from 30k to 65k. No way in hell can I believe inflation nor 'what you're getting' makes up $35,000. I can believe, the extra cost is greed, I can believe supply and demand, I can believe a new demographic, I can believe Lester's point about offsetting warranties...but I just don't think it's justifiable saying the truck is worth 35k more, regardless of how weak the dollar is. It's not like these technologies and government mandates are necessarily scrapped and reworked for every single vehicle, you design for one and you have a reasonable template for the other vehicles you produce...or maybe the exact same parts can be used. I don't see any other vehicle segment prices growing as rapidly as the truck market...those same technologies and government regs that are now mandated, I don't see those causing every other vehicle on the lot jumping 35k over the last 15 years, sure they're going up...but nowhere near that much.

 

[taxreliever]

Actually, sticker on my dad's truck was 31k, so he got 10% off. Even if I was 100% off with your truck Brad, FACT of the matter is, in 15 years a top of the line truck went from 30k to 65k. No way in hell can I believe inflation nor 'what you're getting' makes up $35,000. I can believe, the extra cost is greed, I can believe supply and demand, I can believe a new demographic, I can believe Lester's point about offsetting warranties...but I just don't think it's justifiable saying the truck is worth 35k more, regardless of how weak the dollar is. It's not like these technologies and government mandates are necessarily scrapped and reworked for every single vehicle, you design for one and you have a reasonable template for the other vehicles you produce...or maybe the exact same parts can be used. I don't see any other vehicle segment prices growing as rapidly as the truck market...those same technologies and government regs that are now mandated, I don't see those causing every other vehicle on the lot jumping 35k over the last 15 years, sure they're going up...but nowhere near that much.

 

[Blue Goose]

Actually, sticker on my dad's truck was 31k, so he got 10% off. Even if I was 100% off with your truck Brad, FACT of the matter is, in 15 years a top of the line truck went from 30k to 65k. No way in hell can I believe inflation nor 'what you're getting' makes up $35,000. I can believe, the extra cost is greed, I can believe supply and demand, I can believe a new demographic, I can believe Lester's point about offsetting warranties...but I just don't think it's justifiable saying the truck is worth 35k more, regardless of how weak the dollar is. It's not like these technologies and government mandates are necessarily scrapped and reworked for every single vehicle, you design for one and you have a reasonable template for the other vehicles you produce...or maybe the exact same parts can be used. I don't see any other vehicle segment prices growing as rapidly as the truck market...those same technologies and government regs that are now mandated, I don't see those causing every other vehicle on the lot jumping 35k over the last 15 years, sure they're going up...but nowhere near that much.

OK, let's take that 65k truck.....against your Dad's.....That 65k truck will be a diesel, is your Dad's a diesel?.....automatic? That 65k truck will have navigation and sync, does your Dad's? That 65k truck will have climate control, heated and cooled seating, does your Dad's? That 65k truck will have a moon roof, does your Dad's? That's just for starters. You also have a degree in finance, I'm just a ditch digger but 10% off of 65k is a hell of a lot more that 10% off of 30k..... While your discussion has merit, your emotions are skewing the facts.

 

[LEB Ben]

I hear ya loud and clear Brad...I just don't consider that to be 35k worth of stuff. And from a manufacturing standpoint...typically, the more you make, the more the price goes down...not up. If these technologies can be applied to other lines of vehicles, why are their costs not increasing just as quickly? I realize that's not applicable in all cases, but I just don't see the other segments' prices growing as fast...all the while they are being advanced technologically, and they have government mandates to conform to as well.

 

[Blue Goose]

Well, that 65k diesel truck just had to meet tier 4 emissions standards that required Ford to start with a clean sheet of paper engine design adding urea injection if they planned on staying in the diesel market. This is the first year for that engine. These same standards caused a company as strong in diesel engineering as Cat to throw in the towel on truck engines.

Oh, and lets not forget the lawyers!!!! Product liability....HUGE!!!!

 

[taxreliever]

Well, that 65k diesel truck just had to meet tier 4 emissions standards that required Ford to start with a clean sheet of paper engine design adding urea injection if they planned on staying in the diesel market. This is the first year for that engine. These same standards caused a company as strong in diesel engineering as Cat to throw in the towel on truck engines.

Oh, and lets not forget the lawyers!!!! Product liability....HUGE!!!!

Product liability and lawyers go into other vehicles as well....you don't need to be a math major to know that. My wife designed the computer chips that went into vehicles and knows a little about production costs from a tech standpoint today vs the trucks Ben's dad was driving.....the question still stands....design cost made the increase to $35k? That's not adding up.

 

[Blue Goose]

Attributing all of the price differences of my 'top of the line' '68 F100 and Ben's Dad's truck to today's 65k truck to greed and inflation is the equivalent to comparing the airplane that the Wright Bros. flew at Kitty Hawk to an F18 or to put it into the same time frame, the Mercury Space capsule that took Alan Shepard into space and the space shuttle. They both do the same job, the latter is much more high tech and better. Are the costs difference ALL attributable to greed and inflation, I think not.

 

[CaFordDude]

I'm just a ditch digger

That statement right there made me laugh.

I think your point is VERY valid Brad. What was considered top of the line 30 years ago hell even 15 years ago is nowhere even close to what is considered top of the line now.

Crew cab? is top of the line now but was it even offered back then? I seem to remember hearing that Chris' truck is called a Centurion because that is the company that made it a crew cab from it's original design. How much was that option when his truck was bought?

Could you even get a diesel in a "passenger" truck back then because it is now a $7000 option.

My point is that if you want to compare a top of the line truck nowadays to Brad's top of the line truck (as an example) you better compare the exact same features that were considered top of the line back then. And only then could you get a true feel for the price increases in trucks.

It is completely unfair, unreasonable and unrealistic though to compare a 2011 King Ranch Crew Cab 4x4 diesel with a 1968 F100 Ranger.

 

[LEB Ben]

Well, that 65k diesel truck just had to meet tier 4 emissions standards that required Ford to start with a clean sheet of paper engine design adding urea injection if they planned on staying in the diesel market. This is the first year for that engine. These same standards caused a company as strong in diesel engineering as Cat to throw in the towel on truck engines.

Oh, and lets not forget the lawyers!!!! Product liability....HUGE!!!!

There were 60k trucks last year too...what was that excuse? And those other costs should be spread across the cost of all vehicles.

Product liability and lawyers go into other vehicles as well....you don't need to be a math major to know that. My wife designed the computer chips that went into vehicles and knows a little about production costs from a tech standpoint today vs the trucks Ben's dad was driving.....the question still stands....design cost made the increase to $35k? That's not adding up.

Agreed...using my business degrees that Brad pointed out that I had, and using my manufacturing background...I see at best a 50/50 split of engineering costs to profit.

Attributing all of the price differences of my 'top of the line' '68 F100 and Ben's Dad's truck to today's 65k truck to greed and inflation is the equivalent to comparing the airplane that the Wright Bros. flew at Kitty Hawk to an F18 or to put it into the same time frame, the Mercury Space capsule that took Alan Shepard into space and the space shuttle. They both do the same job, the latter is much more high tech and better. Is the costs difference ALL attributable to greed and inflation, I think not.

Even if we're not comparing apples to apples, do you not agree that there will have to be a collapse at some time considering truck prices are growing faster than the median income? That's more or less the point I've been trying to get to this entire thread.

 

[taxreliever]

Attributing all of the price differences of my 'top of the line' '68 F100 and Ben's Dad's truck to today's 65k truck to greed and inflation is the equivalent to comparing the airplane that the Wright Bros. flew at Kitty Hawk to an F18 or to put it into the same time frame, the Mercury Space capsule that took Alan Shepard into space and the space shuttle. They both do the same job, the latter is much more high tech and better. Is the costs difference ALL attributable to greed and inflation, I think not.

If all the fighter jets increased in price the same as the F18, then I would agree with you....Ben's point is, using your Wright Brother's example, that only the F18's got jacked up in price and all the other fighter jets stayed low in comparison. Not ALL the price difference is to greed and inflation, just the difference in what the normal price increase has been for other trucks and cars and the top of the line $65k one.

 

[O'Rattlecan]

I mean just the basis of comparison is a flaw in the model.

"Top of the Line" may as well say "reasonable" in a legal contract. You can mean it whatever you want it to mean.

Just because more is available doesn't mean that's a valid metric. You need to compare apples to apples. For instance a standard cab 8 foot bed truck with a bench seat. I guess you'll have to throw in air conditioning because it wasn't offered then. You'd have to give it the stardard V-8 (or premium V8 if that's what Brad's had). Throw in 4x4 if it was equipped on the old truck. You can't throw in sync and heated leather seats with electric controls. You can't throw in brake control packages. You can't throw in navigation. You have to include airbags even though they didn't exist.

Apples to apples buddy. Not "top of the line" to "top of the line". Phoney benchmark.

Ryan

 

[O'Rattlecan]

On second thought, just for you I'm going to do the best apples to apples comparison this afternoon while factoring inflation. I'll use a pretty chart in excel and everything.

Ryan

 

[Blue Goose]

If all the fighter jets increased in price the same as the F18, then I would agree with you....Ben's point is, using your Wright Brother's example, that only the F18's got jacked up in price and all the other fighter jets stayed low in comparison. Not ALL the price difference is to greed and inflation, just the difference in what the normal price increase has been for other trucks and cars and the top of the line $65k one.

But this discussion didn't do a year by year truck price comparison but since you interjected that, I think I can (without any intimate knowledge) safely say that the cost of the first F18 that rolled out of the McDonnell-Douglass facilities was significantly lower than the last one that rolled out of what today is Boeing if for no other reason than avionics advancements and weapons delivery systems differences. That doesn't even touch advancements in performance. Again, same designation (F18), same mission (kill people and break things), just higher tech and better overall. Do you see the parallel here? Just because the truck is an F (fill in the blank), doesn't mean it's been static in it's design, technology, or capability.

 

[taxreliever]

I mean just the basis of comparison is a flaw in the model.

"Top of the Line" may as well say "reasonable" in a legal contract. You can mean it whatever you want it to mean.

Just because more is available doesn't mean that's a valid metric. You need to compare apples to apples. For instance a standard cab 8 foot bed truck with a bench seat. I guess you'll have to throw in air conditioning because it wasn't offered then. You'd have to give it the stardard V-8 (or premium V8 if that's what Brad's had). Throw in 4x4 if it was equipped on the old truck. You can't throw in sync and heated leather seats with electric controls. You can't throw in brake control packages. You can't throw in navigation. You have to include airbags even though they didn't exist.

Apples to apples buddy. Not "top of the line" to "top of the line". Phoney benchmark.

Ryan

Trivia question: do you know who invented auto air conditioning and when? From memory, I'm guessing the early 60's and it filled an entire trunk and was a $3k option back then......Chrysler?

 

[taxreliever]

On second thought, just for you I'm going to do the best apples to apples comparison this afternoon while factoring inflation. I'll use a pretty chart in excel and everything.

Ryan

That'd be cool.

 

[taxreliever]

But this discussion didn't do a year by year truck price comparison but since you interjected that, I think I can (without any intimate knowledge) safely say that the cost of the first F18 that rolled out of the McDonnell-Douglass facilities was significantly lower than the last one that rolled out of what today is Boeing if for no other reason than avionics advancements and weapons delivery systems differences. That doesn't even touch advancements in performance. Again, same designation (F18), same mission (kill people and break things), just higher tech and better overall. Do you see the parallel here? Just because the truck is an F (fill in the blank), doesn't mean it's been static in it's design, technology, or capability.

I see the parallel....I thought one of the comparisons was normal cars and some trucks increased at a certain rate and a certain truck today (top of the line was used and I understand and agree with the whole tech issue) increased at a significantly higher rate.....my understanding is (and I believe Ben's as well) that the large difference isn't all in the tech advances, so the additional price increases go to profit margins and/or greed. So in the F18 exampled you had some other planes rolling off today with the new F18 that is significantly lower and it has similar tech advances and legal costs, etc.

 

[Blue Goose]

....so the additional price increases go to profit margins and/or greed.

If that's so, how come the car companies (Ford a couple years earlier) are in financial ruin?

 

[polarbear]

I will also add this. Simple supply and demand. If Nissan, Toyota, Mazada, all started cutting into the market and offered a 3/4 ton diesel and 1 ton dually diesel, you would see some pant chitting by the big 3. I fully believe you will see a Toyota diesel on the market within 3 years. Look at what they would have had to do to compete with the big 3. Start a diesel from scratch make it meet tier 2 or 3 epa regs, rush it to market have a ton of warranty claims, then spend gobs of cash building a whole new motor to meet tier 4 and rush it to market. Oh wait the big 3 already did that. When the smoke settles and the dust clears, and a final emission mandate (not changing every 2-3 years) comes out, you'll see Toyota enter the market. Weather the others will or not remains to be seen. The competition will be fierce for sure, and I would bet the prices will drop accordingly.

Quite the opposite, actually. Nissan, Honda, and most recently Toyota got their heads handed to them in their foray's into the full-size pickup/SUV markets. Stands to reason- back in the 70's and 80's there were millions of unhappy customer's looking for a better passenger car alternative, and they filled the market gap. It was a no-brainer. Different story in the truck market for, I suspect, two reasons.

1. Pickup buyers buy domestic brands. It's as much a statement "not an import" as it is brand loyalty.

2. Pickup owners are the most brand loyal on the planet. historically, the Ford F-Series has the highest customer retention in the industry. As long as the domestics don't give their customers a reason to jump ship, like they did in the 70's and 80's, this isn't likely to change anytime soon.

The SUV story is just as compelling- with GM holding steady at about 65% market share in the full-size and luxury SUV segments, I think the story here is a superior product that's recognized as such.

Bottom line: Nissan is still debating whether to even introduce the next generation Titan (It was going to be a Dodge, but that deal fell through with the BK), Toyota has gone on record as stating the Tundra either starts showing Toyota black ink (instead of red) or it's gone. Assume the SUV's that share those platforms will share the same fate.