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Riding the Lifecycle

TORONTO, Ont. - It's hard to imagine someone else driving your truck, but there will come a time when you want to trade it in for something else. And if you want to maximize your profits, you need to determine when you can collect the best-possibl...




TORONTO, Ont. – It’s hard to imagine someone else driving your truck, but there will come a time when you want to trade it in for something else. And if you want to maximize your profits, you need to determine when you can collect the best-possible resale price, while avoiding escalating maintenance costs.

New highway tractors tend to be traded in within three to four years to maximize their trade-in values, says Kenworth’s on-highway market segment manager Jeff Sass, who was involved in drafting a white paper addressing truck lifecycle costs.

Sure, trucks can last longer than their predecessors thanks to improved technology, but “the general trend line is still about the same on the maintenance costs,” he says. Modern highway tractors can last as long as 1.45 million kilometres, but they’re still machines – and it’s a fact of life that all mechanical things will eventually break.

Some maintenance costs, for example, are simply associated with age. In a truck’s first year, it isn’t likely to require many electrical repairs, but you’ll need to consider headlights, wiper blades and speed sensors after that, the white paper shows. At 650,000 km, you may need a new thermostat and air compressor. And by a truck’s fifth year, you may be facing such work as a suspension alignment, and repairs to everything from the air system to heater, horn, mirrors and seats.

For that matter, consider the cost of the related downtime and service calls. It’s why it’s important to spec’ components that will minimize maintenance costs during the time that you plan to own the truck, Sass says.

There’s an old saying that you get what you pay for, and it’s become an old saying because it’s true. If you choose to cut corners on the wrong components, you’ll watch your operating costs increase, and your trade-in value plummet.

Long-life components that incorporate synthetic lubricants can help reduce regular maintenance costs. Low Maintenance System (LMS) aluminum hubs, for example, can last 500,000 miles between drains without the addition of a lube pump or external filter. And a transmission with a synthetic lube will offer easier cold weather shifts, less drag, and protect gears from excessive wear.

The size of brake linings can also help reduce maintenance costs. A 16.5×5 brake on your steer axle, for example, can offer 60 per cent more life than its 15×4 counterpart. Equally, a 16.5×8.625 lining on the drive axle can offer 50 per cent more life than a typical brake. When spec’d together, the linings may last up to a million miles in a line haul application, Sass adds.

Meanwhile, adjustment-free clutches can compensate for wear in clutch pads. Eaton, for example, determined in roadside tests that 79 per cent of the manually adjusted clutches on highway trucks are out of adjustment.

Still, some fleets recently lengthened their trade-in cycles by as much as a year as a way to delay buying engines that meet the latest emission standards imposed by the U.S. Environmental Protection Agency.

But the next round of emission requirements to come in 2007 is expected to lead to another pre-buy – with fleets trading in their trucks sooner than expected to avoid the new equipment, flooding the market with another round of late-model used vehicles. It’s good news for the buyers of used trucks, but won’t be as welcome if you wait too long before trading in your existing equipment. It’s equally important to spec’ your next truck for future buyers.

When it comes to engine power, more is better in the world of trade-ins, Sass says. Big bore power tends to be appreciated by the purchasers of used equipment, who tend to be owner/operators.

“If fuel efficiency and fuel economy was the most important (consideration), everybody would be running T600s and aerodynamic trucks,” he says. “You see those big long and talls all across the country.”After all, fleets tend to be the source of the lion’s share of used equipment in the marketplace. Equally, bigger transmissions offer a sound return on investment. A 13-speed may cost $1,500 more than its 10-speed counterpart, but it can return an extra $2,500 in the trade-in value, he says. “You can actually make money.”

Lightweight components such as aluminum wheels also demand a premium in the marketplace, offering an extra $1,250 to $2,500, he says.

Quite simply, think about what might attract an owner/operator purchasing their first truck – a key market of used truck buyers. They tend to gravitate toward larger sleepers and engine brakes. And while you may not consider the dual chrome exhaust or stainless steel air cleaners to be important, they could still pay off. To access Kenworth’s white paper on truck lifecycle costs, visit www.kenworth.com


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