When shopping for a pre-owned heavy- or medium-duty truck, you’ll find plenty of one-year warranty offers. Offering a one-year warranty is fairly standard with the purchase of a pre-owned truck. But International® Used Truck is now offering something unique on qualifying purchases of ISX- and N13-powered pre-owned trucks. It’s a two-year warranty, plus a $2,000 card for preventative maintenance (PM). This offer is only available at any one of 15 International® Used Truck Centers. And this offer ends soon, so summertime just became a better time to buy.
Beyond the $2,000 PM card and two-year warranty offer from International, there’s something more that makes this deal tick: the engines.
International Used Trucks gives you the option of shopping for a 2014–2016 ProStar® or TranStar® with one of two engines: the Cummins® ISX or the Navistar® N13 diesel.
Both engines are rated at 450 hp with multiple torque output. The ISX gives you 1,550/1,750 for the 14.9 liter, and the N13 gives you 1,550/1,700 for the 12.4 liter. There’s only a 50 lb-ft difference between the two engines.
Giving you the choice of an ISX- or N13-powered engine in a ProStar or TranStar is a great start. That means a lot to small-business owner/operators.
Your truck is your livelihood. As a heavy-duty owner/operator, you probably drive loads of up to 44,000 pounds more than 125,000 miles per year. And if you’ve got a lot of miles on your current rig, you’re probably wondering when your old-truck luck will run out. Upgrading to a new pre-owned with a two-year promise of worry-free maintenance sounds like one heck of a deal that is worth serious consideration.
Of course, every deal has to have some limitations, so here are three things to keep in mind when shopping at a participating International dealer:
This sales promotion is right on the money for owners who run a one- or two-truck fleet. After all, as a small-business owner, you probably only have enough capital to buy one truck at a time. And when you do buy, it’s like you’re betting the farm on one vehicle.
You’d like to purchase a brand-spanking new truck. But face it, not everyone has the dough to buy new. So when you think about this deal from International — and add in the two-year engine and aftertreatment warranty, along with the $2,000 card that’s good for two years of preventative maintenance — it feels as though you’re getting something new.
The real deal is the additional peace of mind you’ll get when you hit the road with a powerful ISX or N13 engine, plus the two-year warranty and $2,000 in the PM package. Hey, you deserve two years of worry-free trucking, right?
Check it out for yourself. This offer is only available at any one of 15 International® Used Truck Centers. Call 888-780-3927 for details. This is a limited time offer.
Buying a used Class 8 truck or other commercial rig is a smart way for owner-operators to save money in the early days of their business. While newer models are great for mileage and compliance, they often carry the unfortunate downside of a six-figure price tag. Your truck is the most important investment you’ll make in your business, so it’s wise to approach a used truck dealer with key considerations in mind. Here’s how to buy a good used semi truck that doesn’t break your wallet, or break down on the job.
Owner operators can debate all day on which companies produce the best semi trucks. While the brand is up to you, here are a few rules of thumb:
It may be tempting to throw in your money for the most powerful and best looking rig you can find, but weigh the cost of the individual components against one another first. With a used truck, there’s a slim chance everything will be in excellent working condition, so be prepared to pick your battles. For example, a truck with worn-out brakes or balding tires is a far better investment than a rig with a run-down engine. The latter may look nice upfront, but engine repair is going to be way more expensive than brake pad replacement once the title is in your name.
In addition, your truck is going to be with you a long time, so it’s important to not only find a truck that you want, but one that you need. The type of semi you select can hinge on a number of personal decisions, from the availability of parts in your area, to the distance you’ll be traveling, to the degree of comfort you require in your cab.
Most operators learned to drive on a truck with a manual transmission. A manual transmission is more convenient for the driver, but there are automatic transmission semi trucks available. If you’re in the small category of people who have learned on an automatic, you will want to stick with that kind of transmission.
If you opt for a manual transmission, there are more variables to consider. Find out how many speeds the transmission offers. The higher the speed, the more versatility you’ll have when driving. If you’re new to driving a semi truck, you may not want to choose a higher number of gears. The options afforded by the higher speed count is nice, but it can be difficult to operate if you’re not used to a lower-speed transmission already. Also, unless you’re hauling very heavy loads through the mountains, you probably won’t need the higher speeds.
If you’re doing long hauls, you’ll want a truck with a sleeper cab. The money you’ll save in hotels as well as the added comfort of a sleeping space will be well worth the extra expenditure. If you’re doing primarily short hauls, consider a day cab. The potential savings of a day cab, combined with the improved gas mileage, is enough to give it merit.
A single axle configuration may be all that you need, especially if you’re hauling lighter loads over shorter distances. But for long hauls and heavy loads, expect a smoother ride with tandem axle. A tandem axle configuration will ensure that you are meeting safety standards as well as saving your back from strain.
A style that’s becoming increasingly popular is the “6×2” configuration, or the “dead axle tandem.” There are three axles, tandem style, each with single wheels. Only one of the rear axles is driven, with the other being “dead.” It’s becoming widely accepted that the 6×2 configuration can improve fuel economy, but additionally, many drivers report reductions in weight and maintenance costs, and increased stability. However, tire traction may be lower, so think again about what you’ll be hauling and over what terrain.
When scoping out the engine, use a critical eye, and remember the devil’s in the details — little things can often signify larger problems. First, consider the mileage, because the longevity of your engine depends upon this. If the odometer reads 800,000, know that you could still get 500,000 miles out of it. If it’s tipping toward seven figures, the purchase may only be worthwhile if you’re looking to use the rig for the short term.
During your test drive, step out of the cab and listen to the engine. Ask about anything you hear that seems out of the ordinary. Eye the exhaust for smoke after the engine has had time to heat up — blue or white smoke could mean that the engine is burning oil.
Buying a used semi without checking it out is like buying a house without stepping inside. When you’ve found a truck that catches your eye, you’ll want to engage all of your senses during a test drive to make sure it’s in solid condition — and meets your needs for space and comfort.
Check the odometer to make sure the mileage makes sense for the age of the vehicle. Observe how the semi handles on various terrain. Check the lights, wiring, any corrosion and loss of brake fluid on the brakes. Check the oil, as well. In addition to listening and feeling for anything odd when you’re behind the wheel, ask your representative about:
The truck’s history. Ask the representative or owner what it was used for, and how they acquired it or why they’re selling it (if it’s an independent owner). If a particular semi was used to haul short distances but you’re looking to travel cross-country, it may be a risk to expect it to hold up for your purposes.
The most recent DOT inspection. The representative should be willing and able to provide the most recent inspection papers, so you can review any hidden issues, and possibly use them as a negotiation point later if practical.
Accident records and maintenance records. These, like the DOT inspection, will help you anticipate future problems and parts that may need replacing.
Ask about warranties. Even if there’s no factory warranty for your used truck, a dealer may offer a separate warranty for a certain time period or mileage limit. A stellar warranty pays for itself, since a used vehicle purchase always involves some degree or risk.
Finally, trust your instincts. A truck that doesn’t feel right or a seller who seems unwilling or unable to answer your questions may signify you need to do more shopping around.
Expect a used Class 8 truck to range from $20,000 to $90,000, with the average cost of a class 8 truck in 2015 hovering in the mid $50,000s. When compared to most new rigs that run six figures and above (not to mention the unfortunate truth about how quickly a brand new vehicle depreciates) you’ll be saving a boatload of money upfront if you’re able to purchase a high-quality used truck.
If this is your first time purchasing a used truck, it’s tempting to jump on the most truck you can afford — but think again. As a business owner, the longevity of your trucking business and your career depends on your ability to make choices that benefit the business first. It may be tempting to get the “nicest” or showiest truck your credit will buy, but this would be like a teenager withdrawing their entire Roth IRA to purchase a BMW.
Evaluate your budget first, and purchase a truck based on that. How much can you afford to spend each month and still turn enough of a profit to pay yourself adequately, and keep growing business? If you haven’t already evaluated your fixed and variable expenses, use the OOIDA’s financial worksheet to make estimates, or see an example laid out at The Trucker’s Place. Before you begin meeting with sellers, check with a commercial truck financing company for an idea of how much you can borrow based on how much money you have saved for a down payment and your credit history.
Two of the biggest challenges in financing a used truck are the age of the truck, and the driver’s creditworthiness. According to Rob Misheloff on the Smarter Finance USA blog, lenders are less likely to finance a truck that’s ten years old or more. Furthermore, if a truck is 15 years old, the number of underwriters willing to finance drops by about sixty percent. When you’re looking to finance, search for trucks that fall under the ten year-old mark.
You’ve found the perfect truck, secured financing, signed the papers, and the keys are in your hand. Congratulations! Now, the real work begins: running your business and maintaining your rig. After you’ve purchased your used truck, if all goes smoothly, you’ll want to establish a rapport with your repair shop to keep your vehicle in excellent working condition, and build up your emergency funds.
Something to keep in mind is the possibility of “trading up” once you’ve started turning a profit. Trading a five year-old model up to a two year-old model, for example, can save you significant money on both repairs and fuel — not to mention, it’ll be even easier to trade your commercial truck up in the first place if you don’t wait until it’s bordering on dinosaur status.
Purchasing a used truck is a fantastic exercise in research and discipline. With a discerning eye and commitment to finding a perfect fit, you’re further empowering yourself as an owner-operator, ensuring business success for years to come.
It seems that lease to own semi truck tends to get a bad wrap, whether it’s for a dump truck, a house, or even a big screen TV. “It’s set up for you to fail,” says one driver posting in the Trucker’s Report. “You’ll make more money as a company driver rather than a lease operator.” Another decries, “it’s a one-sided deal in the company’s favor. Why put money into a truck that isn’t yours?”
Warnings like these are plastered across forums, where experienced drivers bemoan everything from the limited potential for earning while under a lease, to the sketchy practices of companies who never let their drivers have full ownership of their rig, to the limited (or absent) equity of the truck once you’re done with your contract.
While some of this is true, there are legitimate lease-to-own programs for commercial trucks that won’t decimate your bank account or your peace of mind. In many cases, drivers don’t fail because the lease-to-purchase program is faulty –– they fail because they, themselves, are misinformed as business owners.
If you’re prepared to pay for maintenance, have a realistic perspective on the financial responsibilities (and pitfalls) of being a new owner operator, and have the self-control to keep tight reins on your cash flow, a lease-to-own contract may be a viable path to truck ownership.
Leasing, Purchasing, and Everything in Between
First, if you’re just beginning to explore becoming an independent owner operator, there are three main ways to obtain a commercial vehicle that you’ll need to know about: you can lease from a third party, lease to own, or purchase a truck by yourself.
Here’s a snapshot of leasing and purchasing, before we get into detail about how the lease-to-own option compares:
Leasing. To lease a truck through a third-party provider, you’ll have to put some money down (similar to the security deposit you pay on an apartment or rental house). Depending on lessor, you may also need to have good credit to get approved –– or pay more upfront if you have bad credit.
Multiple owner operators in the Trucker’s Report forum discuss how they found local truck owners to rent a commercial vehicle from. One driver’s wife talks about finding a truck in town with a “For Sale” sign, and approaching the owner about renting it instead of purchasing it from him. “The guy needed to get rid of it due to a divorce, and said ‘yes,’” she recalls, “They both went to the bank where the [owner] had it financed, and the bank drew up a third-party contract. For $700 a month, he would take over the payments.”
Purchasing. When you purchase a truck, you can either work with a bank to finance it, or buy the truck outright. Financing is the common choice, especially for new owner operators, who are unlikely to have the capital upfront to purchase a brand new rig. When buying, the biggest decision is whether to purchase new or used.
New trucks are favorable if you’re still getting up to speed on truck maintenance, since you won’t have to contend with as much in terms of faulty parts or repairs. With new technology, new trucks tend to get better mileage and offer other amenities you won’t find in older models. However, a used truck can be an extremely economical option for the savvy buyer. By inspecting service records, the vehicle itself, and a seller’s motives, you can score a used vehicle for a fraction of the price of a new one.
Now that we’ve briefed you on leasing from a third party versus purchasing, let’s take a look at the middle road: entering into a lease-to-own agreement. Here’s the lowdown on what lease-to-own is all about, and some key considerations when entering into this type of arrangement.
Lease-to-own is exactly what it sounds like. You’ll pay a monthly fee to whoever owns the truck you drive, and part of that fee will go toward its purchase price.
At the end of the lease term there’s a final balloon payment, sometimes $10,000 or more, that you’ll have to pay before the truck is yours. These programs serve as a way for truckers with subpar credit to work toward ownership, with little or no money down. They also cater to owner operators who are tired of leasing through a company and want to make a steady transition into running their own business.
Lease to own programs often draw another type of driver, the ones who are allured by the notion of being an owner operator, but don’t have the industry experience or business acumen to obtain their own truck and clients yet. If you fall more in the latter group, you may be far more successful over time if you gain experience driving for a company than leaping headfirst into ownership through a lease-to-own program.
When you’re a company driver, some companies may offer their own truckers a lease-to-own agreement. However, experts warn against leasing-to-own for the same company you haul for. The reason? Some companies will dramatically reduce their drivers’ miles at the end of one of these contracts, limiting the amount of money they can make. This leads to missed payments, broken contracts, and nothing to show for it.
With all of this negative buzz around lease-to-own programs, it may seem unbelievable that anyone would opt for something so risky. However, not all of these programs are created equal, and it only takes a bit of research to determine if you’re signing with a reputable company or truck owner. Here’s how to sort the respectable setups from the scams.
Learn as much as you can about the truck. An Overdrive Online article by Randy Grider emphasizes the importance of learning about your truck before getting into a lease-to-purchase arrangement. “Not only will this give you insight into the equipment itself, but also the lease-purchase program,” Grider writes. For starters, check out mileage, and maintenance and repair records. Find out from the owner how many times the truck has been leased. If it’s more than one or two times, be wary –– this could indicate some underlying issue with the truck, or a loophole in the lease-purchase program that inhibits drivers from successfully transitioning to ownership.
Next, if you’re participating in a lease-to-own with a company you’re working for, examine the business’s financial health. The worst outcome for you, the hopeful future owner operator, would be for the company to fold –– leaving you no legal ownership over the truck you’ve been leasing. If the business is publicly traded, you can find stats about financial health online. Otherwise, ask the company directly about its economic outlook.
If you’re unsure about a particular program, there’s no harm in calling other carriers to learn more about their programs. Comparing the rates, lease length, and financial health of several different companies will help you make an informed choice and guard against any potentially catastrophic outcomes.
When you’re meeting with the owner, dig into the lease-to-own contract. Will there be a balloon payment you have to make by a certain date, in order to have full ownership? Because these can be in the tens of thousands of dollars, you’ll have to set aside some of your earnings monthly to prepare for it –– or else your lease-to-own program will fail at the very end. What is the penalty for a late payment? Are there any escrow accounts, and if so, will you get the balances back after the lease is up?
Finally, if your contract is especially long or laced with legal jargon, it may not hurt to hire a lawyer to review it with you.
According to a 2011 survey conducted by Truth About Trucking, 77 percent of drivers fail to complete their lease-to-own programs. One of the top reasons cited is a lack of preparation for the challenges of the owner-operator business, including repairs, which is extremely likely to happen over the course of a lease to own truck program.
But you’re smarter than this, of course. You’ve chosen what seems to be a reputable company, you’ve picked a truck in great working condition, and now you’re on the path to ownership. Some drivers may make the mistake of simply hitting the road and hoping the money will roll in, but that’s rarely the case. Now, the subsequent success, or struggle, of your burgeoning business is up to you. Here’s how to get the most out of your lease-purchase program.
Maintain the value of your truck by driving responsibly, and taking care of it. Remember, this truck will (hopefully) be yours at the end of your contract –– so now’s the time to make sure you’re taking the best care of it you possibly can. One of the best ways to do this is to drive slowly and carefully, according to Ed Godfrey at the Big Road blog. “On average, you’ll want to drive between 57 and 60 miles per hour [and] conserve your brakes in favor of using your engine brake,” Godfrey writes. Driving at a pace that won’t stress your equipment is essential for building equity on your lease-to-own vehicle. In addition, “regular oil changes and grease jobs are the cheapest mechanics you can hire,” Godfrey adds.
Learn everything you can about maintenance. Even if you aren’t the one doing the labor, you should be aware of everything your mechanic does to your truck. It’s an unfortunate reality, but the only way to be certain that a mechanic is ethical and honest is to verify with your own eyes what they’re replacing or fixing –– and why. Godfrey suggests keeping records of everything done to your truck, so that if something goes wrong and you’re under warranty, you can have the problem corrected.
Leasing to own isn’t always the minefield the community makes it out to be. Like with any important decision in your owner-operator journey, if you take a focused approach to decision making, you’re likely to make the right choice for you and your business.