I am in need of a new truck or cargo van for an employee to use. Checking prices of new ones has reminded me why I maintain what I have and drive them till the wheels fall off. I have stuck with GM products just because of the cheap replacement engine program. I’ve found that most trucks and vans will make it through two engines before they get cost prohibitive to maintain or worth too little to bother. I’d rather spend $500 here and there than have a lot of capital tied up, or big payments. Leasing doesn’t work for us because the excess mile are too expensive, even if they’re figured going in.
Has anyone come up with any creative solutions? Even the price of late model used vehicles seems high. I’d love to get a 12′ contractors box on a heavy duty chasis, but I can’t make it pencil profitably. We do new construction, spec and custom as well as a lot of remodeling and repair work. A used cube van is an option and will certainly carry about all of the commonly needed tools, but is rather bulky for around town work.
Any advice or thoughts would be appreciated.
Replies
Mine is a used Ryder van, GMC 1985 with about 130,000 miles running every day. Ryder times them out of service at about 85,000 because that's about when it starts costing them too much. Got mine at aout 90K and spent maybe a grand on maintainence since.
But it sounds like maybe you are on the road a lot instead of local. In that case, I would be in a new or newer one. Hate being broke down away from home!
GMCs new vans have some interesting configurations like sliding drivers side cargo door and awning style tool doors. I'm whetting my thirst for one.
Hi piffin, I've enjoyed reading some of your other posts here. What size van do you have?
I feel exactly the same way about being broke down! As the new aquisition is for an employee I feel even stronger. If there is something I hate more than being broke down myself, it is paying someone else while they're broke down!
I'm drivng an 89 Chev Pickup with boxes. It's pushing 170k miles on it's original engine and has never left me stranded. It had tranny work at about 100k and has had a few radiators and starters, brake seals, etc. I really maintain equipment though, too damned expensive (or I'm too cheap) to keep replacing it. Like anything, if it pencils that extra production will pay for the equipment in a reasonable time, I'm all for it. I just can't get a new rig to pencil like that though. I'm one of the busiest contractors in my area, and the only one that isn't driving some type of big, new diesel truck. I still work though, so I don't just drive from jobsite to jobsite. I'm in the field four days a week and I treat my truck like a truck. Not being new I'm not freaked out by a shifting load or a little ding here or there. I'm really image concious though, and keep everything looking neat and clean.
I agree about the new GMC vans. I just want my working foreman to be able to carry the majority of what he will need as he travels quite a bit to jobs a ways from home and is on the road some times a few days per week. We have contracts with lenders to do rehab work on repo's and go through a lot of things like wax seals, splatter cans for drywall repair, etc. I looked at a 12'cube van on a GMC chasis and it was great, but rather bulky. I'd rather use a trailer that can be left behind or at a job site.
What kind of fleet prices are you finding on the new vans?
Haven't been pricing yet, I'm just teasing myself 'cause what I've got works still (there's that old saying - the cheapest vehicle you can own is the one you have right now) and I don't go long distances This Island is only thirteen miles from tip to top.
Mine is a 12' lowcube. A high cube willl wear you out climbing up.
I also have a 88 Dakota for running around in. I like to leave cube on job when I can. This time of year brings a lot of calls though.
I'm like you on pencil checking the investment. I can see where a tool will pay for itself before I buy it most of the time and I see a truck as a tool instead of a status symbol or a projection of myself. (Maybe that makes me un-American)
But with high miles, I can see the day when I'll need to make a change in my wheels. For right now, I just re-financed the house to pay the wifes medical bills for breast cancer(she's doing fine) and signed a loan app for daughter's college so a new one isn't doing anything more than flirting with me.Excellence is its own reward!
You have bigger fish to fry. Best wishes for your wife's continued recovery. I'm with you, as long as it is clean and not a total junker, I'm not ashamed to pull up in it. Work quality and reputation speak louder than an ego boosting 40k truck does. I'd love to have one, just can't justify it.
I'm considering a used truck and a Wells Cargo type trailer for my working foreman. He could use the truck only when it is adequate, and have the trailer stocked and take it to jobs that require it, or leave it at a job site. With the price of tools anymore I'm somewhat hesitant about the leaving it at a job site. If some crack addict knows there are tools that he can pawn inside I don't think you can keep them out.
Speaking of tools, have you, or anyone else, had any experience with the Rigid portable table saw, the one with the built in dolly with pneumatic tires?
End of the model year is a good time to buy .......... now with all the rebates and low or no interest financing. Here's a local dealer's flyer .......... prices seem pretty reasonable for new vehicles. http://www.wizford.com/6W.htm
Used trucks seem to keep their value, at least in this area. Seems like they're getting top dollar for vehicles with a lot of miles on them. No easy answer ......... a new truck (or a used one for that matter) is a lot of overhead.
Thanks for the link, their prices do seem good.
I read some pretty positive things in a thread here somewhere. I'm close to getting one. Been studying. Half of good living is staying out of bad situations.
Ive been thinking about a 15 passenger bus van . Ive been told to buy a truck that will carry all my equipment . Thats not possible , but Ive wondered about something like a bread truck. I do the same thing you do . I buy repos and redo them mostly. I also have rentals . I have to to most all of it , and thats the tool problem storage summed up.
Tim Mooney
A tip on buying vans from someone that used to sell new GMC's.....find a sales guy ya like...and ask which vehical is the most days in stock.
We had a huge lot...and I could always find a van stickered at 22K to 24K that I could let roll for 17K to 18K. Right now things must still be slow...as they keep extending the 0 down and 0 interrest........I normally advise going used...or leasing...but this just might be the time to buy in new.
You mentioned leasing...someone did!....the miles are always cheaper up front.....usually no more than 15cents........no matter how ya slice it...that's cheaper than the depreciation taken for miles at trade in or resale. I'd ask the account which is a better write off for ya......leasing or buying......leasing may begin to look even better. Jeff.......Sometimes on the toll road of life.....a handful of change is good.......
According to Consumer Reports, leasing is the MOST EXPENSIVE way to operate a vehicle. What makes you think you're not taking the depreciation hit? where do you think the dealer passes it?The only way to avoid depreciation is to buy used. Go to Dave Ramsey's web site to hear all about car fleasing.
According to Kelly Blue Book, A new Ford F-250 loses over 50% of it's value in the first five years.
2003 F-250 Superduty Long Bed, 000000 miles: 21,860
2002 F-250 Superduty Long Bed, 10,000 miles: 19,035
2001 F-250 Superduty Long Bed, 20,000 miles: 16,960
2000 F-250 Superduty Long Bed, 30,000 miles: 15,425
1999 F-250 Superduty Long Bed, 40,000 miles: 13,545
1998 F-250 Superduty Long Bed, 50,000 miles: 10,870
A 1993 F-250 is worth 4,685.
So, in the first five years you lose 11,000 bucks. In the next five you only lose 6,000.
Buy a five year old truck and pay cash for it. Bank your would-be truck payments and buy another one five years from now.
I have a brand new 1993 truck that looks and drives like a cadillac.
Of course, that's simply my humble opinion,
Dan
Dear Dan......consumer reports is full ####.
aside from the fatc they haven't given an american make a decent report since inception........they're behind on their lease "facts" also.
as Malcom Forbes once said......"Buy what appreciates, lease what depreciates".
The average auto consumer switches cars in less than 3 yrs. That means that most car deals are sealed with the understanding the the "up-side down" equity of the trade in is burried in the new car deal.
That...in turn.....makes for an even worse trade in down the road. In leasing....with a closed end deal....when Ya know the exit terms..and don't try an early exit......ya get out with yer pants on.
Idgits fighting logic are why I don't sell cars no more! Feel free to quote consumer reports like the bible and tell the car sales man that U know more about resale than they do....it's your dime. Have a good time.
For those that don't wanna waste money....if U trade in or up every 3 to 4 years........lease is the way to go....have someone else pay for the equity....
IF you run a vehicle into the ground...as I do......buy straight out.....
and the smart buyer buys a year used...let someone else take the first equity hit.
Or have a goos mechanic like I do and buy older.
Funy how consumer reports forget to "report" the up keep of and older vehicle???
BTW..that mag sucks. Jeff.......Sometimes on the toll road of life.....a handful of change is good.......
Geez Jeff, What do you really think?
Consumer Reports isn't a popularity contest. They simply test products and report their findings. Their tests may be subjective, so it's a good idea to read the testing methods and the stated purpose of the tests (which are published at the beginning of each article).
But when analyzing a lease, there's no subjectivity in the test. It's simple mathematics. Leasing cars is a rip off, and here's why:
First of all, psychologically, consumers are much less likely to negotiate a better price on a lease package than when they purchase it outright. After all, they're not really buying it, they're simply renting it, so they have no leverage (or at least they don't think they do). The auto company can build in the depreciation hit to pass along to the consumer. In fact, they'd be idiots not to.
From Smart Money Magazine:
"...Bottom line is leases bring more profit than sales, even for the exact same car. Why? One reason is consumers know less about leasing than buying. So, while 80% of car buyers haggle over the car's purchase price, only 10% of leasing customers do. Plus, lease customers tend to end up with a more expensive car." – Because the lower payments (higher interest) make a more expensive car seem suddenly affordable.
Second, after paying 400 bucks a month for three years ($14,400), you still don't own it. They give you the option to buy their used car for it's book value. Hysterically, they cloak it in a phrase such as "Smart-Lease".
Third, they limit the milage you're allowed to drive. This is directly how they pass the depreciation on to you, the consumer.
"The average auto consumer switches cars in less than 3 yrs. That means that most car deals are sealed with the understanding the the "up-side down" equity of the trade in is burried in the new car deal. "
Yes, As I said, you eat the depreciation. How else could it be that a phrase such as "upside-down" (you owe more than it's worth) is so common in the automobile industry. In addition to the average auto consumer switching cars every three years, here's another one: the average consumer is deeply in debt and broke. The three top reasons for consumer bankruptcy is credit cards, home loans, and auto loans/leases.
"That...in turn.....makes for an even worse trade in down the road. In leasing....with a closed end deal....when Ya know the exit terms..and don't try an early exit......ya get out with yer pants on."
What? You may get out with your pants on, but they're down around your knees and you're grasping your ankles yelling "Thank you sir may I have another!"
So you agree that buying new cars is a rip off, but you still think that after dumping all that money into GMAC's (or whoever the loan company is) lap you're better off with no equity in the thing? You've just spent 14,400 dollars any you now have to give it (the car) back!
"as Malcom Forbes once said......"Buy what appreciates, lease what depreciates"."
Do you think Malcom Forbes leased his car? C'mon, Bubba.
"Idgits fighting logic are why I don't sell cars no more! Feel free to quote consumer reports like the bible and tell the car sales man that U know more about resale than they do....it's your dime. Have a good time."
You misspelled "idiot". And your grammar sucks. And I only quoted Consumer Reports once. I said that they say "a lease is the most expensive way to operate a motor vehicle". The other facts I gave were from my own quick research at kbb.com (Kelly Blue Book).
"For those that don't wanna waste money....if U trade in or up every 3 to 4 years........lease is the way to go....have someone else pay for the equity...."
"...Have someone else pay for the equity...", Maybe you ought to look that word up...
But really, for those of you who don't want to waste money, buy a three to five year old car. Whatever you do, don't buy new and trade up every three years!
"IF you run a vehicle into the ground...as I do......buy straight out....."
Absolutely correct, but buy a three to five year old car and pay cash.
"and the smart buyer buys a year used...let someone else take the first equity hit."
There's that misuse of the "equity" word again...
"Or have a goos mechanic like I do and buy older."
You misspelled "Goose", Although I'm not sure why you'd want a goose mechanic.
"Funy how consumer reports forget to "report" the up keep of and older vehicle???"
Ummm, they do in fact report repair histories of various makes.But again, the used car values were from my research ay kbb.com
"BTW..that mag sucks. Jeff"
Yes, I gathered that was your opinion because they never "vote" for your favorite car.
But <I>I</i> Like them because they voted for my toaster!!
Again, this is simply my humble opinion,
Dan
http://www.daveramseyclub.com/makeram.asp?UKEY=14336
http://www.bankrate.com/yho/news/auto/20010601a.asp
Edited 9/9/2002 7:40:53 PM ET by Dan
Edited 9/9/2002 7:41:59 PM ET by Dan
so...what yer saying......idgit....is......if people go in blindly and lease as an uninformed consumer.......taking what ever price the dealer quotes right off the bat....they're getting a bad deal?
Wow...thanks......good thing yer here.
well...that..and yer excellent usage of grammer.
So let me ask ya....how many cars ya sell and/or lease in the last...say.....lifetime?
For the "average" car buyer....leasing is the way to go. As long as they take the time to educate themselves on how to structure the lease to their favor.
Dan's expertise was the primary reason I got outta car sales.......I'll say it agin...........people.........in general........are idgits.
It's your money, Dan.....waist(drive ya nuts, huh?) it how you choose. Jeff.......Sometimes on the toll road of life.....a handful of change is good.......
OK you guys both make some sense.
Now lets apply your reasoning to a specific example....Mine
I have a 6x12 job trailer with my tools in it that gets towed about once a month.
I am presently driving a '98 F-150 2wd extcab w/ 8ft bed
My 4 yr. lease will be up in January
the residual value will be 10800$
The truck had 8,000 miles at the beginning
it will have 40,000 by January
I was allowed 12,000/year, so I will be about 16,000 miles "ahead"
I know it is a no-no to lease and then buy, but .......
Will I be able to find a comparable vehicle for this price?
I do not have the cash to make a significant down payment on another truck. So I would be financing the whole shot.
currently about 85-90% of my mile are work miles so I deduct that % of my lease and my fuel costs.
Does anyone care to share their wisdom on this matter with a financially challenged carpenter?
Any advice will be appreciated.
Thanx in advance
Mr T
Do not try this at home!
I am a trained professional!
I did this once with a slight twist. I saved the money during the lease and bought the car at the end. My opinion is you have the advantage of knowing how the truck was cared for and its history so why not purchase it. Where else would you get a known used truck with this milage for ten grand. The fact you leased it is history and shouldn't make any difference in the decision at this point.
I buy my stuff new and drive it for ten plus years or until parts start blowing off of it. I think Jeff is right in his strategy but if you keep the vehical long enough I think that offsets all other strategy. You can pay too much and keep it longer and it will all wash out in the end financially. I think consumer reports isn't always totally objective. I think this is not an english or spelling contest. DanT
I dunno. You've thrown me by saying the lease was for 4 years..and the truck had 8K miles on it to start with!
My whole point way back in the car sales years...was......only structure a lease so the terms followed the basic manufacturers warrenty.....at that time I sold Pontiac/Olds/Isuzu/Suzuki and GMC. All had a base warrenty of 3yr/36K miles.....so I advised to try and structure the lease to a max of 36 mos. Tha logic..what's the point of risking high maintenence dollars on a vehicle ya don't own?
And where I sold........fleet car demo's were turned in before 5K miles..and trucks never hit more than 2K.
So.....I'll have to re-read your post tomorrow......long day and I'm calling it a nite early.
But real quick advice is.....not necessarily a no-no to buy a lease.......remember....everything's negotiable.......treat it as any other vehicle.......and as has already been mentioned.....at least you know the history of this one.
My quick how-to on leasing......in very general terms.....
....pick a car/truck you like......one in stock is best........ask if they have any "in days" they wanna get rid of...meaning a car that's been sitting around because no one else likes the color...or the truck manager ordered too many and it didn't snow heavy that year......see if ya like that one....
...now...tell them U are gonna buy..straight out...no trade......and negotiate till yer blue in the face.....
Now.....remember that you would like to trade in the old car....negotiate a trade value.....
You now have 2 very real numbers.....a price they'll sell their car for....and a price they'll buy your car for......
now.....negotiate rates...or use your credit union...what ever gives the best rates......
then..when ya go into F&I........ask about the extended warrenty and fake a heart attack when they quote the price.......remember...everything's negotiable.....the last policy I bought...was when I sold a car to my soon to be wife.....and I got the $800 extended warrenty for somewhere around $250....granted I worked there...and knew the F&I girl.......but this shows there is room to work.......have no idea what would be considered a fair price now days.......but I wouldn't have bought it at list price......
And most important.....when ya lie to the salesman about the fantastic deal offered down the street....keep it believable.....or he'll tell ya like I used to........."That sounds almost too good to believe......what the hell are ya doing here talking to me?"
Jeff.......Sometimes on the toll road of life.....a handful of change is good.......
Ok, first of all, after thinking about the terrorist attack that happened last year I feel a lot less like giving people ####, so I'd like to apologize to Jeff for being rude about his spelling and grammar. But hey, Jeff, you did call me an idiot and misspell "idiot".
It was way too tempting to pass up.
I'm sure if you think about it for a minute, you'll see my point.
Mr T,
My whole point was (and still is) that payments are bad.
The worst time to borrow money is when you're broke.
If you can't pay cash, you really can't afford it.
If you don't have payments, you can save a lot of money, have compound interest work for you, and pay cash for the stuff you want and need.
Dan T saved extra money during the lease to buy his truck, so at least he didn't go into debt twice. He also makes a valid point that you know the exact history of the vehicle. But I think a lease is a rip off.
If you consider what those truck payments could do for you in a Roth IRA verses paying interest and penalties to an auto dealer, the difference is astounding.
If you dump your car payments and save four hundred bucks a month over your career span (age 25-70) into good growth stock mutual funds in a Roth IRA,
at retirement you'll be a millionaire many times over.
That's a pretty easy retirement plan to implement.
If you don't do it,
Hope you like the truck!
Here's how to implement the above plan:
You said that you have a nice tool trailer that you leave at the jobs and only really use the truck for dragging it around once a month. You don't need an $11,000 truck to move a trailer. A five thousand dollar truck will do it and look fine as well (In fact a three thousand dollar truck will too – just tell your customers you're keeping your overhead low so you can give them the best price possible).
You must have some sort of savings don't you? If you could come up with three thousand bucks before January and borrow $2,000 from your credit union you could get a perfectly good truck. Pay off the two thousand in four months, take the old truck payment you used to pay (how much was it anyway? 350? 400?) And stick it in the bank for a year. Next Spring you'll have nearly five grand and a five thousand dollar truck worth roughly four thousand. Sell the truck and buy a ten thousand dollar truck with cash for nine thousand. Or find someone else who's got too much truck and buy it for eight grand and take your wife on a vacation with the extra thousand.
Pretty soon you'll be buying two year old, low milage trucks with cash every five or six years.
Retirement without Alpo, my son's education and a large cash emergency fund are way more important to me than a new truck. Again, mine is a 1993 F-150 XLT (extended cab and 8-foot bed, power everything (including inflatable lumbar seats) A/T, Cruise, cloth seats, car phone...). It's like a f******g Cadillac.
I've replaced the motor.
My main problem with a lease is that you have debt but no ownership. You take on a bunch of debt and at the end of your lease, you have nothing. Your renting. God forbid you drive it too far or scratch it. They then offer to sell you the vehicle for the book value. You ate the depreciation. Dan T's numbers illustrate that clearly. The price they're offering is about exactly what the retail blue book is on it. The trade in is lower. They're going to sell it for what it's worth whether you buy it or not. Your rental fees covered the depreciation of the vehicle's book value. The extra charge for milage and misc scratches will more clearly illustrate this fact.
I read an article in Kiplinger's saying that a lease could be a good option if you planned to turn in the car within three years because (and this was the basis of their argument) the monthly price was lower.
It assumes that the consumer has a three year snapshot of an existence.
How pathetic is that?
Paying a car payment over your working career is in no way a good decision financially.
It's far better to buy it two or three years old with cash, and let someone else eat the depreciation.
And keep banking those would-be payments.
Good luck,
Dan
Thanks Dan
You've given me alot to think about!
Mr TDo not try this at home!
I am a trained professional!
A few observations.Taking a bit of sound advice from a friend a fellow electrician found a decent beater to start with. The truck was 10+ years old but the mechanic found nothing wrong other than normal wear and tear. He estimated that she had another 40k miles in her without major work. He recommended replacing the battery, alternator, water pump, hoses and belts. He bought the truck for $4000 cash and spent another $400 on parts. The work he did himself.
This he ran for over a year and a half. During this time he put aside what the payment that would be on the newer truck he wanted plus what he was saving by carrying less insurance. He went with a higher deductables than a payment plan would ask for but still meeting the legal minimums plus a reasonable liability total.
For the following 6 months he spent one day a month going to dealerships and researching his prefered truck. He looked, talked and test drove. Ignoring the sales pitches he always walked away.
After this 6 months, plus or minus, he had two years of payments and insurance savings, a good bit of knowledge on the trucks and their pricing and a working knowledge of the dealers and salesmen in the area. He also had a reputation for walking out and being a browser and hard sell.
With all this at hand he went to the dealers and made an offer on the truck he wanted at several dealerships. After walking off because of nonsense he got a message on his answering machine. He returned, paid cash and drove off with his truck that he can insure as he sees fit. The total cost was less than half of what he would have paid on a payment plan. Also he had a beater to use when his truck was in the shop for service or for beating around job sites.
Dan,
While I concure that car payments are a financial no no I also believe you have to look at the overall picture. Mr. T knows the care, up keep and history of the truck he has now. All the money he has paid on the lease is truly water under the bridge and what we are discussing now is what to do when the lease is up. His existing vehical has only 40k miles on it and is in a known condition. I agree with you the prudent move is to save as much cash as possible and pay down the new note. But I disagree on giving up this truck as it is in a known condition. Something he will not gain with any other used vehical. Sure you can take it to a mechanic and he can guess how long it should last but it truly is a guess. My current pickup is a 93 with 137k on it. No rust, uses no oil, drives like a dream. Why? I bought it new and took care of it.
I believe your strategy is a good one. I believe mine is equally effective. Buy new, or close to new, keep up the maintenance and drive them for 10 or more years. Saving money for the next all along. Many ways to the same end I suppose. Just my thoughts. DanT
If you are interested, I think Ryder markets some of their used trucks through http://www.usedtruck.com.