New vs used equipment and trucks

Discussion in 'Business Operations' started by BLC1, Mar 30, 2014.

  1. TPendagast

    TPendagast LawnSite Fanatic
    Male
    Posts: 7,563

    in your current situation, check and see if leasing some replacement trucks might work for you.
     
  2. Locqus

    Locqus LawnSite Senior Member
    from Detroit
    Posts: 708

    I usually go used and used if I can. You do have to do your research to get a decent piece of equipment used, but they are out there. I picked up an '08, f250, 50k, with v blade for $16k and a great bobcat hydro wb for $900. Best two things I have found. Course I have gotten bitten a couple times, but part of the game and in the long run I hope it will be cheaper, has so far. Always feel a little guilty beating the hell out of something new.

    If I had the means I would buy new and keep it forever.

    The new X-One was pricey as hell, but its pretty awesome lol.
     
  3. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 871

    In the process of obtaining my wholesale car dealers license. Want access to the auctions for fleet purchases.
     
  4. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Posts: 1,536

    That's a great idea.

    We paid 26.xxx for our last 2, 3/4 ton work trucks with 0 miles. When I analyzed life cycle cost of our fleet for the past 5 years, some bought new and some used, I've found it cheaper to run new until any repairs start, then trade and start again.
    Posted via Mobile Device
     
  5. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 871

    Stole the idea from a friend who owns a concrete restoration business. He has similar truck purchases to me and its worked for him.

    Buying vehicles at wholesale rates will be great - not having to pay the 7% sales tax is an extra bonus. 26k truck will save $1820 in taxes.
     
  6. Bryan27

    Bryan27 LawnSite Member
    Posts: 148

    Not sure how you plan on getting around the sales tax? Please explain... Are you planning on running around with dealer tags on all your landscape trucks? There are probably small businesses that do what you are thinking of doing, but if it were as easy as getting a wholesale license, and it was legal, every large company would be doing it. Ask your insurance agent how much it's going to cost you to carry dealer liability insurance on a fleet of trucks, trucks that will be owned under dealer license but used by a landscape company for regular work.

    I'd suggest going to an auction with your friend and pay him a couple hundred bucks for using his wholesale license, pay the sales tax and write it off. You won't have to look over your shoulder that way. It is different in every state, but most states don't just hand out dealer licenses to anyone, there are criteria that need to be met to get the license and also to keep it.
     
  7. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 871

    The new car dealer LLC acts as an leasing company. Trucks still get plated as usual.
     
  8. rbljack

    rbljack LawnSite Senior Member
    from Texas
    Posts: 702

    Just a small time guy here, but im working towards new equipment. Not saying I haven't bought used, but trying to get to where all equipment is bought new by me. That way, I know the history and care of each piece of equipment. Making my own repairs when possible. I also try to have back up equipment so when a primary piece fails, im not dead in the water.

    For trucks, I got a used truck with 179 k miles at the moment. BUT, its a clean truck and in my opinion, a clean appearance is important. Not saying it has to be a 30, 40, or 50 k shiny new truck. I also have my chevy avalanche (as back up) if my work truck was to fail and need to be in the shop. If my trailer fails, I can borrow a friends 5x10 at a moments notice.
    Id rather have new mowers and used trucks, that are reliable. If the truck started becoming a money pit, I think I would be looking for a replacement. With good preventative maintenance, 200k out of a vehicle is possible without too much downtime along the way.

    From my signature below, I bought the following pieces brand new:
    The exmark 30, the Honda HRC, The Husky 21 inch mower, the Stihl 600 blower, and the Stihl HS81 hedgetrimmer. With a little luck, this years new purchases will be a Stihl 100 or 130 Kombi (to provide additional back up) and a Stihl Pro Grade Chain saw. Also considering my next mower purchase. Undecided on a walk behind, stander, or ZTR....jury is still out....but it would be new unless a great used deal came along.
     
    Last edited: Apr 1, 2014
  9. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Posts: 1,536

    Sure you're aware that lease payments are subject to sales tax. But at least you're not double paying it by owning the leasing co. We looked into creating a separate leasing co but chose not to as the value of the asset protection wasn't worth the extra 7%.
    Posted via Mobile Device
     
  10. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 871

    Correct - you wouldn't save the true 7%. You would be paying tax for the length of the lease rather then all up front. Wholesale truck buying will be the biggest benefit.

    May find out it is to big of a pain - Relatively low cost in setting up the LLC, getting the bond and insurance. 3 vehicle purchases over the next 6 months should be a good test.
     

Share This Page