EQUIPMENT: REPLACEMENT CYCLES
TIME FOR A NEW TRUCK? Equipment replacement should hinge on thorough fleet, market assessments BY TOM QUIMBY
D
emand for used trucks is climbing along with shipping rates, so now might be a good time to swap out aging trucks for new ones — at least for some fleets. Such decisions are rarely that easy. Plenty of other factors should be considered before signing on the line, such as fuel economy, maintenance costs, warranty expiration, new safety technologies, freight forecasts, truck financing options, driver comfort and fleet depreciation. Dealers are advertising attractive incentives, but it all starts with making thorough assessments and doing the math before racing out to a dealership. But even for some fleets where budget battles rein, new trucks can make a lot of sense. “Whether a company is in financial difficulty or not, if there is a business case that newer equipment will lower the cost of ownership, then a company should upgrade their equipment when possible,” said Brent Rottweiler, vice president of remarketing for Volvo Trucks North America. “If a new truck purchase is not an option, companies should look into upfitting their existing fleets with cost-saving items such as telematics, aerodynamic trailer and
“The transportation industry can be difficult to predict six months or more out, especially now,” said Don Nash, territory manager for Ritchie Bros. “COVID-19 has certainly put an exclamation point behind that for the industry. The positive trend we are enjoying now is conditioned on multiple pressures within manufacturing, supply chain, logistics and even employment levels.”
exterior truck upgrades, etc.” Vehicle depreciation, traditionally the biggest cost fleets bear within a few short years after acquiring new equipment, is a big factor in determining when to pull the trigger on a trade-in. “Customers should make sure they properly depreciate their equipment so they are less likely to be in a negative equity position at the time of trade-in,” Rottweiler said. Ron Long, executive vice president of sales and marketing for Premier Truck Group, said duty cycle and equipment depreciation play key roles in knowing when to say “yes” to new trucks.
“If you don’t put a lot of miles on a truck, you may be more inclined to keep that truck longer,” Long said. “But the other thing is where that truck is in its depreciation and how that fleet chooses to depreciate the lifespan of their trucks, because we see an aversion to trading when there’s a perceived loss on sale, and we see customers more willing to trade when they’re in an equity position.” Used truck values also come into play, and demand has been high lately. “That fluctuation in the strength of the used truck market obviously can have a big impact,” Long said. “Being able to take advantage when the used
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