By Gregory Van Tighem
In today’s operating environment, not all contractors want new trucks in their fleet. Often buying used trucks allows a smaller contractor the opportunity to go after business that may not provide standard operating margins.
Financing used trucks usually provides an owner with a much lower monthly payment than an owner financing new trucks. Truck fleets and operators can lower their liabilities and keep more of their working capital, said Zachary Bourn, director of used equipment for PACCAR Financial (PFC).
But before buying used trucks, Bourn advises all interested fleets and operators to do their homework and know as much as possible about a truck’s history. With the Federal Motor Carrier and Safety Administration’s Compliance, Safety, and Accountability program requiring truck operators to be much more vigilant about the safety of the equipment they operate, the days of buying used trucks nearly sight unseen are over. Consider buying used premium brand trucks from a local dealer or from a used truck center established by captive financing companies, Bourn added.
But perhaps more important than choice is the peace of mind that comes from buying used trucks from a trusted seller, Bourn said. Before any truck goes on the lot for retail sale, PFC conducts a thorough 105 point inspection process to verify each vehicle is ready to perform. “Our inspection process helps ensure the second owner of that vehicle will be as pleased as the original owner,” Bourn said.
Bourn also offers these five tips to truck operators and fleets when buying used trucks:
Tip No. 1 – Know what you’re buying yourself into
With state and federal roadside inspectors looking closely at equipment, particularly for mechanical conditions that would likely cause an accident or breakdown, Bourn said truck fleets and operators have to be much more vigilant about inspecting equipment and checking maintenance records. If you’re not fully comfortable with the idea of buying a truck from someone without inspecting it first, Bourn says don’t. He recommends conducting a full inspection before buying, paying particular attention to the truck’s brake systems, coupling devices, exhaust systems, frames, fuel systems, lamps, electrical systems and batteries, steering mechanisms and king pins, suspension, tires, wheels, rims and hubs. Use the same pre- and post-trip inspection sheets you or your drivers use and look for conditions that could affect your safety score if you were operating the truck that same day. If possible, ask to see recent inspection reports or maintenance records associated with the truck.
Tip No. 2 – Look for value
Based on the experiences of PACCAR Financial’s used truck centers, here are three key specs that drive a used truck’s value, making it more attractive and productive and lowering its operating cost:
Transmission – A convertible 9/13-speed transmission, a manual 13-speed transmission or a manual 18-speed transmission is most appealing. According to Bourn, manual transmissions that offer shorter shifting ranges provide more operational flexibility and can add as much as $4,000 to the value of the truck.
Interior – Lower quality interiors may seem cost-effective, but they can show considerable wear. Used truck buyers should look for premium interiors. Premium interiors, like the Platinum interior package on Peterbilt trucks and the Diamond VIT interior package on Kenworth trucks, not only look good, but also hold more value and can make for a more comfortable and productive working environment.
Fifth wheel – An airslide fifth wheel will offer you more flexibility for your operation by making it easier for your truck to haul different trailers with varying weight characteristics.
Tip No. 3 – Clear the air
Pay attention to the type of engine and emission control system the used truck has. If the truck is equipped with a diesel particulate filter, check its current condition and whether it’s been cleaned at regular intervals. Even if you won’t be operating your used truck in California, consider choosing used trucks that meet California Air Resources Board requirements over ones that don’t. Trucks with aerodynamic fairings will save you money on fuel costs over ones that don’t. Plus, your trucks become eligible for EPA SmartWay certification, which may be required by your customers.
Tip No. 4 – Let the years go by
Until recently, the model year was the main factor in establishing a used truck’s value. That made sense; truck components were fairly similar from year to year. The older the truck, the greater its maintenance needs. So a newer used truck was almost always worth more than an older one. That’s changed in the last few years; mileage has become the most important indicator of a used truck’s value. Thanks to new emissions equipment, different model year trucks are not quite comparable. Today, the first question you should ask about a used truck is, “What’s the mileage?” The most desirable, highest-value used trucks will have 300,000 to 400,000 miles on them. Lower-value, but still desirable trucks will show 400,000 to 500,000 miles.
Tip No. 5 – Knowledge is power
When buying used trucks based upon financing, many truck and fleet owners choose a lender based solely on the interest rate. While the rate should be competitive, consider whether the lender is willing to work with you on such things as payment schedules, particularly if your company’s business is cyclical.
Also consider whether the lender is knowledgeable about trucks and the trucking industry. A lender that understands trucks can be in a better position to determine a truck’s true value and assist your operation if additional financing is needed.
This article appeared in the July issues of the ACP magazines.