Skyrocketing Truck Prices Mean Record Long-Term Loans

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Ford Truck Prices

America’s insatiable appetite for fancy trim levels has driven truck prices up. Insanely long loans are a direct result, but at what cost?

If there’s one thing that devoted Ford Truck Enthusiasts fans gripe about the most, it’s easily the topic of ever-rising truck prices. And you all have a legitimate point. Sure, one could argue that today’s trucks provide excellent value given their content. But there is a big problem when you can’t find trucks sitting on dealer lots with sticker prices below $35,000. That problem is, of course, the fact that most people can’t afford monthly payments of $500 or more. So to combat that, lenders are stretching loans out to record lengths, according to Bloomberg.

It wasn’t too long ago that the maximum length of any auto loan was 60 months. Which, of course, is just fine when you’re talking about a vehicle that costs less than $35k. But when prices start rising into the $50,000-$80,000 range, monthly payments begin to exceed the limits of most people’s disposable income. And yet, consumer’s insatiable thirst for luxury-trimmed pickups has led them down a dark path: long-term loans stretching all the way to 84 months!

Ford Truck Prices

“I don’t think we’re going to see any reduction in terms until we see changes in pricing or what consumers are buying,” Melinda Zabritski, a senior director at Experian, tells Bloomberg. “If anything, we’re starting to see more lenders who would previously do a 72- or 75- move into the 84-month loan category.”

If you know anything about personal finance, this is not a good thing for consumers. For starters, interest rates are on the rise after years of cheap loans following the housing crisis. Longer loans carry higher interest rates as well. Which means consumers are paying a much higher price over the course of the loan. And despite the fact that trucks carry excellent resale values, many long-term loan consumers risk going upside down. In other words, owing more on their trucks that what they’re worth.

Ford Truck Prices

These are many of the same characteristics that led to the housing crisis in the first place. We Americans tend to live beyond our means, and don’t rationalize things like what loans will ultimately cost us. Our desire for fancy things like big houses and leather-lined pickups drive us to make bad financial decisions. And lenders are more than happy to help us. Because they stand to make a lot of money off those bad decisions.


‘I don’t think we’re going to see any reduction in [lending] terms until we see changes in pricing or what consumers are buying.’


If there’s any silver lining in this story for Ford fans, it’s that we seem to be a little smarter than the rest. In fact, Bloomberg specifically notes that the Ram has the longest average loan terms in the industry – a whopping 73 months. Jeep, Fiat, Mitsubishi, and Chevrolet round out the top five. So clearly, Ford truck owners aren’t the worst offenders when it comes to the long-term loan crisis.

Ford Truck Prices

Of course, all of this is moot if you plan on keeping your truck for a long time. And can actually afford the terms and have some money set aside in the event of an emergency. But until we Americans lose our raging appetite for fancy, expensive vehicles, don’t expect those record truck prices to drop anytime soon!

Join the Ford Truck Enthusiasts forums now!

Brett Foote is a longtime contributor to Internet Brands’ Auto sites, including Chevrolet Forum, Rennlist, and Ford Truck Enthusiasts, among other sites.

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