TRUCK PURCHASING FUNDAMENTALS
Purchasing A New Truck For Your Business: 11 Fundamentals
Keeping dependability, research, warranties, specifications and other key elements in mind during your pre-buying work will help you make an excellent truck purchasing decision.
By Alan Shapiro, President, HazChem Environmental (This article previously appeared in Waste Advantage Magazine, April, 2021)
A truck investment is one of the most important purchases you can make for your organization. In order to get the best vehicle that meets your needs, we have found that following these fundamental rules can be an enormous help.
“Price” is not at the top of the list, not even close. If you have a truck that is constantly underperforming — resulting in forcing your company to reschedule or cancel business jobs — you will be unhappy. If you happened to have paid a “low price” for that undependable truck, thinking of that low price will not make you any happier.
On the other hand, if things are going well with the performance of your new truck and it is dependable, you will not dwell on the price you paid, even if it’s considered a “high” price. When a truck is doing its job, remaining dependable, you will never mutter to yourself: “Why did I pay so much money for that truck?”
Number 1 on our list is dependability. How do you know if the truck you are purchasing is dependable?
“There are two elements to determine whether a truck is dependable or not and they are both important because they result in customer uptime, or lack thereof,” says Oscar Horton, President and CEO of Sun State International Trucks (Tampa, FL), and named 2020 Truck Dealer of the Year by the American Truck Dealers (ATD) Association.
“The first factor is the quality and reliability that is built into the product during the procurement, engineering, and manufacturing stage by the OEM. In many cases, there is common componentry used across various OEMs. To me, the second factor is the real differentiator: How quickly can your local dealer turn the truck around when a repair is needed? Who you buy from, their reputation for customer service, support, parts availability, hours of operation and technician training areas are as important, if not more important, than just the truck itself.”
Another key fundamental in making your commercial truck purchase is research. Pat Zeck, Operations Manager of HazChem Environmental Corporation, says, “Research, research and more research. This is a huge fundamental piece toward buying a new truck for a waste disposal company — and I mean a lot of research. When you are spending, say, $150,000 on a new commercial truck, I wouldn’t spend just five minutes on research. Look up the truck’s recalls. Look up all and any review you can possibly find on that truck. And call everyone you know who has purchased that truck you are eyeing.”
There is no one-size-fits-all with regards to warranties. However, you must ask the right questions regarding the warranties — and you must get the right answers. So, what key questions should you ask regarding warranties?
“Ask what the price is for the miles/hours-of-operation/length-of-term-you-plan-on-keeping-truck to help determine if the value point is there,” Horton says. “Drivetrain components are typically the most costly, so if peace of mind is important to you, it may be worth buying an insurance policy via a warranty.
“In addition to asking what the base chassis warranty is, it is important that customers are aware that all OEMs offer a variety of warranties, whether it is on specific drivetrain components or the entire chassis. From there it gets to be a cost/value equation. Customers should also ask about deductibles or any limitations or exclusions that may be written in any of these warranties.”
By “questions,” we mean questions to the salesperson/dealer before pulling the trigger on your commercial-truck purchase. First, Horton suggests you ask yourself a huge question regarding the salesperson/dealer you are working with: “Will they be there for you when you need them?”
On the day of sale, you are happy you have a new truck. The salesperson and dealer are happy they have made a sale. The pervasive mood is that of a honeymoon. However, within a few hours, the honeymoon is over: You are now in a business marriage — you and your new truck. And some breakdowns are inevitable.
So, before buying, says Horton, “Ask for other local customer referrals who can share their experience with the product and the local support.” The pre-buying period is no time for bashfulness. Be direct.
“Depending upon what is important to the specific customer, ask probing questions of the salesperson about that particular area,” said Horton. “For example, if driver comfort is important, you should ask the salesperson as to how their truck meets that need. Same for uptime, fuel economy, resale value or whatever else may be your hot button.
“A good general question to ask is about the total cost of ownership of the product. This encompasses the upfront purchase price, running costs to operate, uptime, and resale value. A good salesperson should be able to articulate the value proposition of their product, dealership and overall brand.”
Spec. Spec’ing, Spec’d. Spell it anyway you want, call it anything you want. The important thing is to do it accurately. Cindy Campbell is Vice President at JX Enterprises (Hartland, WI), a company that operates in 27 locations in Wisconsin, Indiana, Michigan and Illinois, and is the largest Peterbilt dealer group in the Midwest.
She says, “When you are purchasing a truck, if it is spec’d appropriately for its intended purpose, you will maximize your uptime which will assist with driver retention. This will most definitely have a positive impact on the bottom line for your company. If your truck is well spec’d, it will ensure that you receive a higher value in the secondary market. In other words, you will get a better trade-in value.”
Spec’ing correctly does take some time, but it is a vital part of the commercial truck-buying process.
“Spec’ing correctly means you are focusing on the overall value of a truck,” Campbell says. “So often, companies get fixated solely on acquisition cost, and they don’t consider the overall life-cycle value of the asset which can have a significant impact on profit.”
“You must consider the comfort of your driver when buying a new truck,” Campbell said. “The more comfortable your drivers are, the less fatigued they will be each and every day. Once your driver gets into that truck, it’s imperative that they are comfortable. If your driver’s ears are ringing due to excessive road noise or if their body aches due to a cheap seat, then the driver is far more likely to experience fatigue — and that can contribute to driver turnover. If you’ve made sure that you have set up the cab correctly, like the right insulation package, driver’s seat, sound system, gauge package, multiple cup holders, etc., then you are helping to abate driver fatigue — and your driver will be coming into work every day with a great attitude.”
Strong post-purchase dealer support cannot be overstressed. Your truck will only be as dependable as the dealer you are banking on to support it. “Dealer support is essential,” Campbell says. For example, Campbell’s company provides a “Rapid Check” guarantee, which means the service department will take a look at your truck and quickly let you know whether the problem is a “quick fix” or will take further diagnostics.
“We require all 27 of our dealers provide a ‘Rapid Check’ guarantee,” Campbell said. “Customers need the ability to plan for the appropriate repair time.”
Truck owners want to know very quickly what the issue is with regards to what needs servicing on the vehicle. The dealer should give you the knowledge of just how long that truck of yours will be off the road. You always like to hear, “It’ll be ready in just a few hours,” but that is not always possible. So, if the dealer can give you the knowledge of just how long your truck will be off the road, be it a short or long period of time, then consider that quality dealer support.
You can adjust to having a truck off the road for a while, as long as you are told relatively quickly about having to make that adjustment.
Some companies in the waste disposal business want to employ their new truck from birth to death. Others plan on using that truck for five years, then trade it in or sell it. No outsider can tell you which plan fits you best. However, owning a well-built truck that has earmarks of a long life is never bad.
If you planned on keeping your truck for its full life and it is on the road for over a million miles, that is great. But if you choose to keep that truck for perhaps five years, and then resell, your future buyer will be more apt to pay a higher price if that truck is destined for a long life.
Campbell says, “I do feel it is essential that the material and components of the truck will support longevity. Many companies want to trade in their truck after five years because of the warranties and other factors. There are other companies that don’t want to purchase another truck for 10 or more years because it fits their business model. The best decision you can make is to stay in compliance with your own business model.”
Get your answers regarding fuel efficiency early in your truck-buying process. It will greatly assist your final decision-making process. “Fuel efficiency is a very big deal,” Campbell said. “Again, it’s key to your bottom line. Two of the biggest costs in trucking are fuel and tires. Aerodynamics will play a large role in the fuel efficiency of your truck. Other contributing factors include driver proficiency and specifications of the engine relative to the travel lanes.”
“Every OE and many dealer groups will have a financing arm,” Campbell said. “What you are looking for is a good partnership. Who will give you the better deal? Who will give you the better rate? Who will give you the better options? It really comes down to who can best support your needs.”
Spend the time to write out the goals you want to achieve with your new truck purchase. Look at the big picture with regards to price, not just the front-end cost.
“Get competitive quotes from other OEs,” said Campbell. “Then apply the price against the lifecycle value that you’re getting and then you can make an educated decision on what best fits your own business model.”
Making that Decision
Dependability, Research, Warranties, Questions, Specifications, Comfort, Support, Longevity, Fuel/Efficiency, Financing, Price. Keep them all in mind during your pre-buying work — and you will make an excellent decision.
Alan Shapiro has been in the waste disposal business for more than 30 years.
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