Buying a semi-truck, whether you are buying it for yourself in the jump from company driver to owner-operator, or for an employee as you jump from owner-operator to fleet owner, will be one of the biggest decisions anyone makes in their trucking career. It is not a decision to be taken lightly. It costs money to be uninformed. Follow these guidelines when deciding on a truck to buy and you can save yourself many headaches in the future.
Buying New Versus Buying Used
When adding a semi-truck to your business, one of the first decisions you need to make is whether or not you want to get a truck new or simply new-to-you. Both have their advantages and disadvantages.
The strongest argument in favor of buying new is the maintenance. New semi-trucks have fresh components that are almost certain to go a very far distance before needing critical attention, and if they do, they tend to be covered by the manufacturer’s warranty, something that used vehicles may not have depending on how long they have been on the road or any modifications made to them.
Another benefit is various technological advancements made to the components in the truck. As a simple, easy to understand example, a newer truck cabin is much more likely to have USB charging ports for your phone. This concept applies across all aspects of the truck, including engine efficiency and not needing to retrofit the truck with current DOT and FMCSA standards such as the ELD Mandate.
Buying a new semi-truck has a glaring problem: the cost and depreciation. For standard automobiles, simply the act of buying a new car shaves 9% off of its resale price, even before the new owner puts his keys in the ignition. The rate for Semi-Trucks is almost certainly comparable. If you purchase a new big rig for $120,000 then your signature on the dotted line makes you $10,800 poorer.
Used semi-trucks and other commercial vehicles tend to have the opposite benefits and costs of new trucks. You will spend less on the initial purchase and they tend to hold their value for longer. At the same time, you must prepare to spend more on maintenance and replacements, as well as retrofitting the truck to meet 2020 standards.
If neither of these options sounds appealing to you, you can always consider leasing a semi-truck instead. Generally with a lease, you pay for use of the semi-truck as you depreciate it, but you should always read the leasing contract because no two lease agreements are created equal. Understand the duration of the lease, the cancellation fees (if any), if there is an option to purchase the semi-truck after the lease expires, and who pays for maintenance of the truck.
Consider the Selling Party
Meet with and talk to the person you are planning to buy a truck from in person if you can. Meeting with them in the flesh can help you get a better read on them and the reason for their selling. Is the person a salesman that makes a commission, or a retired trucker who wants to pass on his legacy? Getting a feel for how much “slime” a person gives off can make you think twice about how they advertise the truck and keep you from getting a raw deal.
One trick to help gauge the selling party’s level of genuineness is to grill them about specifics of the truck. If they are telling the truth, they will not need to remember anything. If you spot a contradiction between the listing and the person, that may not be a dealbreaker, but it may raise a red flag.
Determine Your Goal in Advance & Stick With It
Buying a semi-truck is a lot like going into a casino. The best strategy of actually coming out without an empty bank account: set defined rules for yourself and do not let the irrational part of your brain take control. Before you even look at a truck, have answers for the following:
- New, used, or lease?
- Am I driving the truck, or will an employee?
- Is there room for a pet or teammate if I plan to have one with me?
- Will the truck have a dedicated route to drive over and over, or will it travel various routes?
- How often will the truck travel uphill and downhill?
- Will the truck travel on jobs long enough to warrant a sleeper cabin, or will it run day jobs?
- What type of material will the truck haul, and what engine in horsepower and torque is needed to accomplish this?
- How much should the truck itself weigh so that its Gross Vehicle Weight Rating never exceeds regulations?
- If financing, what is my maximum down payment? If not, what is my max purchase price for a truck?
When shopping for a semi-truck, it is very easy to get distracted by bells and whistles that convince you to pay more but do not help with revenue. Setting your criteria in advance can help fight the urge to go for bigger and better, especially when it is outside of your financial viability.
Knowledge is power. When buying a semi-truck and making the jump from company driver to owner-operator to fleet manager, knowing what you want and what you need in a truck to get it can save you a lot of distress in the future.
Additionally, it helps to research your truck brands. There are various truck brands sold in the United States, including:
If you are considering advancing in your trucking career and desire financing to get the truck you need, TopMark Funding can help. We work with over two dozen brokers to get you the best financing deal possible. What’s more, we do not do a hard credit check to pre-approve you for a loan or lease, keeping your credit score in top condition. If this interests you, read on to learn more about us.
CHECK OUT THESE OTHER GREAT TRUCKING ARTICLES
- Mack Trucks to Reenter Medium-Duty Market
- How to Grow Your Trucking Company
- Trucking in 2020 and Beyond
- Benefits of Leasing a Semi-Truck
ABOUT TOPMARK FUNDING
TopMark Funding is a top-rated semi-truck financing and equipment financing company located in Roseville, CA. We specialize in commercial trucking and heavy equipment. Our mission is to become your long-term financial partner by helping you grow your trucking business and fleet.
We’re not here for the short-term, we’re on the long-haul with you!
Learn more about: Semi-Truck Financing
Fill out the contact form or give us a call at (866) 627-6644. One of our truck financing specialists will contact you as soon as possible to go over your truck lease needs and learn more about you and your business financing goals.