Surviving Your Next Truck Buy
The knowledgeable people of expedited trucking generally advise that owner-operators should enter this business by first driving for an owner and learning the ways of expedite without that substantial financial investment.
And, conventional wisdom often says, buy a used vehicle. A used truck will typically run 40-50 percent less than a new truck. Of course, we're all familiar with the "surprises" that sometimes accompany a used vehicle, and you might not be able to find one with all of the features and creature comforts that you're looking for.
For the purposes of this discussion, we'll assume that you've already paid your dues in expedited trucking. You've been an owner-operator now for a period of time, driving used equipment.
That truck you've been running is about to "time-out" with your company or it's coming up on major overhaul time. You and your spousal co-pilot/business partner are thinking about the purchase of a brand new straight truck.
Of course, buying the right truck will have a lot to do with the success or failure of your business. In addition, it can be maddening to have to live with a truck that just doesn't suit your needs - it's underpowered, the sleeper is too small, etc.
Obviously, there are no guarantees that your purchase will be perfect in all areas, but the time you spend investigating the available equipment will go a long ways toward ensuring your satisfaction with that new truck.
Depreciation is an important factor to consider in your new truck purchase. Trucks typically lose their highest percentage of market value in the first year of operation. So, if you decide after a year or two that your choice of that new business vehicle doesn't suit you, be prepared to take a substantial loss if you find it necessary to trade for another.
Where to buy
With the specialized nature of the expediting truck and its applications, it's probably not in your best interest to simply call the local truck dealer and tell them what you want. The chances are that the typical dealer will only have a basic idea about the requirements of the expedited carriers and expedited trucking.
Most expedite owner-operators would agree that these specialized trucks need people who specialize in building and selling them.
The new truck buying process will probably mean that you will be sitting and talking with the salesman in his office as much as you will be test driving and walking around the trucks.
Don't be shy about asking the salesperson to explore your alternatives. You should come prepared to explain how the truck will be used and any special preferences or needs. Ask a lot of questions.
Get price quotes from several dealers and for several makes. Be sure they include all added costs, such as taxes, licensing, transportation and any pre-delivery prep work or modifications done by the dealer.
Spec'ing the expediter truck
If you're planning on leasing your new truck with the established expedited carriers, many of the equipment decisions have already been made by the carriers' vehicle requirements, and you're probably familiar with their restrictions.
This is an area where the experienced expedited truck dealer will be of assistance; he has probably worked with many of the carriers in truck setup and is aware of the companies' requirements.
Even using those basic carrier requirements as your guidelines, there are still many choices to be made in setting up that new truck. For the general commodity freight that expediters transport, most buyers will opt for the standard 22-24 foot cargo box; typically, the biggest decision to make regarding the box is whether to choose roll-up or barn doors.
Sleeper size and the level of luxury of that sleeper might be the toughest question for many - how much more revenue-producing cargo could you haul if you decided not to buy that big sleeper with all the creature comforts?
On the other hand, for those expediter couples who call that sleeper home for months at a time, an under-sized sleeping/living module can really test the limits of their relationship. Lack of comfort or convenience items in the sleeper can also make that time spent in there a trying experience.
Many options now exist in regards to power trains. No longer is the expediting truck buyer limited to the low-horsepower engines of the past.
Possibly the greatest change in the expedited straight truck over the last five years, besides the availability of larger engines, is the changeover to automated/automatic transmissions. All of the major expedited truck dealers report that the no-shift transmissions have become the standard equipment on new expediters.
Is bigger better?
A growing trend among expediters has been the use of Class 8 platforms for their businesses. These buyers typically come from a Class 8 trucking background and are looking for a "ten-year" truck.
Also, the people who require the Class 8 platform are from the specialized divisions of expedited carriers, and those companies sometimes require a heavier duty truck.
Again, spec'ing the truck is where the expedited truck specialist can be of invaluable assistance. The dealer or salesman wants to sell you a truck, but most realize that if he puts together the truck you want at an affordable price, he's most likely developed a return customer.
Warranties don't guarantee reliability, but they do pick up at least part of the cost if a part or component fails prematurely. Beyond time and mileage, look carefully at written warranty statements to determine what's covered and what isn't. Along with parts and labor, some warranties cover towing and even the cost of a rental vehicle if your truck has to be in the shop more than a day or two.
First-time buyers need excellent credit. Lending experts say that a record of on-time mortgage or car payments helps. So does a history of prompt credit card payments and minimal debt.
If you've had a recent bankruptcy or you're delinquent on a credit card, auto or even rent payments, you've got a big obstacle to overcome.
One expedited dealer says, "There are very few businesses that you can start with zero down. We really believe that an individual who is looking to get into business needs to make an investment."
Lenders prefer owner-operators who have been with the same carrier a number of years. As a Class 8 truck dealer explained, whenever owner-operators change carriers they interrupt the revenue stream.
There's a period of time before the cash flow resumes, but in the meantime, they still have truck payments and other fixed costs. That cash flow problem is worse for owner-operators shifting from carrier lease to running under their own authority.
Truck buyers should also be aware of the fact that many finance companies offer other products and services like insurance, credit cards, even bookkeeping and compliance services. It's always smart to shop each item separately before buying a bundled package, but it never hurts to put the full menu on the bargaining table.
The dealers in the expediter truck market will make every effort to win the customers' business, but sometimes, they're limited on price flexibility.
Don't start until you have a firm price quote. Shaving a little off the purchase price is every buyer's wish, but don't overlook other possibilities such as an extended warranty or preventive maintenance services at a reduced rate or no charge. Insist that any free or reduced charge extras be detailed in writing.
If it's a warranty, find exactly what's covered and how it's administered. Does work have to be done by the selling dealer or is the warranty good wherever you travel? What's included in a maintenance plan, and where can you get service?
Don't make the final choice solely on the basis of price and incentives. Find out something about the dealer. Do they have a reputation for honesty and good customer service? What happens to their customersâ€™ especially their owner-operator customersâ€™ after the sale?
So it makes sense to shop first among dealers you know or those who have been recommended.
The value of your truck in three years, five years or whenever you plan to trade or sell it will depend on the make, model and specifications as well as the condition of the vehicle and the market for used equipment.
To get some idea of what various models and specifications might be worth in the future, ask a dealer to let you thumb through their copy of the NADA Commercial Truck Guide or National Market Report's Truck Blue Book. Or, cruise the many used truck locator and sales sites now on the Internet.
As a general rule, comfort, convenience and appearance features are usually worth a little something extra at resale. A well-equipped sleeper usually brings more than a bare bones unit.
Other add-ons that typically boost resale include an APU, dual fuel tanks, air-ride suspension, power windows and a full complement of gauges. Extended warranties are also a resale plus, if they can be transferred to the next owner.
At delivery time
Inspect your new truck before taking delivery. Make sure it has everything you specified. Look for missing or loose bolts, chafing hoses and wiring, lube levels. Make sure doors fit properly, the heater and A/C work, dash controls are functioning, and the truck is properly lubed.
Do a test drive, checking for vibrations or unusual noises, problems with steering or balance. Review the paperwork to make sure any promised "extras" have been included in writing.
Review the break-in schedule and recommended maintenance with the dealer's service manager. Make sure any discrepancies or problems are corrected before you drive off the lot.
"Most of the people in expedited trucking, and even those coming to this industry from outside of trucking," says one expedited dealer, "are business people. They're worried about cost per mile and maintaining their bottom line. They are aware of profitability of their truck."