Everything has a lifespan, and your landscape trucks are no different. Managing their replacement is vital to your business because you don’t have time (or the patience) for breakdowns. And let’s face it: A truck that’s not on the road isn’t making you money. Here’s what you should know about buying and selling these key assets:
Know when to sell.
“Mileage is always one of the factors because you’re considering maintenance costs once a vehicle ages,” says Paul Seger, vice president of remarketing with Element Fleet Management. “Typically, you should look at replacing domestic vehicles at 70,000 to 80,000 miles and imports around 100,000 miles.”
These are general rules, but the goal is to sell before the maintenance expense ramps up the life cycle cost.
In most cases, that means you’re cycling through units every three to five years. But other factors may influence when to replace a unit. “We also look at engine hours of operation,” says Joe Birren, senior truck and upfit engineer with Merchants Fleet Management. “For example, you may have a bucket truck that idles more than it racks up mileage.”
Another reason to replace a unit is to improve performance through better fuel efficiency, towing capacity or to obtain enhanced safety features, such as back-up cameras. Time of year is something else to think about because “there’s more demand in the pre-spring market for these types of assets with the full year ahead,” Seger says. “Values tend to fall off in October and November.”
The good news is that the resale market is solid. “These are some of the highest used truck values we’ve seen,” says Chip Doering, president of Doering Fleet Management. “Small businesses are optimistic. Homeowners are spending more than in recent years on landscaping. It’s always cyclical, but this is a strong economy and resale market right now.”
While reselling your vehicle yourself is fine, it’s time-consuming (and sometimes frustrating). If you would rather not deal with that, it may be time seek the help of a fleet management company. Some offer à la carte services, including purchasing vehicles and marketing them through various channels such as online sales.
“If you trade in at a dealership, those vehicles almost exclusively go to auction, so you typically won’t get as much,” says James Crocker, director of fleet operations with Merchants Fleet Management. “We offer a program to purchase your vehicle outright, and cut the check immediately.”
Maximize your purchasing power.
If you’re a small firm with one or two trucks to replace, you can partner with a commercial dealership, which may have its own fleet manager specialist. “Find the largest multi-point dealer,” Doering says. “You want someone who’s not brand-specific and who has a high volume because with volume comes experience. And you want someone who’s not going to necessarily try to sell you what’s on the lot, which may not be in your best interest.”
Ask around: Many good relationships start by word-of-mouth referrals.
If you’re managing 10 or more vehicles, a fleet management company also can help you with purchase decisions.
“It never hurts to talk to several different companies and see what they offer, even if you are a small fleet,” says Ken Johnson, senior vice president of operations with Element Fleet Management. “You may or may not choose to go for it, but the conversation will make you better informed and help you know what’s out there and what value they can bring.”Generally, ordering a vehicle is your best bet both financially and for practical reasons.
“When you factory-order, you get your exact specs and you only pay for what you need,” Doering says. For example, a truck on the lot may have leather seats, bumping up the cost another $2,000 for something you really didn’t want in the first place.
Factory incentives knock thousands off your purchase, but they change constantly, so ask your dealer or fleet management firm about what’s currently offered. It’s also not a bad idea to Google “commercial truck incentives” to see what’s available in general.
“There’s always some sort of rebate out there,” Doering says.
Typically, you will find incentives for a fleet (sometimes a fleet constitutes as few as five new or leased vehicles per year), upfitting rebates, specific contractor rebates and loyalty rebates. Multiple incentives often can be combined.
“There’s more demand in the pre-spring market for these types of assets with the full year ahead.” Paul Seger, vice president of remarketing, Element Fleet Management
One of the biggest issues when ordering is that you’ve got to factor in delivery times in order to cycle vehicles in and out of your fleet without compromising your ability to function. This year, manufacturers have been tight on the allocation side, and logistics delays have impacted inventory, Birren says. Lead time depends largely on what manufacturer and model you choose, but buyers typically are waiting anywhere from 12 to 18 weeks for delivery. Upfitting may add another few weeks.
That means if you need a truck for next spring, it’s never too soon to start shopping. Most fleet managers interviewed for this story advise giving yourself at least three months lead time to be safe.
And one final word of wisdom: Don’t get emotional.
“The auto buyer in general tends to buy with emotion,” Doering says. “Stop. Slow down. Be deliberate. You’ll wait for delivery but you’ll be happier than buying something you don’t really need or want off the lot.”