How To Get a Square Deal on a Straight Truck
It's not a good time for the used expedited truck market. That is, it's not a good time for the used expediting truck dealers.
When the previously booming economy faded away a short time ago, dealers were left with lots of new and used expediting straight trucks on their lots. It might not be a good time for THEM, but it can be a great time for YOU, the used truck buyer.
Some owner-operators only buy used trucks, on the assumption that the lower truck payments help them make a higher profit. Others believe new is the only way to go because they depend on the new truck warranty, or they want custom specs. Only you can make the decision about which is right for your situation.
Once you've decided buying a used truck is the way to go, you need to figure how much truck you can afford. That means knowing your costs of doing business, budgeting adequately for maintenance and operating expenses and estimating how much monthly payment you can afford.
Dan Tilley is the Expediting Truck Specialist at Freightliner of Knoxville, and he states, "For a first time buyer, it's easier to get in the emergency freight business with a used truck. There's nothing wrong with a used truck that's received proper maintenance. The prices have really come down in the used truck market and it's much easier for the first time buyer to finance a used truck."
Bill Moore of TSI/Western Star in North Jackson, OH, agrees: "Used expediting trucks are extremely price competitive against new trucks right now. A buyer should check out the late model trucks, that is, the 1998-2001 model years; there has been a considerable price reduction on them."
"The used truck glut seems to have stabilized, especially in repossessions and the amount of used trucks should fall off within the next six months. Some of these late model trucks can still be found with existing warranties on engines and drivetrains."
"I recently sold a 2001 FL 106 for $55,000 and it still had a base warranty of 10 months left; that's a good example of the deals that can be found on the used expediting straight trucks."
The next step is finding the right truck, and the first thing to think about is specs and application.
It's the same as if you were going to purchase a new truck, Tilley explains. "You need to consider such factors as the cargo you'll be hauling, types of routes and terrain you'll be operating over, how many miles per year you'll be running, federal and state requirements and so forth."
The next consideration is where to look for a used truck. The most obvious place is the used truck department of a new truck dealer and independent used truck dealers.
Other sources of used trucks are private parties and auctions. You can check the classified ads and buy directly from an owner-operator who is selling his truck, but you're probably not going to get the same kind of warranty offerings as when you buy from a dealer.
One way to get a head start on the truck-finding process is to use search engines to explore the Internet's nationwide used equipment inventories. These are maintained by OEMs, dealers, trucking companies, truck brokers, auctions etc. Truck dealers' web sites and of course, Expediters Online.com, are target-rich areas.
Regardless of where you acquire your truck, it's very important that you know who you're doing business with, stresses Dan Tilley. It's a good idea to check on how long they've been in business, what kind of a reputation they have in the marketplace and if customers have been satisfied with their purchases.
A long-time veteran of the new/used expediting truck market is Dan Schultz, owner of Summit Trading in Kent, OH. With 14 years in the business and after selling over 1400 trucks to satisfied buyers, Schultz has developed his own philosophy of truck buying and the bottom line of the expediting business. He says that the name of the game is 'Return On Investment'.
"It's a buyer's market in used trucks and it's a perfect opportunity to add or update one's fleet at a significant savings. I believe that with the downswing in the economy, the Class 7 truck will again take it's place in the expedited business.
"In the recent past, a 3 year old truck with 300,000 miles was worth $25,000 or more; now with this sluggish economy, that same unit is worth between $20,000 - $25,000.
"There are some great deals in this market right now, and I believe that we will see a resurgence in the more inexpensive models. A good used Class 7 truck will do the job more economically than that $100,000 Class 8 truck."
Schultz also says that the days are gone when a first time buyer can put 10 per cent down and go to work. It's his contention that the thing to do in today's market is to put down as much as possible and finance for the shortest time possible."
"For example," he says, "A driver purchasing a $70,000 truck with 10 percent down and financing for 60 months is upside down for 42 payments. Instead, if he puts 20 per cent down and finances the truck for 48 months, he will be in equity in 29 payments."
"This gives the owner the ability to pull out of the business if necessary and still receive full value of the truck."
Schultz has some words of general business advice that he has compiled after his many years of working with expediting owner/operators: "I would suggest to the owner/operator - don't be emotionally attached to the revenue side. So many people measure their sucess off the revenue side of the ledger; a good week means a good mood, a bad week means a bad mood."
"If one pays attention to the debt side of the ledger, the revenue will take care of itself. Management of debt is key. For example, over 50% of the truck's revenue for the year will be achieved in the last 4 months of the year, so don't base your success or failure on a weekly basis but rather how you did at the end of the year."
"A good formula for saving for the truck is to put 6 cents a mile into a maintenance account and that will cover tires, service, etc. The time to put that money away is while the warranty is still valid for two years."
Once you've located an affordable truck with acceptable specs, the next step is to ask for the vehicle's maintenance and service records. This information will tell you how well the truck was maintained and help determine what types of repairs can be expected. A well-maintained truck can provide years of reliable and cost-efficient service, notes Tilley.
The overall objective is to get as much information about the truck as you can. Don't be afraid to ask questions. If you can, talk to the mechanic who inspected the truck The more information you have, the better able you are to make the proper decision about a used truck.
Make sure the truck has a current DOT inspection or it can be provided by the seller. Dan Tilley states, "It's important to realize that you're not just buying a truck, you're investing in your future business."
Dan Schultz tells us, "The toughest thing for the expediting truck is running thru the wind. A study done not long ago shows that the average size load for a "D" unit is around 4000 pounds. If the truck's life was only in expediting, it's easy to see if truck was abused."
"A smart buyer will have the serial number run and this will show any work that was done through the dealer network. Have an oil sample pulled, this can determine what kind of work was done with this truck."
"Plug the truck in at the dealer and retrieve the stored data in the computer. An authorized dealer can give you all that information."
"One of easiest ways to determine how truck was used is to check the general appearance of the cab and sleeper; for example, if the mattress is dirty, it shows that the owner or last driver just didn't care. Are the seats worn, are the gauges and electricals all working, if the brake pedal is worn, be suspicious."
Schultz has a list of things to look for:
EXTERIOR: Look for body damage, rust or corrosion. What is the condition of the paint and stainless steel/chrome components and accessories? Does the truck sit square? Note any signs of wear, abuse or neglect and check for leaks under and/or on the vehicle.
INTERIOR: What is the condition of the seats, dash, upholstery, panels, floor, sleeper etc.?
ENGINE: Check for leaks; cracked or soft hoses; loose, worn or frayed belts; loose wiring and clamps. Inspect condition of all filters and check fluid levels.
Start the engine and let it warm up. Look for leaks as the engine idles. Heat and pressure buildup in the lubricating and cooling systems may make leaks appear. Leaks at the front and rear of the engine mean big repair bills.
One area that some people overlook is that of pulley alignment at the front of the motor. With the motor running, a visual inspection should tell if the pulleys and belts are pulling in a straight line.
Schultz singles out excessive smoke as a telltale sign of problems: "The first indication of a worn-out motor is blowby. Get the motor up to operating temperature, pull the dipstick and take off the oil filler cap. All engines have little bit of blowby, but a ring problem will puff excessive smoke.
Watch gauges for signs of problems. Are readings in the normal range?
Inspect exhaust system for leaks and damage.
CLUTCH AND TRANSMISSION: Check the clutch for proper operation. Shift through all gears and make sure there is no difficulty in getting into or out of any gear. Schultz adds, "With the exception of a few drivetrain components, including clutches, I have found that driveline failures are few and far between due to negligence."
STEERING: Check steering wheel for play. Does it turn easily? Does the steering linkage respond to turns without making noises? Does the truck pull to one side? Tread wear on tires will be evidence of steering/front end problems. On rear tires, if there is a real axle alignment problem, the tires will show chopping.
SUSPENSION AND BRAKES: Check brakes for proper operation and air leaks. Make a visual inspection of the airbags in the rear suspension, look for any chafing or obvious problems in suspension. You should be able to look behind each rear wheel and get a measurement on the brake shoes.
CARGO BOX: There are some cheaper, poorly built van bodies on the market and one should look for cracked welds on the subframe of the van body. Roll up doors are a higher maintenance area, you should look for wear on the rollers, cables and springs.
On barn doors, you should look for signs of damage on hinges; the doors should close easily. Check the floor for damage; there should be no plates or other signs of repair which could indicate a weak area in the floor. Be sure the threshold plate allows for a smooth entry.
A potential problem area can sometimes be in the tilt-forward fiberglass front ends. Look for any repairs on the hinge area of the hood; look for previous damage or developing cracks.
USED TRUCK WARRANTIES
Warranties for used trucks can be purchased for various components and systems on the truck, with various time limits and of course, at various price levels.
Some folks on the financing side of things who we interviewed for this article were somewhat ambiguous about the value of the used truck warranty, in regards to cost vs benefits. In certain circumstances, the warranty can be a plus, but the experts do caution that, for a Class 7 truck in particular, the warranty could be somewhat pricey. Depending upon level of coverage, it could run anywhere from $1500-$3500 or more.
They tell us that a warranty might be best for a first-time buyer with limited funding; the extra price of the warranty can be part of the truck financing.
There you have it, some words of wisdom from the professionals in the used truck business. We hope this information has been of some benefit and Good Luck!
Expediting Truck Specialist
Freightliner of Knoxville
1413 Everett Road
Knoxville, TN 37932
385 S. Bailey Road
North Jackson, OH 44451
4200 Sunnybrook Rd
Kent, OH 44240