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How can you afford new trucks and equipment?

Discussion in 'Commercial Snow Removal' started by DodgeRam1996, Oct 31, 2010.

  1. DodgeRam1996

    DodgeRam1996 Senior Member
    Messages: 100

    How can you afford new trucks and equipment in this economy (plus all the low ballers)? Do you allocate a percentage of your profit? 2 income family? What's the secret?!?!

    Also, do you feel business stable enough to support your overhead?
     
  2. erkoehler

    erkoehler PlowSite Veteran
    Messages: 3,268

    Combination of choosing the right accounts and making sure that you are profitable year around and not just in one season.

    What are you considering "new" equipment? My personal vehicle is the 2006 Ford, and snow only vehicle is a 2001 that I had up until this summer as my primary vehicle.

    I'm a small and newer company, but as I payoff vehicles I try to move up a couple years and keep a "fresh" and clean look to the equipment.
     
  3. SullivanSeptic

    SullivanSeptic PlowSite Veteran
    Messages: 3,422

    Its difficult. But I have a business during the spring, summer, fall that pays for most of the equipment. The biggest thing is getting equipment and trucks in the first place. Once you have one or two, then you just need to work your but off to keep those making money. Eventually you can step up your equipment. But the bottom line is "working hard AND working smart". Its out there, you just have to really work to get it.
     
  4. Rc2505

    Rc2505 PlowSite.com Addict
    Messages: 1,245

    I take 5.00 per hour for every hour I work, wether it be plowing, or my real business of installing medical equipment, and bank it. Without any weekends, or holidays, I bank around 10 grand a year. That money is only for equipment being upgrades, or even new equipment, then I always pay cash for it and not have to worry about payments.
     
  5. BOSS TOY

    BOSS TOY Member
    Messages: 52

    Purchasing the right equipment is the first step. Understanding the income potential or time saving potential it has is next and then deciding to take the risk. When it is all paid for and still generating revenue it is time to think about what to buy next.tymusic
     
  6. Plowtoy

    Plowtoy Senior Member
    Messages: 929

    THIS IS THE SMART WAY OF DOING IT!!!! If you pay cash for your equipment you don't have to worry about being able to make payments if times do get tough for your business. I also pay cash for my equipment and don't buy anything new. There is a big savings in buying used, even if it needs some repairs, as long as you have a solid foundation (engine, trans, axles) everything else is replaceable
     
  7. nekos

    nekos Senior Member
    Messages: 586

    I use to run used trucks when i first started. I actually find it cheaper to just buy a new truck every 3 years and never have to worry about repairs. There is always something breaking on an older truck and if you are not mechanically inclined, such as myself, it costs $1000-$2000 every time it go's down. Not to mention lost wages when I'm sitting at home not working because my truck is in the shop.

    I wouldn't say buying used is the smart way of doing it. There are a lot of variables, just because used works for you doesn't mean it will for every one else.
     
  8. plowguy43

    plowguy43 PlowSite Fanatic
    Messages: 5,269

    Why not buy a 1 year old truck and avoid the huge depreciation costs? Then if you sell in 3 years you'll get back more money as well since the original owner took the largest hit in depreciation AND you get your warranty (sometime's a better warranty if its a certified pre owned).
     
  9. erkoehler

    erkoehler PlowSite Veteran
    Messages: 3,268

    Used trucks with warranty is where its at!
     
  10. fastxcr800

    fastxcr800 Member
    Messages: 87

    I've never bought new trucks, always been tempted though. However, we are the business to make money, not spend it. I buy used trucks, mostly municipal. They are dirt cheap, and my repair shop maintains them since new. If you maintain equipment, they are reliable and last long.
     
  11. Plowtoy

    Plowtoy Senior Member
    Messages: 929

    I will agree that it is more expensive to pay someone to do your repairs if you cant, all im saying is that new trucks break down too. i used to turn wrenches :mechanic: at a GM dealer and worked on new trucks all day long. I know for the first 36k (about a year and a half to two years on avg) you are covered by warranty, but GM will NOT pay for a rental with a plow or lost income because your truck is in the shop. I also DON'T believe that if you spend $20k on a good used truck (about half the price of an avg new) and it lasts you 6 years, you will have $80k invested at the end of those 6 years (as you would with 2 new trucks in that time. avg $40k each truck). What i was saying before is that PAYING CASH for your equipment is the SMART way to go. Just ask DAVE RAMSEY if you dont believe me
     
  12. MarksTLC

    MarksTLC Senior Member
    Messages: 103

    Right now, I'm seeing a lot of two year leased trucks showing up for sale.

    I've been watching for 2008 Ford F450 (not for plowing). I'm keeping my 99' as a work truck. The Ford will be my daily driver and tow the new 5th wheel.
     
  13. nekos

    nekos Senior Member
    Messages: 586

    I buy the previous year trucks, with all the incentives you can get a $40K truck for under $30K. The asking price on used trucks is ridiculous also. In my area, it's common to see a used 06 F250 with 90K miles on it going for $20K or more. why not just spend an extra $7 or $8K for a brand new one ? Over the course of 3 years it's not hard to rack up $7k in repairs in a used truck so it basically evens out.

    For me buying a used truck is the biggest waste of money. I will settle with my $500 a month payments and trade the thing in as soon as the bumper to bumper warranty runs out. It costs me less in the long run and i get a new truck just before my seats start smelling like ass. :waving:
     
  14. BOSS TOY

    BOSS TOY Member
    Messages: 52

    Sounds like good advice:):
     
  15. erkoehler

    erkoehler PlowSite Veteran
    Messages: 3,268

    How many trucks are you running?
     
  16. hydro_37

    hydro_37 PlowSite Veteran
    from iowa
    Messages: 3,790

    A business can write off new and used purchases too
     
  17. Mdirrigation

    Mdirrigation Senior Member
    Messages: 408

    Why buy new ? I just bought a 751 bobcat with 2 buckets and a plow 1500 hrs , a 2003 chevy k2500hd crew gas with 38,000 miles , and a 2002 excursion v 10 with 40,000 miles ,the total for all three was less than 31 grand , went thru my plow parts and had complete plow for the excursion and bought a frame mount for 400 bucks for the chevy . Thats three pieces on a lot for less money than 1 new 3/4 ton truck. They are paid for , if it snows , great if it doesnt , no big deal.
     
  18. ajslands

    ajslands 2000 Club Member
    Messages: 2,033


    I'm not trying to start an argument (infact I just had a conversation about this with someone) but please define lowballer.


    Oh auctions are good to go to btw.
     
  19. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,382

    I only bought new when we first started getting decent accounts, then a good PM routine and keep things clean. The ONLY way I would buy another new truck is if its MY truck. Too many things can happen especially when the operator's don't care as much as I would. My 06 was bought new and next spring its going to be another crew truck. Hopefully I can find a nice USED C4500 and I can finally get my F350 diesel....well thats my plan for now,lol
     
  20. ajslands

    ajslands 2000 Club Member
    Messages: 2,033

    Good advice! :salute: