Temptation is defined as the desire to perform an action that one may enjoy immediately, or in the short term, but will probably later regret for various reasons. The temptation can be strong to keep rebuilding your truck. It definitely has advantages in the short term, but if you are sticking with a career in the trucking industry for the long haul, it may not be worth the cost to keep rebuilding. Here are some tips you can use to analyze whether or not it's time to invest in a new truck.

1. Maintenance - How much are you spending in maintenance for your current truck? If you are spending more than .13-.14 cents per mile, then you are spending too much on a truck with too many problems. In the example below, the driver would have saved $100 a month if he bought a new truck and increased the cost of his truck payment, but lowered the cost of maintenance. 

Payment and Maintenance Cost Analysis
  USED TRUCK NEW TRUCK
Payment $1500/month $2500/month
Maintenance $.15/mile ($1650 total) $.05/mile ($550 total)
TOTAL $3150 $3050
*Based on driving 11,000 miles/month
 
2. Longevity - How long do you plan to stay in the industry? If you don’t plan to stay in the industry much longer but are still turning up a decent profit on a truck with high maintenance, then it’s probably not worth it for you to buy a new truck. If you have 5+ more years down the road and you own a truck with high maintenance cost, you might want to think again and make the investment.
 
3.  Regulations - CARB truck and bus regulation is going to cost at least $16,000-$18,000 to install the emission compliance filter if you drive in California and have an engine made before 2010. Buying a truck with a compliant engine could cost you less overall and you get all of the perks that come along with driving a new ride. (Click here for more information on the CARB regulation.) Keep an eye out for regulations like CARB that are extremely costly and force you to upgrade sooner than you planned for. 

Still tempted to keep rebuilding? ATBS Business Consultants (www.atbsshow.com) can give expert advice and help you create your own payment and maintenance cost analysis to determine when it is beneficial for you to upgrade your truck.

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I could not be more of test model if I were to pick one. I choose to re power my 03 770. A mistake? Only time will tell, 300k now on engine and trans. Lasts years maint and repairs out of control items fixed only broke again or was tied to something that should have been addressed. 21k in expenses, still cheaper than payments and increase in insurance but no room for bragging.

This year those big ticket item repairs are behind me and so is the shop that I just had enough with. In my expieence, it's all in shop! When I bring it in I want them to look for potential problems, calling a road side service after the fact is why my costs last year were extreme.

An older truck will cause problems, staying in front of them is so much less expensive. I prepare , time and $, so the unexpected really no longer upsets me.
I want a new (er) truck someday but not now. I cannot say either way what I would do again, ask me in another 500 k that's when I will have all of the numbers.

The last 6 months have been my best in revenue, and my lowest in repairs, thus a strong correlation with shop time and earning potential, may the good times continue.

October 14, 2012 12:28:25 PM

To Michael Gully:
Hi Mike, great comments and questions. While maintenance costs are a important factor to consider when determining when to buy a new truck, there are other factors to consider. A truck that is paid for is a definite bonus when making a case to keep the truck vs buying new. In the chart calculations above we are using 15 cents per mile as a kind of break point for maintenance costs , but as Henry points out you are not just paying the repair bill. In addition to the repair bill you are also losing an opportunity to generate revenue. If your truck is in the shop one week out of a month then you could experience a 25% loss of revenue for that month which could result in as much as $ 3500.00. Now that $1500.00 repair bill has cost you $5,000.00. When helping a driver evaluate whether to keep his truck or trade for new I always recommend having an engine health dynotest performed to determine the condition of the engine. I also recommend having fluid analysis performed on all the major components. Another factor to consider is current and pending emission control regulations. Always consider the condition of the rest of the truck. Electrical problems can be very labor intensive repairs, again costing you in downtime and high repair bills. In conclusion, there are many factors to consider when evaluating if it is time to trade for new. High maintenance cost is the "Red Flag" telling you it's time to make the evaluation.

September 11, 2012 14:13:30 PM

Michael - Bill has been out of the office. He will respond to you as soon as possible. Thanks for your post and come back soon for a response from Bill!

September 10, 2012 16:19:47 PM

I have been hoping you would respond to my question and comments....

September 09, 2012 23:33:21 PM

If proper regular maintenance is performed at the correct intervals, breakdowns should be fewer. My 1999 Freightliner Classic rarely breaks down. Yes, I'm going to replace things that wear out before most people would trade the truck in, but it's still cheaper than what a new truck (spec'd my way) would cost. It makes no sense to me to get rid of a truck that is paid for and gets better than 8 mpg.

August 31, 2012 14:07:18 PM

I never been an owner operator before, but it sounds more practical to buy newer than to keep going to the shop. Great advice

August 26, 2012 16:23:43 PM

I agree in part with what you say. But the difficulty my company has that Freightilner made some changes that got Gully out of its trade cycle. Your annalogy looks great. But how do you apply that to a truck that is both paid for and long depreciated out. A complete re powered rebuild can be done for $40,000 which is a 1/3 the price of a new truck. While I miss buying new trucks how do I justify it. With .0 per mile payment or depreciation even with a higher per mile maintenacne I figure lower cost per mile than with a new truck depreciation and maintenance. And no arguement the maintenance cost on a new truck to 500,000 per mile is very miminal....adn the Cascadia is a great truck....all the way until you tilt the hood...It is more time consuming to work on than and FLD...adn time is money.

August 16, 2012 18:14:25 PM

It is easy to get stuck in a rut which we were in trying to decide when to buy the next truck. The present truck was hurting us with many repairs each month, stress of not knowing if the truck was going to break down under a load, and then trying to justify a truck payment. It took putting pen to paper before it all made sense and we made the jump to our new truck. What a relief that was in many ways. Being able to sleep while Bob was driving and now worrying that every time the truck slowed down something was wrong...

August 11, 2012 3:59:19 AM

The other thing to remember is how well you can serve your customers as you can only serve them properly if your truck is up and running. I have a saying on this subject... (you can only be as good as the horse your riding). It also cuts into your profit two ways when your in the shop . Your paying a shop bill and you are not generating income. This is a great post for owner operators and small fleets to read.

July 31, 2012 17:26:45 PM

Great advice! I think weighing future advantage against the present benefit or loss is imperative. So often, we can be shortsighted and fail to have a long term plan.

July 26, 2012 11:44:31 AM

Excellent article!

July 26, 2012 10:26:16 AM

As a Business Consultant with ATBS, this is one of the most highly discussed topics I have with my clients... It is a MUST READ article!!!!

July 26, 2012 9:41:43 AM

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About Bill McClusky

I have been in the trucking and construction equipment service industry for 23 years as a service technician, component rebuild specialist (engine, transmission, and axle), service department manager, instructor and consultant. I was a class 8 truck driver for 3 years pulling wet and dry tanks. I have been with American Truck Business Services for 4 years serving as a Business Consultant, Maintenance Consultant, and Instructor.

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