04/10/2025
Cost pressures and inflation drive consumers to sedans, not SUVs
Source: Fleet Management Weekly
Evidence is mounting that “peak truck” is a U.S. economic trend to watch in 2025 as vehicle affordability problems increase.
Dave Cantin Group (DCG), a mergers and acquisitions advisory company to retail automotive groups and their owners, identified “peak truck” as one of its key trends to watch in a new report. Rather than reflecting a lack of interest in trucks and SUVs among American consumers. The average purchase price for cars now hovers around $37,400, while for SUVs and CUVs it’s more than $43,600 and for pickups it’s $54,600.
“This isn’t just an automotive story, it’s an American consumer story,” said Cantin. “It’s not a declining interest in trucks. We’re not saying that segment is going away. But the consumer survey we conducted as part of our Market Outlook Report finds that the American consumer is feeling the cost pressure of rising prices.”
“In response, we see a decline in the number of people who believe their next purchase will be a truck or SUV and an equivalent increase in the number who intend to purchase a car. Add to that the report that inflation hit a seven-month high in January, and we’re seeing even more evidence that peak truck is a real trend to watch.”
Peak Truck Indicators:
- A Shift in Consumer Spending: Consumers’ intent, not necessarily interest, is shifting toward cars because of rising average prices and the need for more affordable monthly payments.
- Affordability Drives the Shift: Report data shows that roughly 1,100 consumers are intent to purchase cars, which shows an increase by 3%, reaching 29%, in 2024. The intent to buy trucks has decreased by 2%. While SUVs remain the most popular body type, consumer intent to buy dropped 1% for SUVs from 2023.
- Changing Demographics and Preferences: The report highlights a shift among older consumers, with the 35–54 and 75+ age groups increasingly favoring sedans. Additionally, tighter budgets—especially among buyers earning between $75,000 and $100,000—are prompting a move from SUVs to more affordable car options.
- Marketwide Impact: The “peak truck” phenomenon is just one manifestation of broader affordability issues. With prolonged high interest rates pushing consumers to closely scrutinize their monthly expenses, the record average age of vehicles on the road (12.6 years overall and 14 years for passenger cars, according to S&P Global Mobility) further illustrates the reluctance to invest in new, higher-priced vehicles.
- Inflation’s Role: Compounding these trends, U.S. inflation unexpectedly rose to 3 percent in January, a seven-month high. This inflationary spike confirms that consumers continue to face cost pressures, reinforcing their focus on affordability and likely accelerating the shift away from higher-priced trucks and SUVs toward sedans and lighter-trim models that offer lower monthly payments.
- Broader Industry Implications: Manufacturers are responding to these market signals by shipping vehicles with fewer bells and whistles to dealers, an approach designed to help reduce costs for buyers. Additionally, value-driven brands such as Hyundai and Kia are seeing increased interest as consumers search for quality vehicles that align with their tightened budgets.
“The automotive industry has always been an early economic barometer, and what we’re seeing now — that Americans may have hit max capacity for the largest, most expensive vehicles, at least for now — is a clear indicator of the cost-of-living pressures facing the American consumer and the overall economy,” DCG Chief Business and Strategy Officer Brian Gordon said. “This is a trend that will continue to play out and has the potential to fundamentally reshape manufacturer strategies and what ends up on dealer lots. It’s a trend we see continuing to define the market into 2025.”