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Debunking the myth

By:
  • SIMA
- Posted: September 11, 2017

By Mary Abbott, PhD, RN

Deciding whether to buy a new or used snow plow truck would seem to be a no-brainer. Who doesn’t love that new smell and glistening look of a new truck? Plus, displaying a neat row of shiny new trucks on your website portrays professionalism and reliability. Unfortunately, many contractors must face the reality of budget constraints that limit purchases to used equipment.

Learning to selectively buy used equipment is important for snow contractors working on a tight budget. Like buying a used car, the purchase of a used truck comes with advantages and disadvantages. On the plus side, you avoid the “drive-off-the-lot” depreciation of a new vehicle; incur less debt if financing; and will likely face lower insurance premiums. You may be able to purchase more than one truck, thus increasing capacity and may be able to recover a larger percentage of the purchase price when you resell. On the down side, buying used often means inheriting the problems someone else no longer wanted to pay for and may have neglected to tell you.

OldTruckPlow_Combo (250x155)    UsedTruckNewPlow (250x144)
Old & new: Buying a used truck and plow (left) should be done cautiously and with due diligence. A good compromise on a tight budget could be a used truck and new plow (right).

ROI considerations
Basic return on investment (ROI) analyses should precede the purchasing decision, regardless of whether it’s new or used. Such analyses should include use of best estimate rather than best-case scenarios for more realistic results.

Variables to consider for ROI analysis include the following:

  • Purchase price (plus cost of loan, if applicable)
  • Sales tax and fees
  • Depreciation
  • Maintenance and repair costs
  • Anticipated revenue to be generated per vehicle plus resale value.

A new vehicle should have minimal repair costs but will have higher costs of purchase, sales taxes/fees and depreciation than a used truck. The costliest variable on a new truck is depreciation, which may be up to 20% or more in the first year.

Either option may generate comparable revenues if the used truck is in relatively good condition. If repair costs for the used truck are reasonable, the ROI may actually be higher. Alternatively, ROI may be poor if the used truck requires excessive or expensive repairs leading to extended downtime. Consider the example below for two trucks bought by the same company at the same time, then sold five years after purchase. While the used 2011 model had a lower ROI, the initial investment was significantly lower, making it an attractive option for those on a modest budget.

chart

Before you begin
During the pre-purchase stage, take the time to become familiar with the make, model and type of truck you intend to purchase by reading industry blogs, looking for recalls or simply asking questions of other operators who may have knowledge of the strengths or weaknesses associated with certain vehicles.

Stay within budget and keep a select dollar amount in reserve for potential repairs before or during the snow season to avoid downtime and irate customers. If your company has no in-house mechanic, develop a good relationship with an experienced plow/snow equipment mechanic before purchasing a used truck.

A mechanic’s keen eye

Discussions about whether to purchase a used truck often generate heated controversy among experienced snow plow operators.

If not purchasing a new truck appropriately matched with a new snow plow, some operators will accept the idea of a used truck purchase only if it has never been used as a snow truck to avoid the rust and impact or powertrain damage often associated with such vehicles. Used plows are usually shunned as well, since parts may be missing and wiring harnesses may be damaged or mismatched to the plow or intended truck. As a result, operators who agree to buy a used, non-snow truck may insist on loading it only with a new plow. Others will accept the reality of sometimes having to buy a used truck/plow combo that because the price is irresistible and the cost of potential repairs is acceptable.

If not buying a new truck with matched accessories, most operators would agree that the key to acquiring a good used truck is to have it undergo a pre-purchase exam by a qualified mechanic experienced in the maintenance and repair of snow plow trucks. Transfer cases and transmissions are worked hard during plowing and should be carefully checked, plus a bent vehicle frame or other damage may not be evident until the truck is up on a lift. Trucks used in commercial work should be ¾-ton or larger to ensure they have the front gross axle weight rating (FGAWR) needed to carry the heavier, contractor-grade plows needed for the job. Areas of rust should be evaluated for rust-through or metal fatigue that may pose a safety hazard.

The plows on used trucks should also be assessed carefully:

  • The moldboard should be inspected for rust, cracks or unacceptable modifications.
  • The plow pump fluid should be clean and at the appropriate level for the model of the pump, plus the coils and valves should work as expected.
  • Plow hydraulic cylinders should work smoothly.
  • The lift frame should have no cracks or unexpected bends and the headlights should not rattle. The plow A-frame (quadrant), mount, wiring harness and in-cab controller should all be functional and undamaged, though cosmetic scratches are to be expected.

If any part of the plow is damaged, non-functional or missing, the potential buyer should consult with the mechanic regarding acceptable repair costs after purchase or may request pre-purchase repairs by the seller during the price negotiation process. Determining “acceptable” repair costs is something only the buyer can do, but knowing the difference between replacing a $300 controller and a $1,500 plow pump is important.

The previous owner

Some used plow truck resellers offer limited warranties. Generally, however, most used trucks are sold “as is” and the buyer should consider the selling source. Is it being sold on eBay, Craigslist, by an attentive snow plow operator entering retirement or by a private owner who “is selling it for a friend” and claims not to know anything about the truck? Is it being auctioned by a municipality or state agency where regular maintenance should have been performed and records may be available? Or is it available at an equipment dealer who offers a limited warranty? Ideally, the buyer should take the time to evaluate the truck before purchase and if the seller allows, the buyer should invest in the $100 or so to have a qualified mechanic evaluate it.

Be leery of online photos that show shiny used plow trucks. A brief look at several online reseller sites usually reveal photos that do not match the description of the truck, that is, glossy sheet metal with little or no rust on a commercial truck with salt spreader and 274,000 miles on the odometer.

Final thought
If your current budget prohibits you from purchasing a new truck, buying used should be viewed as an acceptable option if you approach the buying process with awareness of the advantages and disadvantages of such a purchase.

Expanding your company’s capacity and capability by buying a used plow truck helps you provide your customers with the service they need and allows your business to grow. A new truck with a matching new plow may then be in your future.

Mary Abbott, PhD, RN, MSF, is an owner/manager of Mow Beta! Mowing & Snowplowing in central Arkansas. She also is a part-time ICU nurse, nursing instructor and retired Navy veteran. Email her at mowbeta@yahoo.com.

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