"It's basic economics 101," says John Sheldon, used truck manager for Kenworth Truck Company. "There's a gross imbalance between supply and demand. The glut of used trucks poses a challenge for all of us in truck sales, and it's a challenge which will be with us for awhile."
Kenworth recently hosted more than 60 used truck managers to discuss issues and possible solutions to help customers in the selling and purchasing of used trucks. According to Ron Lipman, chairman of Kenworth's Used Truck Advisory Council, and used truck manager at Truck Enterprises of Harrisonburg, Va., the meeting allowed him to exchange ideas with other Kenworth used truck managers.
"Networking is really a key when it comes to used trucks," Lipman said. "Selling trucks - new or used - is built on relationships. As we build those relationships with other Kenworth dealerships, we can open up opportunities to do business across the country. In addition, we can better understand the value of different types of units. All of this is beneficial to our customers when they're trading in trucks, or when they're searching for the right used truck for their operation."
Sheldon says there never has been a better time to buy a used truck. "There have been major adjustments in used truck prices, so there are some excellent values available," he said.
While there is a plethora of used trucks to choose from, it's another matter when it comes to financing. "That game has changed," Sheldon stressed. "There have been a lot of business failures and repossessions, so finance companies have become much more cautious about new loans. We've moved out of a period where many good business practices were discarded by companies focused solely on selling product. Many of those past sales have become today's issues.
"Now, we're in a period where there is no substitute for good sense and sound business decisions," Sheldon said. "As a result, someone who is planning to buy on credit should look beyond zero-down offers and look at value and whether they'll ever have equity in their truck. That means the realistic buyer should be prepared to pay a down payment for a used truck and seek the shortest payment term possible. That's the best way to ensure that you have equity in your truck, and it enhances your financial ability to trade into another truck down the road."
Added Sheldon, "One final thought on financing: There is an old adage, if the financing looks too good to be true, it probably is."
If you're in the market for a new truck, it's still not too early to think about the used-truck market. "Decisions to optimize a truck for your operation might actually work against you in the used truck market," Sheldon said. "For example, the Kenworth T800 day cab with a large engine is a very high-demand truck, but I have seen some on the used truck market that were spec'd with small engines for bulk hauling. Used truck buyers generally prefer larger engines that are at least 400 horsepower. So what owners realized in fuel economy, and payload, they lost on the back end. The potential buyer of specialized equipment must weigh the advantages of the customization in their application versus its impact on resale value."
Words of wisdom? "Spec aluminum wheels, vertical stacks, and a premium interior package. As for engines, either buy 'big' or buy an engine and transmission combination where the engine can be up-rated electronically. Fleet buyers should also consider Eaton's new 'convertible' 9-speed or 10-speed transmissions that can be easily converted into a 13-speed transmission when the truck is traded. This way, the current customer can enjoy the operational efficiency of a lower horsepower engine run through a 9 or 10-speed transmission, but reap the resale benefits of a 13-speed transmission come trade in time."
Lastly, Sheldon advises, "the condition of your truck is extremely important. There's no substitute for a well-maintained - and that means keeping maintenance records - good-looking truck. If you care for your truck, it will take care of you when it comes time to sell."
Kenworth recently hosted more than 60 used truck managers to discuss issues and possible solutions to help customers in the selling and purchasing of used trucks. According to Ron Lipman, chairman of Kenworth's Used Truck Advisory Council, and used truck manager at Truck Enterprises of Harrisonburg, Va., the meeting allowed him to exchange ideas with other Kenworth used truck managers.
"Networking is really a key when it comes to used trucks," Lipman said. "Selling trucks - new or used - is built on relationships. As we build those relationships with other Kenworth dealerships, we can open up opportunities to do business across the country. In addition, we can better understand the value of different types of units. All of this is beneficial to our customers when they're trading in trucks, or when they're searching for the right used truck for their operation."
Sheldon says there never has been a better time to buy a used truck. "There have been major adjustments in used truck prices, so there are some excellent values available," he said.
While there is a plethora of used trucks to choose from, it's another matter when it comes to financing. "That game has changed," Sheldon stressed. "There have been a lot of business failures and repossessions, so finance companies have become much more cautious about new loans. We've moved out of a period where many good business practices were discarded by companies focused solely on selling product. Many of those past sales have become today's issues.
"Now, we're in a period where there is no substitute for good sense and sound business decisions," Sheldon said. "As a result, someone who is planning to buy on credit should look beyond zero-down offers and look at value and whether they'll ever have equity in their truck. That means the realistic buyer should be prepared to pay a down payment for a used truck and seek the shortest payment term possible. That's the best way to ensure that you have equity in your truck, and it enhances your financial ability to trade into another truck down the road."
Added Sheldon, "One final thought on financing: There is an old adage, if the financing looks too good to be true, it probably is."
If you're in the market for a new truck, it's still not too early to think about the used-truck market. "Decisions to optimize a truck for your operation might actually work against you in the used truck market," Sheldon said. "For example, the Kenworth T800 day cab with a large engine is a very high-demand truck, but I have seen some on the used truck market that were spec'd with small engines for bulk hauling. Used truck buyers generally prefer larger engines that are at least 400 horsepower. So what owners realized in fuel economy, and payload, they lost on the back end. The potential buyer of specialized equipment must weigh the advantages of the customization in their application versus its impact on resale value."
Words of wisdom? "Spec aluminum wheels, vertical stacks, and a premium interior package. As for engines, either buy 'big' or buy an engine and transmission combination where the engine can be up-rated electronically. Fleet buyers should also consider Eaton's new 'convertible' 9-speed or 10-speed transmissions that can be easily converted into a 13-speed transmission when the truck is traded. This way, the current customer can enjoy the operational efficiency of a lower horsepower engine run through a 9 or 10-speed transmission, but reap the resale benefits of a 13-speed transmission come trade in time."
Lastly, Sheldon advises, "the condition of your truck is extremely important. There's no substitute for a well-maintained - and that means keeping maintenance records - good-looking truck. If you care for your truck, it will take care of you when it comes time to sell."
media brand
0 Comments
See all comments