Pros and cons of new trucks versus used trucks

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Hey guys, Justine with Ready Business Systems. Today, I’m going to be running over the pros and cons of new vehicles versus used vehicles for your company, yourself, and your self-vehicle. So, in my opinion, there is no right or wrong for new versus used. It just depends on what is important too, so, and on my personal experience, I grew up, I always had an old car. My dad had an old car. My brother had an old car. My brother-in-law had an old car. And I don’t really know anything other than that. You go out, you buy it in cash and you can fix it up. I grew up pretty handy. I know how to fix vehicles. So, I start my landscaping company and I did the same thing. I got used trucks. The advantage to used trucks is obviously, you don’t need to get the financing. There’s definitely the cost of throughout the lifetime of the vehicle is probably about half the cost of buying a brand new vehicle, so you save a lot of money, but the con is that it’s stressful. For me, I have all these used vehicles and they are always breaking. Having surprising bills, one time I had this GMC Diesel Sedan Year 2003, for those of you that know your vehicles and the injectors that is a common problem with these vehicles, which I’ve learned later. You should google a vehicle before you buy that specific year-make model. So, if you do buy, you need to make sure that you researched the vehicle because if you searched all the problems that vehicle, you’ll come up with fuel injectors is a common issue. Anyhow, you know we need to bring it, for one year, we used to spend four- grand to get new fuel injectors. I didn’t have a plan on it. I didn’t know what’s going to happen. The vehicles then are out of service. So, if you do used vehicles, you definitely need to have a surplus, so, you can just not worry about that one. Set it aside and use the other ones. So, anyway, running a business is very stressful. You have your employees. You have to manage the money. And then, stuff pricks all the time. So, it’s a very stressful business. And what I came to realize was that I— you know–, if you finance a new vehicle, you know that’s going to be more expensive. It can be like seven hundred dollars a month. If you finance a pretty new vehicle, maybe one like fifty thousand miles with less on it. It still going to be a kind of a hipper between the two and if you finance a vehicle, especially, a brand new, you get the warranty with it. So, the reason why you like to buy the brand new truck nowadays is, it is because; a.) it gives you better cash flow. So, if you’re spending seven hundred dollars a month, it’s not going to cost you. You probably going to have trouble getting a decent used truck for under ten grand. You’re going to spend fewer payments a year. So, you’re going to fix your cash flow for getting a new vehicle. Also, it’s under warranty. If anything breaks, you have that peace of mind that for five years that they’re going to take care of it. You don’t have to worry about downtime for your cruise. So, your truck is always going to be up and running. I’m not going to say that always, always, but most and more frequently, they’re not going to be broken down. And then, obviously, your cost is in effect. You know you’re going to pay seven hundred bucks a month, for example, that’s what you’re going to pay. You’re not going to get a surprise four thousand dollar bills that make you. It smooths everything out when it terms of your cash flow. So, again, I don’t think there is a right or wrong answer. I think, when you’re small, you only have one truck, maybe it is easier to have a used truck because it breaks down at your own time. When mine will breakdown, I remember another example was the brake lines went my crew tried to set out in the morning. At this point, I had five crews. We’re working at dirt late. I couldn’t find a good mechanic because we had no garage. No one wants to work from that work environment and in the morning, I ended up being me doing most of the mechanical work. Break lines were out, I had three guys waiting on me to get the truck out and that’s money out the door because obviously, they are not productive. It messed up the schedule, very stressful. So, for me, for quality of life, I prefer to have new vehicles because you know what to expect. In one word of advice on a share with you, there’s a great program through NALP called “Trailways of Program”. They give you, basically, a free consult that you can either visit for the day or they’ll come to visit you for a day and work with you with a much bigger established company. It doesn’t cost you anything besides your NALP membership fee, which is very affordable. So, my point is that I met with this guy, a big company, and I start talking about my problems with the equipment and he said, “Why don’t you get a new truck?” I was like, “What do you mean?” He said, “Yeah, you can get a new truck.” And I was like, “I don’t think I can afford a truck. I don’t think I can get financing.” So, oh yeah, they sell new trucks. So, that word of advice stuck with me and that led me to my decision to buy new vehicles because they will, no matter how bad your credits or no credit, you can buy a truck. You might be a little bit extra on your rates for financing, but those will sell you a truck. The only thing is that there is pressure obviously, as you build these overhead expenses for truck payment, you’re going to have to afford it. So, it’s going to put a little bit of pressure on you giving you that seven hundred dollars of payment a month, but guess what, you better be working. So you’ll wait a little bit before you commit to having a monthly payment, but if your company is already established and you have cash that comes in. You can have seven hundred dollars a month. You know you’re going to have it, then my opinion is, in getting new vehicles, you know what to expect, you know your expenses. Even though it’s a premium. Not to keep going on about it, but if you think to pay your cost for a year and per crew, for us, it will be put there in our pricing overhead worksheet. And not to be about fifty cents to a dollar an hour, the payment for that truck. So, if you’re normally charging fifty dollars an hour, you need to charge fifty-one, you can drive a brand new truck. So, depending on how many hours you work a year, but if you work roughly ten thousand hours a year and you’re charging fifty-one dollars an hour instead of fifty, that’s ten thousand dollars and that should be the truck payment. Now, another thing to keep in mind is that the insurance is going to cost more than the truck because of its taxes. So, it’s definitely a luxury for a new truck, but in my opinion, you have so much to worry about in your business that you shouldn’t have to worry about stuff breaking. I’d rather have just a money problem in terms of truck payment than a money and equipment breaking problem because that’s what ends with having used equipment. So, that’s my thoughts. Used versus new, obviously, there’s no right or wrong way to do it. It is a matter of your lifestyle choice and how much stressed out. So, one thing I mentioned in the beginning of the video, I forgot to cover was, personal vehicles and sale vehicles, in my opinion, they’re not as important. In personal vehicles, you see a lot of guys go out and buy a brand new truck; if that’s what’s important in your life. Lifestyle and nice truck, making you look like you’re successful, then that’s great. But if you want to actually be successful, you should wait to buy that brand new vehicle for yourself. You don’t need that brand new vehicle; it’s not producing money. Your sale vehicles, more or less, it looks decent. If it breaks down, you’re probably okay. Your charts out there doing work, producing money. In my opinion, that is your business, those trucks, they are the ones sharing the money with half of something running or making any money. In my opinion, those trucks are essential and it is worthy of paying a premium to have them. So, well that’s my take, any questions, comments, post them below. Check out the website, and I’ll catch you guys next time.

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