A well-maintained exterior helps build your reputation for good maintenance practices.
David Conannon of Liberal, Kan., is cleaning out his cattle trailer at the T/A at Exit 76 on I-20/59 in Cottondale, Ala. Conannon has been driving for upward of 20 years, but as an owner-operator he’s only had to sell one truck, a 2002 Peterbilt 379 he was trying to get out of before signing on with a small fleet.
“I never had any problem selling that truck,” he says. “I always had people telling me, ‘If you ever want to sell this truck you call me.’ I sold it to a buddy of mine down in Florida.”
The reason? “If you keep it looking good,” says Conannon, “people will take notice.”
Maintaining your truck’s appearance is one example of the main principle in maximizing resale value: Preparing a truck for sale begins as soon as you aquire it. Fleets know this, and that’s one reason they keep detailed maintenance records for each of their trucks. Owner-operators who buy from dealers of used fleet trucks have the benefit of knowing exactly where the engine and associated parts are in their lifespan.
Tim Gordon, Manager of SelecTrucks of Birmingham, says, “Anytime anybody’s got a copy of all the things that have been put into the truck, that goes a long way to getting it to the next owner.”
That means keeping up with maintenance tasks: changing oil at proper intervals, repairing small dings, fixing tire and alignment problems, and regularly changing transmission and differential fluids.
Preparing for the day of sale also means establishing a history of oil analyses done at regular intervals. An analysis for viscosity, combined with acid- or base-number tests for remaining additives, can help you better tailor your scheduled changes to your particular operation. Consult the engine and oil manufacturers before lengthening or shortening miles between changes, though.
Testing for the presence of metals and other contaminants in the oil also can cue you into how your engine is wearing to help you to spot problems before they become catastrophes.
Such records will make all the difference, says Used Truck Association President Eddie Walker. “If a guy can come to a dealer and say, ‘Hey man, I got all my oil sample results – here they are right here,’ the truck might then qualify for any kind of used-truck warranties that the dealer gives. They almost make that decision right there with only oil samples.” A dealer’s willingness to attach aftermarket warranties translates to more money for both of you.
Keep the other small stuff, too, including the oil change records or receipts, and be as specific as possible. Ronnie Jordan, owner of Jordan Truck Sales in Carrollton, Ga., says that when an owner-operator talks about overhauling his engine, Jordan always wants specifics. Did you do the rods? The mains? Was the overhaul in-frame or out? What else is new?
“Buyers like to see consistency,” Walker says. “Keep a good diary,” Your rig doesn’t need to look like a show truck to make an impression. “But if you clean it up – you’ve got it shined up when you take it in to the dealer to trade it in – they’ll give you a little more money,” says Houston-based owner-operator Danny Cochran, who’s leased to Billings, Mont.-based Waggoners Trucking and hauls cars mostly between his hometown and the Spartanburg, S.C., BMW plant.
Cochran doesn’t outfit his trucks with much in the way of “emotional purchases,” as Terry Williams, managing editor of the Truck Blue Book, calls big chrome packages, stripe kits and other aftermarket filigree. But Cochran says he’s gotten a fair shake on most of the sales he’s made in his 30 years of trucking, the majority of that time spent as an owner-operator. “Most of the time a real sharp sales manager at the dealership can walk out there and just look at the truck and tell whether you kept it up,” he says.
Williams says the Blue Book doesn’t try to put a value on the nonessential accessories and detailing because their value depends so heavily on the taste of the buyer. Some buyers want the bare bones of a dependable truck, while others would “pay $5,000 for that $1,500 worth in chrome,” he says.
Dealers are well aware of all this. When Jordan aquires a truck, his maintenance team will check it for wobbles and bounces. They’ll test the lights, wipers and other small components. The lead man in the shop will inspect the engine, Jordan says. “Then our shop foreman will drive the truck.”
After all mechanical problems are fixed, the vehicle will be test-driven again. “Then it’s given to our 15-man detail shop. They wash, wax, buff and polish. They clean the interior.” They even put in fitted sheets, matching the interior color, and sometimes add chrome and stripe packages.
“We want to make every truck we sell something that would be appealing to us,” he says.
Consider that as a rule of thumb the next time you’re looking to sell or trade.
FINDING THE RIGHT SALES PRICE
Figuring fair market value for your equipment is an inexact science, to say the least. The Truck Blue Book can be a good source for base points of comparison. Then take into consideration how your truck is spec’d.
Owner-operator Danny Cochran determined a fair value of the 1994 International tractor he sold to a friend in 1997 by researching dealers and getting quotes on similar units. “I just reduced the price a bit for him,” Cochran says, adding that building a relationship with your buyer helps when you’re working with a dealer, too. “They get to know you and know your practices and they’ll deal with you,” he says.
Rod McKelvey, sales rep for Freightliner of Des Moines, Iowa, seconds that notion. “It’s easier for us to sell the truck if we can tell the next guy, ‘We sold the truck the first time, we know the owner,'” he says.
Cochran and McKelvey suggest that if you’re trading in on a new truck and you’re happy with your brand, you might yield more by trading to a dealer for that same brand who sells used equipment, too.
Cochran has upward of 660,000 miles on his 2002 Peterbilt 379 and hopes to get a million out of it. He says he likely will trade this one, though he’s sold direct to other owner-operators in the past. “You might get $10,000 or $15,000 more that way,” he says, “but then if you’ve depreciated it out, you’ve got to think about the tax man.”
From a tax standpoint, selling outright is tricky if you’re in the middle or past the end of your depreciation schedule – if the sale exceeds the truck’s depreciable base, a 25 percent tax rate applies to the difference, a gain that’s referred to as a “recapture of depreciation, not a capital gain,” says owner-operator financial consultant Kevin Rutherford. For example, if you’ve had the truck more than three years and it’s depreciated out, a $40,000 sale will result in a $10,000 tax bill (25 percent of $40,000). Before selling, check with your accountant so you know what to expect.
Rigfinder: www.rigfinder.com($19.99 listing fee), (317) 570-5436
(402) 697-8777 ($49 one-time fee for individuals)
Truck Trader: www.trucktraderonline.com ($27 to $35, including print ad)
Truck Blue Book: www.pricedigests.com, (800) 654-6776
CHOOSING A LAB FOR ANALYSIS
Engine manufacturers have varying arrangements for oil analysis.
Caterpillar has its own SOS Oil Analysis program. Detroit Diesel’s POWER Trac program utilizes independent Staveley Services Fluids Analysis, which has been in business 40 years. Cummins points customers to Polaris Laboratories in Indianapolis, and Volvo recommends any reputable lab that includes base levels and soot in their measurements.
There are more than 200 independent labs to choose from in North America. For more info, consult The American Association for Laboratory Accreditation, a lab certifying organization, at this site or (301) 644-3248.
Among owner-operators who regularly use oil or fluid analysis, anticipating maintenance issues is by far the main concern.