SUVs and pickups are getting so big that they’re starting to have trouble fitting into some home garages, parking garages and public parking spaces.
Not even a global pandemic can stop Americans from buying their beloved pickup trucks, apparently.
While sales of passenger cars and SUVs have fallen sharply, pickup sales have held up surprisingly well as Americans take advantage of low-interest financing offers and refuse to let economic concerns stop them from getting the vehicle they’ve had their sights set on.
With the coronavirus pandemic raging, sales of passenger cars plunged 48.6% in the three month period from March through April, compared with a year earlier, according to car-research service Kelley Blue Book. At the same time, sales of SUVs fell 36.6%.
Sales of pickups, however, fell 18.7%, with much of the decline due to a drop in purchases by commercial and government buyers, according to analysts. Although some automakers haven’t released a detailed breakdown of their performance, retail pickup sales were much stronger than fleet buys, analysts said.
And in April, pickup sales exceeded car sales for the first time ever, according to Kelley Blue Book.
“They’re significantly outperforming the market,” said Jeff Schuster, president of global vehicle forecasting for research firm LMC Automotive.
Rasheed Walker, 31, bought a 2019 RAM 3500 in early June after co-founding a moving business during the pandemic.
He said the lockdown in Tuskegee, Alabama, was prime time to help people and businesses transport goods with some of the competition temporarily shutdown.
“There is this big void in the transportation industry right now. We wanted to get in where we fit in and start rolling,” Walker said. “We got a great deal on the price, and we had to jump on it.”
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To be sure, overall pickup sales are still down. But in May sales of the Toyota Tundra full-size pickup, for example, rose 8.2% to 11,529, compared with a year earlier, while sales of the Toyota Tacoma mid-size pickup rose 8.6% to 24,853. It was the largest May ever for Tacoma sales.
One likely reason is that states, like Texas, where Americans buy the most pickups, have been less affected by shutdown orders than more densely populated states in the Northeast that were on tight quarantine orders.
“The buying demographic has been in places where shelter-in-place orders haven’t been as strict,” said Jessica Caldwell, an analyst at car-research site Edmunds.
Plus, for small business owners and sole proprietors who need trucks for jobs like construction and renovation, many can’t wait to replace their vehicles, Caldwell said.
“A lot of them are used for business purposes and hauling,” she said. “That replacement period can’t necessarily be held off for very long.”
Aggressive financing offers from the automakers have kept sales humming. Dealers have extended 0%, 84-month financing offers on pickups in many cases, Caldwell said.
Those offers have allowed many buyers to buy “more expensive pickups than they would in the past,” she said.
It’s normal for new full-size pickups to sell for $60,000 to $70,000, which means that 0% offers can save people a lot of money in the long run, said Eric Lyman, chief industry analyst for ALG, a subsidiary of TrueCar.
“Because the 0% financing has such a bigger dollar impact when you ratchet up the amount of funds you’re financing, that also had an impact of people saying, ‘Now’s a great time to buy,’” Lyman said.
With pickup truck buyers snapping up vehicles and many plants having just recently restarted production following two-month shutdowns, “the large pickup segment is at critical risk of supply shortages,” Barclays analyst Brian Johnson said in a research note June 1.
Inventory of large pickups was 44 days at the end of May, down from 88 days at the end of May 2019, according to Barclays.
Although economic concerns, including the highest unemployment rate since the Great Depression, remain significant, there’s one other factor besides financing that’s helping pickup sales: gas prices.
The national average price for a gallon of gas fell below $1.90 in May and was $2.10 as of Friday, according to AAA. That’s down from $2.72 a year earlier.
In addition to gas prices, federal economic stimulus checks ranging up to $1,200 per adult probably also contributed to sales, said George Augustaitis, director of industry analytics at CarGurus.com.
But he said in an email that tightening credit conditions “could create a headwind for both June and July new truck sales.”
Contributing: Dalvin Brown
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
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