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Truck Financing
Making you way through the truck purchase maze

Craig D. Sciara

Are you sure it is time to replace your current truck? Have you put serious thought into it, or has the "newer truck bug" bitten you? Boy, I hate when that happens. That "bug" has never caused me to purchase a truck, but I have replaced a perfectly good car with a new one. I know what you're thinking "A car is not a truck and it won't happen to me." Well, think again. Emotional decisions can, and do, play a large role in any decision you might make. The challenge is to reduce the role of your emotions and that should help keep that "bug" in check. So, do you really need a newer truck?

Before you actually dispose of your unit, look at what caused you to decide that the time has come to part with your truck. Are repairs and maintenance costs eating up all your profits? Is your current unit no longer under warranty? Is the truck you have not equipped to do the job efficiently? Once you identify the reason for replacing your truck, you need to do some work to test your theory.

Maintenance and repairs are big concerns that can have a huge impact on your profitability. You can plan for scheduled maintenance, but unscheduled repairs and breakdowns hurt productivity and your bank account. How much are you spending monthly to maintain your current truck? Always keep tabs on these amounts, comparing them against previous months, quarters, and years.

Once these costs get high enough, repair dollars coupled with your current truck payment, might be considerably less than a truck payment on a newer unit.

Warranty (or the lack of) is an important issue. Operating a truck without warranty coverage may seem too risky for some, while other more mechanically inclined owner-operators are completely comfortable without a warranty. If you are contemplating trading your truck for a late model used unit with warranty, be careful! Most of us hear warranty and think all will be fine and there is no need to worry. Be sure to get a copy of the warranty and read it carefully, because a lot of these warranties do not cover some of the most common failures. If you are committed to replacing your truck, look for warranties from the original component manufacturers, and consider extended warranties on new units.

But don't let a warranty give you a false sense of security. Even new trucks occasionally need major work. Even if the repairs are covered, the downtime involved has put many owner-operators out of business. And if you're shopping for a new truck, ask the dealer what happens if repairs require extensive downtime. Will they give you a loaner, or put you in a lease truck? Don't hesitate to ask.

Is your truck equipped to do the job? Maybe you changed leases and the application changed in the process. Perhaps that truck you bought two years ago was great for a dry van haul, but now you haul heavy equipment. Or worse yet, maybe you bought a poorly-equipped truck to begin with and you are finding out the importance of having the proper truck for the job at hand. Trucks tend to be generic, but on the same hand, there is a lot of specialization out there. It might make more sense to find the right application to fit your current truck instead of replacing your truck to fit your current application. You need to take a hard look at your current situation - which one will cost you more money?

Efficiency is probably the greatest daily expense. Likewise, fuel economy is another issue that can cause an owner-operator to get rid of his or her current truck. If your truck is not operating efficiently, you get that constant reminder every time you pull up to the pump. Efficiency doesn't just happen; it takes work. If your current unit is not efficient, take a look at your habits. Are you performing preventative maintenance at the proper intervals? Is the truck being operated according to the recommendations specified by the manufacturer? Something as simple as improper tire inflation can affect fuel economy. A new or newer truck won't perform to the best of its ability without care.

Preparation is paramount in the truck-buying process, and making a determination about your current unit is extremely important. You need to carefully analyze these issues and apply them to your situation. Don't assume your unit is not adequate or that it is performing poorly without checking the numbers. Hindsight is always 20/20 and buyer's remorse can be a costly pill to swallow. In some cases it may make more business sense to keep operating your current truck. Be proactive and manage your truck. You can greatly extend your trade cycle and save money in the process. LL