Used but Useful
Even with higher numbers on the odometer and the price tag, used trucks can be a smart buy for a growing business
When owner-operators Ben and Melanie Easters, who are leased to Panther II Logistics, buy a truck for their fledgling fleet of three expeditors, they usually buy used. Ben says the reason is simple: “We pay our drivers a little bit more than the average, which we can afford to do because we don’t have big truck payments.”
Lower payments and immediate availability are two big reasons why owner-operators looking to expand often choose used trucks over new. However, as trucking demand heats up and the used truck glut of 2001 becomes a distant memory, used truck buyers are finding a dearth of 3- to 4-year-old power units with owner-operator specs and low mileage. Prices have risen, too.
“There’s a shortage of used trucks in certain models,” says Eddie Walker, president of the Used Truck Association and owner of Eddie Walker’s Best Used Trucks in Fort Worth, Texas. “Lower mileage used to be 200,000 miles and down; then it got to 500,000 miles and down. Now it’s 600,000 miles and down. And there’s getting to be a shortage of those.”
The average mileage on used trucks has gone up because of fewer bankruptcies among small fleets, and because owner-operators and larger carriers are hanging onto their trucks longer. Lee Wallace, senior vice president of sales and marketing for Arrow Truck Sales, warns buyers to be flexible about mileage expectations in a used truck. “The average Class 8 used truck that Arrow sells has increased in mileage by over 70,000 miles over the past 24 months. Used trucks with 600,000 miles and above are readily available.”
Trucks under 500,000 with good specifications are scarce, he says.
This is true for both highway tractors and daycabs, says Peterbilt Assistant General Manager Scott Pearson. “Daycabs are the hottest units on the used market, but so are medium-duty units. Those trucks just don’t sit very long once they come back in on trade.”
Of course, some buyers have the option of paying the premium for new equipment. Doing so enables them to avoid the used truck drawbacks of more breakdowns, higher maintenance and operating costs, lack of appeal to drivers and, in some cases, no warranty.
But the nimble owner-operator looking to make a quick response to a shipping opportunity in this hot freight environment can’t always wait for a new truck. Given the backlog of orders at some truck manufacturers, thanks in part to delays with their component suppliers, adding a new rig can take as long as nine months for an owner-operator.
Bobby Wolford, who owns a 20-truck fleet, Bobby Wolford Trucking in Woodinville, Wash., says lead time was a big factor when he bought his most recent truck. Wolford actually bought six used Kenworth T800s, all spec’d for severe duty, knowing that the price was so good he’d turn a profit reselling five of them.
Price was also a major factor in his decision not to buy new. “New trucks are so expensive,” Wolford says. “A new truck with this spec would have cost me $165,000. All of these were less than $50,000 each.”
Having equipment that’s paid for is a big advantage for small carriers, who often need to avoid further strain on their cash flow. Wolford says he can pay cash for used equipment. “I have equity, and I can put them to work right away,” Wolford says.
Typically, fleet trade cycles have fed low-mileage trucks to used dealers and auctions, but many carriers have kept their trucks past traditional three- and four-year trade cycles to avoid the 2002 engines or to save money.