Featured Article: Buy new or redo?

Max Kvidera | April 01, 2010
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Any preventive maintenance service presents a good opportunity to have the engine and other components inspected for wear.

Don’t let a single price tag drive your decision to rebuild, repair or replace a failing truck or component. Count all the costs and make the right choice.

When warning signs that a major component, an engine, or your entire truck needs serious attention, it often raises a tough question: Should you rebuild, repair or replace it?

You don’t have to settle for an educated guess or a knee-jerk reaction to initial cost. By assessing the truck’s value, examining costs associated with various decisions, and considering other factors, you can methodically arrive at a well-informed choice.

Costs such as $18,000 to $20,000 for an engine overhaul, $5,000 for overhauling the transmission and $3,000 to $4,000 to overhaul the rear end might push you toward purchasing a newer truck. That could be the best decision, but the size of such numbers alone isn’t enough to make that call.

“Maintenance is predictable,” says John Dolce, a maintenance expert and fleet adviser who’s affiliated with Wendel Duchscherer, a technical consulting firm. By the sixth year of ownership, the annual cost of parts and labor often exceeds 30 percent of the vehicle’s value, and that share continues to grow, he says.

Annual maintenance spending on that aging vehicle eventually will top its resale value, according to Dolce’s calculations, based on the performance of fleets he’s worked with. “One year it’s going to go to 150 percent in maintenance as share of value,” he says. That would be the case if you spent $30,000 for an engine overhaul and other major repairs on a truck worth $20,000. “That’s not cost-effective, because you’re not getting the reliability out of that piece of equipment.”

Dolce says the 30 percent maintenance spending could be a marker for deciding the following year whether to replace your vehicle or rebuild it. You’ll have to compare the costs of buying and operating a new or late-model truck with the expense of doing an in-frame engine rebuild that would extend the truck’s life for several more years, he says.

Another benchmark approach is maintenance spending on a cost per mile basis. Bill McClusky, a consultant with owner-operator financial services company ATBS, estimates average maintenance costs of about 10 cents a mile for a used truck of around 500,000 miles or more and 6 cents a mile for a newer vehicle with up to 250,000 miles.

“Exceeding 15 cents per mile in maintenance costs should trigger an evaluation of the major components of the truck,” he says. McClusky says upgrading your vehicle may force you to take on a truck payment or increase an existing one, but it’s wise if it ultimately proves cheaper than what you’re spending on maintenance.

Another potential measuring stick is mileage. At 800,000 or more miles, an engine overhaul could be imminent, especially if your engine starts “sucking oil,” Dolce says. “When you start to use four or five quarts a day or more, that’s telling you that you have wear on the engine. You can continue to do that and all of a sudden you lose oil pressure and blow the engine. You need to find the problem to preserve the core.”

A fluids analysis could indicate whether your truck may have other major maintenance problems down the road. “There’s no sense in investing $18,000 to $20,000 in an engine overhaul if the transmission and differential are close to being worn out,” McClusky says.

Dale Wiederholt, owner-operator of Wiederholt Transport in Hazel Green, Wis., runs eight trucks and shies away from trading them. “Unless it’s got a lot of chronic problems, I’d rather rebuild than replace it,” he says. “Every time you turn a truck over, you have hidden costs and time delays that you can’t generate revenue with.”