Consider it Sold: Tips to maximize used vehicle value
Posted: August 17, 2017 by Eric Berard
If you’ve spent any time channel surfing, it’s impossible to avoid the proliferation of home improvement and house flipping shows. And they all reflect a common theme: preparing a pre-owned item always pays dividends when it comes time to sell.
The lesson applies to your trucks, too.
One of the first challenges is to decide on the best time to sell, of course. That will be dictated by factors such as how the truck is used, operating environments, and personal risk tolerance when it comes to the threat of major repairs that might emerge as warranties expire.
Personal experience goes a long way when deciding when to pull the trigger, says Tom Keenan, fleet maintenance manager for AYR Motor Express, a 240-truck fleet based in Woodstock, New Brunswick. It’s why the company sells its trucks with just over 1 million kilometers on the odometer. “Over the years, we found out that this was a good time to get rid of them for what we want them to do. They become a lot more maintenance-intensive than what we’d like.”
Others look to turn over the equipment more frequently than that.
“Fleets are gravitating toward a three-to-five-year trade cycle, limiting total mileage to 400,000 – 600,000 miles (700,000-1 million kilometers) to improve residual values. Cost of ownership factors such as warranty, maintenance and parts costs, and other wear items also factor into a fleet’s decision,” says Anthony Gansle, Peterbilt director – sales and marketing administration.
François Desrochers, used truck sales manager at Freightliner’s Globocam dealership in Montreal, is more conservative and advises against selling past the 700,000-kilometer mark. “The warranty will usually be valid only until 800,000 kilometers. After that, the seller is likely to lose a lot of money on his sale,” he says. “If you want to get big money for your unit, there has to be at least 50,000 kilometers of warranty left on it. Nowadays with anti-emission systems, repairs are much more expensive than they used to be, and without any -warranty, a truck’s value drops close to zero.”
Even the time of year can play a role in choosing when to sell.
“Used truck trade cycles often mimic the new vehicle purchase cycles, with maybe a month or two lag for returns,” says Gansle. And that cycle is often -coupled to the model-year change, in early January, notes Mike McMahon, director – strategic accounts at the Ritchie Bros. auction company.
Desrochers has found a particular interest in used trucks at the end of a year. “Maybe they need to create some company expenses before January 1, for accounting and taxes reasons,” he suggests. But long-nosed classic models with plenty of chrome tend to move best in the summer. Dump trucks are most popular as spring approaches, when potential buyers are preparing for construction season. He also sees more day cabs selling in the spring.
Still, there are going to be potential buyers at other times of the year. “Yes there are peak periods, but all kinds of trucks are also sold all year long,” he says.
Strip it down
Just like the home sellers who stage a property, removing personal pictures and shedding furniture to make things look bigger, truck sellers need to strip away all traces of the fleet it worked for. The goal is to ensure potential buyers can see themselves in the truck.
Company decals are the first to go. “Everything is removed. It’s a plain white truck as you would buy it at a dealer, new. Everything is ready to go to the next new owner,” says Ayr president Joe Keenan, referring to how his fleet prepares trucks for sale.
Desrochers even suggests going so far as repainting fenders that have been customized to match a corporate image.
“You want to make sure that you de-identify everything on the truck. You want to market and sell something the same way you would want to buy something,” McMahon agrees.
If the truck has a sleeper, meanwhile, get rid of the old mattress and replace it with a new one, Desrochers and McMahon plead. And smells need to be cleaned away as much as the grime. Desrochers recommends an odor bomb to clear away cigarette, food or pet odors, with the ventilation cranked to full speed. “We sometimes have to sell trucks that never have been cleaned before and in which people smoked like chimneys,” he says.
Inspect, repair, clean
In the same way that a home inspection can prove everything is in good repair, a thorough vehicle inspection will help to avoid surprises during a potential buyer’s road test. A vehicle safety will add to the feeling of security.
“Vehicles should be DOT-certified, clean, provide lower mileage, and have functioning emission systems to be well accepted in today’s market,” says Peterbilt’s Gansle.
It can seem painful to pay for repairs on a truck that someone else will use, but it can be worth it. Ritchie Bros. global marketing executive Mike Cerilli explains: “If you invest a dollar up front in a little reconditioning and ensuring the vehicle is maintained -properly, the return you see on the other side could be 10, 20, 30% additional to that dollar, depending on what the repairs or maintenance or refurbishment of the vehicle can be.”
“Spend a little bit,” says his colleague McMahon, “make more.”
The repairs don’t end with critical components. Every little detail counts. A drawer that doesn’t shut correctly in the sleeper, a blinking dash light, a -rattling glove box latch all need to be fixed to leave a good impression. The same applies to seats. A new seat cover will hide any wear, tears or holes that can leave an impression that a truck had a hard life.
Above all, document every maintenance event to prove a unit was truly pampered. “All that should drive some value and some comfort for the owner-operator or small fleet looking to buy this equipment,” stresses McMahon.
Once the mechanical side is addressed, it’s time for the beauty makeover, and some extra effort will return top dollars. Think show ‘n’ shine.
Popular spec’s and options
As important as the work just before resale will be, some thought to spec’s when first buying a truck will make a difference in years to come.
Automated transmissions, for example, are becoming increasingly popular. “Right now, between 70 and 80% of people ask for it,” says Desrochers. Ayr trucks are still manuals, but Joe Keenan admits that can be a deterrent to new drivers. He might be tempted to move toward automatics for upcoming purchases.
Peterbilt’s Gansle also includes disc brakes among features to draw attention, and McMahon agrees that minds are changing around that. “There’s a lot of specifications that are out there that the big fleets had, primarily for some weight and fuel economy. And those specifications and those tractors are coming back into the market and becoming more widely accepted,” he says.
“Side fairings and cab extensions that enhance the aerodynamics and fuel economy are a winner in this market. Same thing with aluminum wheels over steel wheels,” says Globoam’s Desrochers. Traction enhancing systems such as ¾- or full-lock differentials are also in demand, according to him, as are the full-height sleepers with two bunks. Even if the original application doesn’t include a team. “Besides, a full-height sleeper offers more storage space,” he adds.
McMahon agrees: “I would generally say that, in the used truck market, bigger is usually better. You have a lot of customers looking for bigger horsepower, bigger transmission, and bigger axles. They also like to have all the bells and whistles on the equipment as well when it comes to some of the features that are on the interior and the exterior of the cab.”
He also notes that retrofit or bolt-on options such as APUs and auxiliary -heaters should be left in place rather than taking them off to put back on one of your fleet’s trucks, as long as they are perfectly functional. “That option should help sell the truck a little bit faster, depending on who’s the buyer,” he says, “and the seller should also be able to collect a little bit more.”
7 well-used secrets
No Diesel Particulate Filter – This is a popular feature to highlight in classified ads. An older truck with no modern aftertreatment system can actually be a plus for someone looking for a simple truck to maintain.
Fleet units – Bigger fleets have a good reputation among used truck buyers because of their maintenance practices. Identify such trucks as a “Fleet Unit” in any ads.
Reputations – Be prepared to offer a fair deal, and remember that your personal reputation will affect selling prices. Says AYR Motor Express president Joe Keenan: “When we sell a used truck, it has to be a good vehicle in order to have repeat customers.”
Warranty – “You definitely want to point out if there’s any warranties that are still available and that could be transferred to that next user,” says Mike McMahon of Ritchie Bros.
Genuine parts – Repairs using genuine parts reflect that you care about quality and safety, says François Desrochers of Freightliner’s Globocam dealership in Montreal.
Clean up your act – If trucks are going to be sold at your facility, make sure the building and surroundings leave the same impression as the truck being sold. Clean, well maintained, and orderly.
Renew your pictures – Nothing says “nobody wants me” like a summer ad that features the picture of a truck parked by a snowbank.