When it starts to cost as much to fix a truck as it would to purchase a new one, it’s time to say goodbye. This rule of thumb guides many contractors to weigh the severity of the vehicle’s maintenance or performance issue against the value added from a newer model.
“Downtime costs a lot more than a new truck,” says Erik Sweetser, owner of Green Grass Lawn Care in New Hampshire.
The cold and snowy New England winters often take a toll on Green Grass Lawn Care’s fleet. When the resulting maintenance issues become too costly, recurrent or time consuming to fix, Sweetser looks for equivalent trucks to switch out for their old vehicles.
“We are looking to replace trucks that are starting to fail in their operations. There was corrosion in the wiring systems related to snow plowing that caused the trucks to go down too much and take us out of production,” he says.
While trucks with functional problems are the obvious candidates for upgrades, contractors should also evaluate their equipment from the inside out. Improvements in fuel efficiency, cab features and towing capacity are other enticing reasons to switch out a vehicle.
On a superficial level, trucks that are rusty or looking too beat-up can damage the client’s impression of the company, says Brian Carawan, owner of BT Carawan Landscape Maintenance in North Carolina.
“When the appearance of the vehicle starts looking like it doesn’t really represent our brand, then we are looking to replace one. We have trucks that are about 16 years old that only have 90,000 miles on (them). It’s just a lot of wear and tear on the trucks, so when we replace them just depends on what the truck was doing in our fleet,” Carawan says.
Buying and selling tips.
When looking for replacement vehicles, contractors must stay up to date and do their research. Carawan always has his radar up looking for good deals online at Craigslist and eBay.
“All of our vehicles we pay cash for, so we have an advantage. If we see a good deal, we are able to go buy it and we can sell an older truck to switch it out,” he says.
If an old truck is in good shape, contractors may opt to trade it in when they purchase a replacement. But the majority of the time, BT Carawan sells them outright. Before selling a vehicle, contractors should first collect the vehicle history records and take off all logos and branding to avoid misrepresentation. Carawan then refreshes the paint and cleans and buffs vehicles before putting them on the market.
“We usually are able to sell them pretty quick,” he says.
Sweetser recommends reading online reports with reviews of particular trucks for common performance issues across different brands.
Then, when it’s time to visit a dealer, contractors should have questions prepared about factors like the expected longevity of the engine, load capacity, service life and the cost of yearly maintenance, Sweetser says.
Contractors should also seek out commercial dealers for the most applicable terms of sale. Carawan recently purchased a new Dodge Ram three-quarter-ton pickup that included an extended warranty the dealer threw in because he was a commercial company.
Carawan says most commercial dealers will have a dedicated service department to turn the vehicles around faster than a standard car dealership.
“Make sure your dealer understands that this vehicle has to work for production; it’s not just a residential vehicle. If this truck is not working, you’re losing revenue,” he says.
New vs. used.
While Carawan bought the Dodge Ram truck new, it was a bit of a special case.
“We were able to buy it for the current price of a 3- to 4-year-old truck with all of the rebates and incentives. So we were able to buy a brand-new truck with full factory warranty and we’ll know its history from the beginning,” he says.
However, Carawan prefers to buy used vehicles. Contractors may find that the market is much larger for used vehicles and the depreciation rates have leveled out for better resale value. A used truck with low mileage will still have many useful years ahead of it at a potentially significant cost savings compared to a new model. Most recently, Carawan purchased an additional truck for his accounts manager, a used Toyota Tacoma, that he found for a good deal online.
“There are a lot of miles that will be put on that vehicle, so buying a used one made more sense for us,” he says.
When purchasing used, contractors should make sure the vehicle is thoroughly inspected and will be reliable enough for its intended use.
For other contractors like Sweetser, buying new usually makes more sense, especially for snow equipment vehicles.
“We wouldn’t buy a used truck going into the winter maintenance fleet. If it’s coming from winter maintenance, it’s probably got the same problems that my truck has,” he says.
The final piece of the purchasing puzzle is figuring out what type and how much insurance coverage a contractor should get. Most contractors recommend carrying more than what their state requires for liability.
“If I was worth $100 million, I would have $100 million-worth of insurance,” Sweetser says.
There are other specific policy add-ons that contractors should consider as well. Last year, Carawan reaped the benefits of a few extra dollars’ worth of coverage when one of his crew members was hit and his truck required repairs.
“While that car was being worked on for two weeks, we were actually provided with an Enterprise rental truck. That’s something in our policy that only costs $20 to $30 extra a year,” he says.
Despite the best efforts to complete one truck upgrade cycle by scoring a good price, a contractor must continuously remain on the lookout for the next great deal.
“It’s important to replace your trucks because they don’t last forever,” Sweetser says.