A key consideration when it comes to buying a vehicle is how well it will resell after you own it. With truck owners, there’s some great news in that department. Pickup trucks tend to hold their value well, but why?
There are a few key reasons why pickup trucks hold their value so well. The biggest is reliability. Trucks are among the most reliable vehicles on the road. They’re also incredibly popular, which drives up the demand and ensures you always have a market to sell your used truck in. On top of that, trucks are highly versatile and attract a range of different consumers, again boosting the popularity and resale value.
I’m going to dig deeper into this concept. I’ll explain what resale value is, why it matters, and some top reasons why pickup trucks have great resale value.
Understanding Resale Value
Some people might be scratching their heads right now. Why does resale value matter so much? It all comes down to this little thing called “depreciation”.
When you buy a car and drive it off the lot, the value of the car immediately drops. The idea behind depreciation is that vehicles only last a finite amount of time. The longer a vehicle is driven, the closer it is to the end of its life.
When people buy a car, they’ll often look at the historical and predicted depreciation values for the car. You can do a rough calculation to predict what your car will be worth in 5 years. By doing this, you’re figuring out how much it will cost you to own the vehicle for 5 years.
This idea doesn’t matter to people who lease cars or plan on driving the vehicle until the wheels come off. It only matters to people who want to sell the truck after a certain amount of time and pick up a newer, more reliable vehicle. Not to say that trucks aren’t reliable, just that a 1992 truck is less reliable than a 2021 version of the same vehicle.
You can use the resale value injunction with some other values to find out how much your vehicle costs you. If the resale value after 5 years is $25,000 less than the price you paid for it, then you effectively paid $5,000 plus any maintenance and repair costs each year to own the vehicle.
A favorable resale value makes things a little more digestible. We all know that cars aren’t investments, but that doesn’t mean they have to burn a hole in your pocket just to own one.
Another important piece of your resale value is that it positions you better for your next purchase. The more money you make out of the sale, the more you can put towards your next vehicle.
Remember, you’re going to get a check when you sell your truck. With a good resale value, you can turn around and use that money to pay off a good chunk of your next truck. The cycle continues and allows you to be financially better off.
Reasons Why Pickup Trucks Hold Their Value So Well
We already know that people are willing to pay more for used pickup trucks, but now it’s time to get into the weeds. Here are some of the top reasons why pickup trucks hold their value so well. There are other reasons on top of this, but they’re more specific to different people, so I want to keep things general.
Contractors Need Them
There’s a whole market that relies specifically on pickup trucks. Contractors from various industries will use a pickup as their work vehicle.
Without the truck, there’s no smart way to do their job. They’ll throw equipment in the bed, carry a trailer behind the truck, and load the truck with all their workers.
Whenever businesses are tied into a product, you can bet money that the product will have a better resale value. In this case, pickups are woven into countless industries. They are often relied on and needed to perform the job function.
Trucks are Safer
Pickup trucks use a completely different method for building the frame and body of the vehicle. Compact cars have both the frame and body built together, resulting in a cheaper, lighter weight, but less safe vehicle.
With trucks, they build them separately in order to maximize safety. Add in the higher ride height, better visibility, and extra weight of a truck and you’re left with a staggeringly safe vehicle.
Why am I even talking about safety? Well, safety will determine the selling price of the vehicle. Cars that are known to be unsafe will sell for a lot less since the risk is much higher.
In addition, it gives you a better chance of selling a truck that’s been in a minor accident. Fender-benders are a lot less impactful to your resale price in a truck as compared to a compact car.
There’s Always a Market for Them
If vehicles had a popularity contest, the truck would be the clear winner. There are a lot of reasons why trucks are so popular, but the proof is evident. If you look at the most-sold vehicles in 2020, numbers 1 through 3 all go to trucks.
One thing that will hurt the resale value is desperation. If you’re selling something that nobody really wants, then you’ll have to drop your price dramatically.
With pickups, it’s the opposite. Since everyone wants them and there’s always a market for them, they hold their value really well.
There’s no real off-season for a pickup owner. They could be hauling lumber for a summer project, loading up leaves during fall, carrying firewood for winter, or driving around new trees during spring. As such, you don’t have to wait for a magic month to sell your truck.
This idea revolves around supply and demand. There’s a huge demand for the truck, so the price is always favorable.
They Have Multiple Uses
As I just alluded to, trucks have a lot of different uses. From hauling a bed-full of equipment to towing a massive boat, people can definitely push the limits of their trucks.
On the opposite side, some people simply drive trucks because they like how they feel and look, and they rarely utilize the bed of the truck.
This is part of why trucks are so popular. You can buy one for a number of different reasons and use it differently each day of the year. The same is not true for SUVs or compact cars.
It also prevents you from getting stuck in the mud, which is always a nice thing. What I’m trying to say is that a truck can drive down the gravel road less traveled without any major problems.
People Even Buy “Beater Trucks”
There’s a submarket that revolves around buying really old, worn-out trucks. Their sole purpose is to be a backup vehicle for a family. It also comes in handy for the rare need to help someone move or transport heavy cargo.
This is good news for truck owners. It means that even after your truck has a lot of miles on it, there’s still a market that wants to buy it. Now you don’t have to be afraid to rack up the mileage on your truck.
Trucks are Really Reliable
In another piece, I explained how trucks are more reliable than compact cars. A pickup is sturdier, has a longer-lasting engine and transmission, and has a better frame than other vehicles on the market.
You can own your truck for upwards of 20 years without any major problems (as long as you’re keeping up with routine maintenance).
Since the mechanisms are usually simpler, it also allows you to do a lot of the repairs on your own. Since you won’t be selling a truck out of desperation, you can expect a higher payment.
They Are Rarely Leased
It’s very uncommon for a truck to be leased. When trucks are purchased instead, they hold their value a lot better.
Leased vehicles are usually treated worse than owned cars. The idea is that the lessee doesn’t have to care about what goes wrong with the car because, in the long run, it isn’t their problem. They can drive the car hard, neglect maintenance, and simply turn in the car after 2 years with no major issues.
When someone purchases a vehicle, they tend to take better care of it. Neglecting the vehicle will only hurt themselves and result in a bigger loss of money.
Fewer Owners, Higher Value
Another factor that determines the resale value is how many previous owners there were. Vehicles with a lot of previous owners will typically sell for less. It hints that there might be something wrong with the car, and that’s why people are so quick to get rid of it.
With trucks, they don’t tend to change hands as often. You’ll find a lot of trucks on the market with just one or two previous owners.
This is a good thing and helps trucks hold their value better.
There you have it, now you know exactly why pickup trucks hold their value so well. If you’re in the market for a vehicle, maybe it’s worth it to consider a pickup. For more of your truck questions answered, explore my blog. I also have a list of products that all truck owners need, so give it a look.