Preparing a medium-duty truck to be sold is a lengthy process. The owner has to fix up the car so it’s in good condition, give it a new wash or paint job so it’s attractive to buyers, transport it to the site, and, sometimes, even negotiate the value with potential buyers.
This process is even lengthier for fleet managers and companies interested in the long term. Planning starts much earlier, long before the day of sale and even before the vehicle reaches a job site. On top of that, fleets must often manage the remarketing of multiple vehicles at once.
To maximize returns during the remarketing process, fleets should purchase medium-duty trucks that fit their needs and will appeal to buyers down the road, properly maintain these vehicles, and find the ideal venues to remarket them when the time is right.
High Values Start with Spec’ing
To truly maximize a truck’s resale values, it should be considered even before the truck is purchased. This means purchasing a vehicle that is built to serve the company’s needs while considering what will benefit a future buyer.
Let’s start with present needs. Spec’ing is important to any fleet operation. If you over-spec a truck, you waste company funds. If you under-spec a truck, you could end up with additional repair fees and a shorter lifecycle.
“Underpowered and undersized units create excessive wear on components, shortening vehicle life as well as reducing resale value,” said George Survant, senior director of fleet relations for NTEA – The Association for the Work Truck Industry. “Finding the best value, and taking all aspects into consideration, will have a positive impact on overall operations. But, bigger isn’t always better.”
Survant noted that maximizing a truck’s value requires buying the most efficient vehicle, and finding the most efficient vehicle requires understanding how it will be used.
“Understanding the application, as well as drive and duty cycle is imperative. Once this is accomplished, a fleet manager can procure vehicles that achieve the required task, while minimizing maintenance costs and maximizing resale value,” he said.
Once a company has narrowed down a truck’s specs to what meets the fleet’s requirements, it’s time to consider value down the road.
Fleets that like to run lean may choose minimal features, such as roll-down windows or manual transmission. But Survant noted that select automatic features that may seem unnecessary in the present are worth the extra investment in the long term.
“Aftermarket buyers are often attracted to features like power windows and air conditioning (AC), and the increase in resale more often than not covers a significant portion of the initial purchase price for these options,” he said.
Charles Cathey, editor - heavy duty truck and commercial trailer data for Black Book, agreed that certain features, such as AC, are necessary for ensuring a high resale value. He also said automatic transmission is a must when writing specs for medium-duty trucks.
Maintaining Value Long-Term
Of course, to reap the benefits of an efficiently spec’ed vehicle, the company must ensure it is properly maintained. This requires regular check-ups and diligence on the part of management, but also requires cooperation from users.
Preventive maintenance will help a company ensure its trucks are working correctly. Cathey noted that an individual should be tasked with inspecting the fleet regularly. This can be the fleet manager if there is one. But for many small businesses, that task falls on the owner.
Whoever is designated with the task should conduct regular walkaround inspections, taking note of any damage and keeping records, which will be of use down the road.
Managing a fleet comes with many tasks, and it can be easy to put off small jobs for later. However, to maintain value it is important to fix problems as soon as they arise.
“A crack in the windshield or bent bumper can worsen,” Cathey said. If small problems are not fixed early, they can lead to more repairs and more costs down the road.
Seeing the vehicles firsthand also allows the fleet manager to establish vehicle use policies that address common problems. Keeping vehicles maintained is not a solo job — it requires cooperation from drivers.
Designating one person to the task of inspecting fleet vehicles may also mean that person is more aware of who drives what vehicle. If damage is found on a vehicle that suggests a pattern of unsafe driving, the person in charge of inspections may be able to talk to the driver about vehicle use.
Cathey said the topic of vehicle care should be considered when hiring drivers, making a history of safe driving even more important when recruiting drivers. Educating drivers on the proper way to care for vehicles through use policies will pay off in the end.
Online, In-Person, Both, or Neither?
Online vs. in-person sales is a common debate within the world of vehicle remarketing. The answer, however, is not black and white. It is important to consider what you are selling and what buyers you want to reach.
Survant notes that timing is important, as certain vehicles sell better at specific times of the year, and at specific parts of the country.
“Knowing how product segments sell both geographically and seasonally can help increase your sales returns,” he said. “For example, 4x4s sell well in the late summer and fall as buyers anticipate poor driving conditions in the winter.”
Finding the most profitable time and place to sell will require research into the resale market. Cathey recommends shopping around the different venues of selling at least a month or two before you plan to sell.
“Rarely do you or I want something and go straight to Macy’s or Bloomingdales,” he said.
Generally, there is no one-size-fits-all solution; employing a mix of in-person and online methods is often the most effective strategy..
Trading in a light-duty pickup truck at your dealer or sending it to a local auction might be convenient, but it may not be the best audience for a heavy-duty truck upfitted with specialized equipment.
What About Specialty Trucks?
Speaking of specialized equipment, the used market for specialty vehicles is changing. Cathey pointed to water trucks, bucket trucks, and boom trucks, which are all popular items within vocational fleets with growing demand.
In the past, these specialty vehicles would be sold used through the dealer, and as a result less attention was paid to resale values.
Instead, many fleets keep these trucks running “until the wheels come off” or, sometimes, long after that. An aerial lift, for example, may not have a working engine, but if the equipment still works it can be trailered to job sites.
But the growing demand for these vehicles is also expanding remarketing options, as more buyers seek venues that concentrate on equipment.
“Equipment OEMs once controlled this market. Today it’s a different ballgame,” Cathey said.
This may require more research, however. A highway striper, Cathey noted, can bring along a high resale value. But this highly specialized piece of equipment would only be useful to a handful of buyers, and it is up to the fleet to find a venue that reaches that audience.
Survant agreed that finding the right buyer is key to getting a good return.
“Specialized equipment has a defined market, and it’s important for sellers to understand how their disposal method can be affected by not having the right buyer in attendance,” Survant said. “These units can bring surprising resale values in the right venue.”
First Impressions Matter
Once a venue is selected and the truck has reached the end of its lifecycle within the fleet, it’s time to prepare for resale.
Any mechanical problems inside or outside the truck should be addressed, of course. But fleets should not forget that a buyer’s first impression is important — especially when a buyer can easily walk past a dirty truck and choose another on the lot.
“Used vocational truck values are higher for visually appealing products,” Survant said. “This may mean different initial build specs and light reconditioning prior to sale.”
Cathey agreed, explaining that even if a truck feels used to the fleet selling it, it may seem brand new to the buyer.
Documentation is also important. As crucial as regular maintenance is, it is not as effective if there is no proof. Cathey stressed the importance of bringing maintenance records, which will give the buyer peace of mind and help enforce a well-maintained truck’s value.
Originally posted on Work Truck Online