Your Pickup Truck Is Driving You To The Poorhouse

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Written By Colin Graves

When searching for ways to spend less money, you might want to start by taking a closer look at how much you are shelling out to get from point A to point B.

Because if you’re like most families, transportation costs are taking up a significant portion of your budget.  And while all vehicles tend to be a money pit in one form or another, some are far more expensive to own than others.

Enter the pickup truck.

Trucks dominate the vehicle landscape in many parts of North America, but the truth is that most people have NO need for one.  Furthermore, they can’t afford to drive them.

Let me be blunt.

If your brand new Dodge Ram or F-150 wasn’t purchased for the sole purpose earning you a living, buying it was not a great financial decision.

In fact, for every tradesperson or farmer who requires a truck to do their job, there are probably 10 office workers, lawyers, or government employees shuttling their families around in these oversized, gas guzzling hunks of metal.  They are everywhere!

Make no mistake.  Buying a new pickup will take a toll on your finances, which might explain why so many people seem to feel a need to justify their purchase.

Does this sound familiar?

“I needed something that would be safe for my wife and kids to drive in”, or “It was pricey, but we needed a 4X4 to pull our large camper”.

Ah, pickup trucks and campers, that combination takes wasteful spending to a whole other level.  

Hey, I think camping is an absolutely wonderful pastime for families, one that doesn’t have to kill your financial freedom, but that’s for a separate blog post.  Click here if you want to learn more about the MysteryMoney approach to camping!

For now, it’s back to beating up on pickup trucks.

First, some sales figures that illustrate the vast number of people purchasing new pickup trucks in the US.

The Ford F-150 was the #1 selling vehicle in America in 2015.  Below are the list of top sellers for January 2016:

1. Ford F150 51,540 units

2. Chevy Silverado/

    GMC Sierra 52,244 (combined nameplates)

3. Dodge Ram 29,900

4. Toyota Camry 26,800

5. Honda Civic 26,700

6. Toyota Corolla 22,300

That’s 130,000 pickup trucks in a month, from the Big Three alone!

In my somewhat strong opinion, the best way to illustrate the enormous cost of purchasing a new pickup truck is to price one out.

Let’s use a 2016 Ford F-150 for this illustration, as it has the “honor” of being the most popular truck on the road.

To price out my shiny new destroyer of financial freedom, I went to

Warning:  Beware the sarcasm forthcoming. : )

First, I chose the “Build Your Own” option.

The default MSRP on the first screen is $26,540 for the base XL.  Hey, that’s not so bad!

But the XL listed only has 2 doors and isn’t a 4X4.  I can’t tow my new massive travel trailer with that thing, let alone carry 3 kids, their bikes and a load of firewood.

So, to accommodate these bare necessities of life, I’ll select the 4X4 option with a crew cab (Super Crew).  I see a lot of those driving around. That gives me the towing power and interior space I need.

Oh, I chose the 6 1/2” foot box.  You can’t get an 8’ box with the Crew Cab option.  That’s ok though, if I ever need to carry a load of plywood or sheetrock, I can just put the tailgate down, or borrow my buddies Toyota Sienna minivan, that’ll do.

Uh oh…the price just jumped to $39,040.  That stings, but I’m sure I can arrange for some flexible payments.

Let’s see, the XL model only comes standard with AM/FM radio.  Also, no GPS?  What about Ford SYNC?  Not included.  How about heated seats, those are important where I live.  Nope.

Looks like I’ll need the next model up for those features.

Fortunately the XLT has all that stuff and more.  Perfect.  A couple of my friends at work have the XLT.   They also rave about the 3.5L Eco Boost engine, apparently it’s super fuel efficient but doesn’t sacrifice towing power.

Ok, what’s my price, wow, $42,835.00, starting to climb pretty high here!

Now to choose Equipment Packages, how about those heated seats?  Back up camera?  I need package 302A.  And…holy cow, I’m up to $46,080!!  That’s a far cry from my $26K starting point!

There’s a load of other options listed here.  Navigation is $750 extra. I’m going to have to skip that, this is getting pricey. I would like the drop-in bed liner though, gotta protect my “investment”.  That’s an extra $350, chump change.

Time to figure out the payments on this thing.

I can finance it at 0% financing for 5 years, but the payment is $800/month, and I haven’t factored in the taxes yet.

Ford is offering a $2500 rebate if I take the 84 month payment option, and it also drops my payments to $662 BEFORE tax.  That’s steep, but easier to swallow than the 5 year payment.  The interest rate is 5.9% for the seven year term though, that’s pretty high, but managing the payment that is the #1 priority for me.

OK, enough of my slightly sarcastic illustration.  You see where this is going!

Let’s factor in the taxes and summarize.

The median combined state and local taxes are approximately 6.9% in the US for 2016.  Just looking for a ballpark here, for the purpose of this illustration.  Some states taxes will be higher, some lower.

Pricing Summary 

2016 Ford F-150 XLT Super Crew 

$47,930 including options and destination charges

-2,500 (84 month financing incentive)


$45,430 Net price before taxes.

X    6.9% approximate median combined state and local sales tax.


$3134.67 Total sales taxes.

$48,564.67 Total purchase price to finance

Financed over 84 months, my monthly payment would be $707.25.  Total borrowing costs during the term, $10,844.33.

Makes that $2500 rebate seem pretty insignificant, doesn’t it.

The approximate total cost to finance this truck over 84 months? $59,409.00!!!

For my Canadian readers, that converts to over $75,000 CAD dollars at current exchange rates!  One word, INSANE!!

Ok, so in this post, I attacked the logic behind the purchase and financing of the average new 4X4 pick up truck.

I’ll save the enormous operating costs ie. fuel, replacing expensive parts such as tires, as well as crazy depreciation levels etc for another time!

Now, what if, after reading all of this, you are saying, “but I love my truck, I can’t give it up!”

The very reason you’re reading this blog is because you are wanting to experience more financial freedom!

Believe me, when someone buys a new and shiny toy of ANY kind, the point comes when the novelty wears off.

The more it weighs on your budget, the sooner that point arrives.  The good news is that there are far better options!!  You can address your transportation needs without sacrificing your happiness or your financial future!!

I will post another blog shortly that will provide some great solutions to cost efficient transportation solutions, stay tuned!

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24 thoughts on “Your Pickup Truck Is Driving You To The Poorhouse”

  1. I’m not a truck guy, so I agree with what you’ve shared in this post. However, you make a great point that this was written to an audience that favors financial freedom. What would you say to the guy who says, “yes, I have an office job and don’t need this for work, but it sure comes in handy for hauling big stuff for home improvement projects, etc.” I’ve heard defenses of being able to get a larger hot-water heater, etc. because they had a truck instead of an economy sedan. Just curious on what your reply to those guys would be.

    Also, your main objection seems to be to NEW pickups. How do you feel about buying them used for cash?

    Not trying to be a troll here, legitimately curious as to your thoughts.

    • Hi Karl, I love your comment and certainly appreciate being presented with different perspectives! You’re correct in saying that in this post, my objection is with the money spent on NEW pick up trucks.

      The problem I have is that for thousands of families, their pick up truck is little more than a family sedan. I think many people use the utility of a truck to justify buying one, but they really just want the image, the luxury. The fact that trucks are the best selling vehicles in North America is evidence of this.

      To those people, I would say it’s a huge waste of money. Buying a new vehicle of any kind is a costly venture, but a new truck is always going to be very expensive, especially when you factor in operating costs such as fuel, tires and other parts.

      As you mentioned, there are those who really want the flexibility to tow or haul stuff! In that case, I would advise them to consider alternatives to buying new, or buying a truck at all. After all, how much of a premium do they really want to pay for utility and convenience?

      To those folks, here are a few less costly options I would recommend : )

      1. Purchase a utility trailer to tow behind the family minivan or small SUV, as those vehicles are much cheaper to own and operate. My friend purchased a $700 trailer for his van, and hauls almost everything imaginable with it, brush, lumber, appliances etc. A minivan or SUV can also tow a pop up tent trailer or small ultralight travel trailer as well.
      2. Borrow a truck from a friend.
      3. Renting from time to time is reasonable.
      4. If one absolutely needs to own a truck, buy used, with cash (as you pointed out above)!

  2. We’re truck people at my house, my husband has a truck and we get a decent amount of “truck” use out of it – and we live in the suburbs. The good thing about them is that they are meant to be worked hard and so tend to last a long time. So finding a reasonably priced used one is often doable – my husband still has a 2002 ranger and hasn’t had any major problems with it. And he even used it for about a year to do part time work repoing (smaller vehicles – motorcycles, atvs, etc). But, to your point about how much truck you need, he was young when he bought it, and even though it’s been paid off for years, looking back he thinks the 4-wheel drive option was a waste of money (in his case) since he just doesn’t have much practical use for it. For him, it was just something fun to have at the time. Sighs…boys and their toys!

    • Thanks for sharing Penny! Sounds like you’ve definitely gotten lots of use out of your truck(s), which certainly makes it easier to justify. Keeping them for such a long time is key as well. Unfortunately, they’ve become nothing more than commuter cars for way too many suburbanites!

  3. Sigh. So true. I just made the decision to dump my paid off (but money pit…nevet ending expensive problems) SUV in favor of the most economical vehicle I could find that would haul my family of 6, but also reasonably haul just me around town. Wound up with a mini-van with low miles and zero extras. My conversation with my fiance went something like this:

    Him: Does it have…
    Me: Nope.
    Him: But does it have…
    Me: Nope.
    Him: But does it have…

    While part of me hates that I’ve succumbed to a minivan, the rest of me is glad I bought a sensible vehicle. I would have paid 10k more just to have a vehicle with the same space that doesn’t look like a minivan….And I would have been getting lower gas milage.

    And I agree…I camp a lot and can definitely manage just fine without a truck! Camping is an amazing, relaxing vacation and is soooo economical!

  4. Hey Michelle, thanks for sharing! If you ask me, you can never ‘succumb’ to a minivan, they are the most versatile vehicles out there, at least for larger families. I’d never let go of my Toyota Sienna, love it!

  5. This really is a good article. I have had numerous big trucks, including an F350. I did use them for work, including hauling trailers and heavy loads….sometimes. However, I have found both my Toyota regular cab 2wd, no ac pickup and my Toyota 4Runner to be the best, most functional vehicles yet. It is comical to pass a big pickup with an empty bed while hauling a cord of wood on my $1100 trailer. I know 3 people who just bought one ton dually diesel pickups for the day they may get a travel trailer. Driving those things around empty is like moving a Carton of eggs with a tractor trailer.

    • Hey Mike, thanks for reading! The trailer is a great idea. Most people, if they feel they need to have a hauling option, could get by with an older minivan or small truck, and a utility trailer. I’m a HUGE Toyota fan, btw. Great choice! : )

  6. Man, I just found this article. It explains exactly what has happen to us and currently trying to correct. Everything up for sale, trailer, truck, heck even some other stuff to put it on the negative equity of truck. Had accident at work and not being able to work overtime really open our eyes at how much we don’t make. And believe me we make good money, it just doesn’t go as far. Wife’s current car falling apart. Goal: sell trailer and trade truck back in on two economy cash cars maybe one will be mini van. I love vans. Travel in those cars across country. Pulling an rv and getting 9 miles to the gallon really blows especially in such a big state like Texas. We can can’t go anywhere to far outside of state. Fuel would kill us on top of truck payment. RV is paid off but heavy. And I knew better. I just saw the shiny toys! Sorry a little rant on my part. Nice article. Definitely going to do the small trailer idea for hauling gear.

    • Thank you so much for the great comment Chris! Trust me, I’ve been there, not with a pick up truck, but just spending way to much money on a new vehicle. So, I write out of experience. By the way, I think (used) minivans are the absolute best option for most families with children. We drive a 2005 Toyota Sienna, which runs beautifully and is incredibly versatile.

      • Wife will likely want the minivan. We had one several years ago and man was it useful. I have to drive 50 miles a day for work so may get something smaller but I love wagons. To bad that Honda a Toyota stop making them. I like to get outside and windsurf and bike when I can so I need something I can put boards and bikes on and get great mpg’s.

        • For the minivan, there’s a $$$ sweet spot, where you can buy a 7-8 year old Toyota Sienna, with about 125,000 miles, for $7-9k. They have the perfect combination of reliability, performance, and versatility, and at that age, most of the depreciation has already been realized. I’ve used this model with 2 Sienna’s now, and it’s worked perfectly.
          As for the wagon, I hear you, it’s too bad Honda and Toyota stopped making them. I guess a hatchback would be too small for windsurfing gear, heh?

  7. We are a truck family, my dad drives a 2012 Chevy 2500 extended cab 4×4 6.0 liter “work truck” interior(the cheap interior), I drive a 2011 Chevy 2500 2wd 6.0 liter “work truck” interior. But we also own and live on 280 acres of land, we haul fence posts, watermelon bins full of watermelons or cantaloupes, rolls of barbed wire, tractor tires, 5 gallon buckets of oil, plow points, scrap iron, hay, fire wood, and anything else that will fit in the bed. Not to mention pull our 32′ Big Tex dual tandem GN trailer(although it’s a load for either truck at times), 16′ cattle trailer, and welding trailer with a SA250 Lincoln Diesel welder on it.

    I too always have a good laugh when I see an urbanite driving a $70,000 Ford diesel pickup truck, knowing full well that the truck will never be used for anything more than a grocery getter, or to haul their boat to the lake, a boat that a half-ton would easily haul.
    I know good and well that 95% of the people driving these huge expensive F150s and even F350s can’t afford them, they have them financed for 7-8 years, and will be sick of them after 4 years, others will be upside down on them before it’s all over with. But it looks good parked in their driveway, that’s all that matters.

    I’ll take my paid off 2011 3/4 ton any day over one of these expensive new overpriced pickups, I LOVE not having a payment. And my truck will do anything I need it to do on the farm, and ironically, does more work in a year than 95% of these Ford F250s that only haul groceries do in their whole lives.

    • Cantaloupes and watermelon? I’m jealous! John, I love this comment. In fact, you summed up the entire point of my post in a couple of paragraphs. I feel like, if you use a truck to make a living, then it makes complete sense. But it seems like every second suburban driveway has a $50,000+ F-150 or Silverado these days. It just doesn’t make sense to me. Thanks for reading.

  8. Greetings from England whre pick-ups are a fashion statement rather than a neccessity.
    Very rarely do we need 4WD – only in the depths of winter when the snow and ice are thick on the roads.
    So why do I love my pick-up which is a 2.5 litre Turbo diesel Isuzu Denver Rodeo 4WD Twin Cab ?
    Fantastic driving position, great view of the road ahead, practical, spacious, comfy, tows a caravan easy-peasy, 38mpg ( imperial gallons of course ) – these are the practical points.
    In the UK there is a romantic attachment to pick-ups. It revolves around our perception of America – the America of Route 66, of Harley-Davidsons, of Cadillacs, of rock’n’roll, of truck-stops, of the open road to the West.
    I have an Army of Northern Virginia flag sticker on my truck to complete the image – to complete the fantasy.
    I drive my pick-up playing rock’n’roll on the CD system. Jerry Lee Lewis. Chuck Berry.
    Despite the UK being small, wet and decaying, I enjoy the fantasy.

    • Thanks for reading, Paul, and for the great comment. I had to google Isuzu Rodeo (Denver) to see what it looked like, kind of resembles a Nissan Titan. You clearly aren’t trying to justify your pickup as a practical choice, but enjoy it for other, more aesthetic reasons. Sounds like a nice truck. 🙂

  9. Pickup Trucks make no sense to me. The bed is useless, since items will get stolen. They spin out in the rain. People with trucks justify them by buying a bunch of useless toys like boats, travel trailers, etc. putting further into debt. Trucks get horrendous mpg. If you have a large item, just have it delivered. If you travel stay in hotel. If you boat join a boat club or rent. Small SUVs make much more sense. Most tradesman use vans, since they need to secure their tools. Pickups are hard to park, handle poorly, and ride harshly. Small SUVs are now starting to take share from Pickups.

    • Gotta say I agree with you on every point here. As I may have pointed out in the article, if you’re not making a living with your pickup truck, it’s pretty hard to justify. And even then, many tradesmen can get away with a van. Thanks for reading!

  10. I have a small Ford Transit Connect van which I can’t recommend enough. I paid $20,000 new for it back in 2012 and I guarantee it has hauled more stuff than 90% of the pickup trucks out there. I don’t usually buy new but this was back when they were new to the market. The engine is super efficient, the gas mileage is close to 30, double most pickup trucks.

  11. $60,000 over 84 months, yes, but cost to own? No. The truck may still be worth $20,000 after 7 years so now you go from $60k to $40k cost to own. Now you’re down to $476/month.

    I made those numbers up but to make a point. Obviously they may vary however, the point is cost to own matters more than anything. I bought a $51k 4Runner 6 years ago incl taxes. It’s still worth around $25k bringing my cost of ownership somewhere around $350/month. You can barely lease a Camry for that!

    • Hey Jordan, thanks for reading! 4Runners are great trucks, and they do hold their value more than most makes and models. But using the example you’ve provided, regardless of the 4Runners value after it’s paid off, the cost of ownership over 6 years would be over $800/month, if someone was to finance the full purchase price over that timeframe. Now…if they owned the vehicle for 12 years, then the monthly cost of ownership drops to about $420. If you own it for 18 years, it falls to $277, but how realistic is that? Not very.

      The other issue is the opportunity lost by financing a vehicle at $800/month. Instead, how about buying a 6-year old 4 Runner for $25,000. If you finance that over 5 years, your monthly ownership cost spread over the same 6 year period as the person buying new, falls to $393, a savings of about $425/month. Now, let’s say that you take that monthly savings and invest it for 6 years at a 5% return.

      After 6 years, you’d add $35,500 to your bank account AND have a 12-year old 4-runner that is still worth 12K, that you could get a few more years out of. I’d argue that you could easily do that. I currently drive a 15 year old Toyota Sienna that has plenty of life left in it.

      I’ve written a much more recent article, called the $1500 Rule Of Car Buying, which proposes something even more radical, a way to lower your vehicle ownership costs to $1500 per year, or just over $100/month. It won’t work for everyone, but makes for a great rule of thumb.

      Here’s the link:

  12. I farm for a living, and I drive a used 1/2 ton Chevrolet. I would say 98% of the time it’s all that I need to go from farm to farm, and take care of business. The other 2% of the time I have an old Chevrolet 1 ton gasoline pickup for when I just have to have one. I see all of these guys driving those big money pits everyday, and it just makes no sense to me. Great article, and I agree with it completely.

    • So, you drive older pickups, even though you actually use them to make a living, while suburbanites roll in their $60,000 crew cabs to get the groceries and take the kids to soccer. Ah, the irony. Sounds like you’re doing it right. Thanks for reading, Ryan! 🙂


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