View Full Version : New Equipment, Used Trucks
11-23-2007, 08:42 AM
What do most of you do. I try to buy new equipment ( mini ex, skid) because they are what makes the money. I try to buy used trucks because they are the necessary evil to get the job done. That has been my approach to things lately to try to build the excavating side of the business. Now, if I was into the trucking or hauling mainly; I would try to buy new trucks.
11-23-2007, 02:30 PM
For mini excavators and skid steers buying new is probably the best it really seems like mini ex and skids are abused so trying to find good used ones is rare.
When it comes to buying 16 ton and larger excavators buying used is the first option. If a 16 ton machine is your primary machine and you have lots of work a contractor will buy new and have the 3000 a month payment.
Used dump trucks are getting hard to find that are not bashed all to crap so buying new is a option so add to the payments another 2500-3000 a month.
Most excavation contractors that are a 2-3 man operation has monthly payments of 8-10 grand thats just equipment payments that doesn't include fuel and wages etc. Just my 30,000 F-450 I'am paying 700 a month.
If a contractor has two employees wages for them total 7700 dollars for the month. One of the forestry contractors has about 15 employees his payroll for one month is $81,900. I know the equipment payments is more than I want to imagine.
Anyhow if you can buy new do it. I know I won't be buying light duty trucks anything older than 4 years old anymore.
11-23-2007, 11:52 PM
GR makes good points. Buying a used mini or skid steer is hard, most of them are abused beyond belief and the ones that have only a couple hundred hours on them are usually only $2-3K less than a new one. For the bigger stuff, buying used is usually the route to take. We bought a new Cat 312 a year and a half ago mainly for ease of financing. There isn't much in the way of used equipment where we operate, would have been a little bit of challenge to find a used 120 with low hours, but it probably could have been done. We didn't really have the option, we had a huge contract and didn't have time to shop for a machine. For us, buying a new machine made sense. I still would have preferred to get used but with the financing and the time frame we were in, we ordered the machine and had it in less than 2 weeks. Our skid steer and mini we bought new, there is absolutely nothing in the way of used compact equipment around here whatsoever without buying a rental machine and that's out of the question, most are terribly abused.
11-24-2007, 12:43 AM
If you ever go to a Ritchie Bros auction in Surrey B.C. you can see what used Mini excavators sell for. The machines are almost worn out it is amazing how thrashed and abused they are but people are still stupid enough to pay top dollar.
Komatsu is giving the best deals they know there is a market in the smaller guys that run mini excavators.
I agree with the thought process. I believe you have to be pretty dependant on trucking income to buy new trucks. The end results are 12 yards of dirt does not know if it was hauled by an 08 dump truck or an '86 dump truck. The customer does not see a difference either. Trucking is almost aways by the hour, Yellow iron is less so. The advancements are not that significant. The main advantage to newer trucks is less wrenching. Iron is much different productivity improvements are significant and directly effect the bottom line. Those are my thoughts.
11-24-2007, 12:42 PM
This type of talking on buying new or used, makes me want to ask what you guys are bringing home net income-wise as your wages? As a salaried employee of a one man operation, my bills are about 9k a month for insurance, fuel, machinery payments and truck payment and misc. My wages are about 4k/month and going up as my business grows and overhead is reduced. I didn't take a raise for about 5 years and that sucked but I had good equipment. I am not a 6 day a week worker either. I like my time off and have other responsibilities but hope to get more days in this year if the weather cooperates. I have about $5k of expenses above wages and I am chopping away at that as I pay off more equipment and search for better insurance (I pay a whopping $700.mo for all my insurance needs).
Anyway, I have not had good luck with used trucks but as I search for a small dump truck, I think I am going to go in that direction. I just don't want to borrow money anymore unless it is for a new skid which I know I can pay for in 1 day of work per month.
11-24-2007, 11:50 PM
With trucks the new emmision laws might be limiting how many old mechanical engine powered trucks to be on the road. Also fuel economy is another factor. Most dump trucks are by the hour so that does help. KSSS is right about it doesn't matter if the truck is old or new it can do the same job.
The newer excavators I got to use are getting more power than the same sized machine that is say 10 years old or more.
11-25-2007, 12:04 AM
I agree with KSSS. While i don't run a dump, I use the same guy for everything. He's up to about 750k miles and still hauling just fine on a tandem. Old doesn't mean broke if it is maintained but how many people take good care of their equipment? I see some scary stuff around the gravel pits. I think you can get by with used in any application if it is good equipment. I prefer new skids but that's just me. Used implements and some used equipment of other types actual makes sense. I prefer my end of the year bonus to more debt and payments. My wages are steady but my bottom line is what feeds the family and pays off my personal debt. If I want a good bonus, it makes sense to think used which reminds me, better make a decision about a dump truck soon.. I've been wanting one but don't know if it's right for me given the possibilty of an economic slow down. yikes, I hate forecasting!
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