April 27, 2020
Replacement cycles of work trucks are all over the board. While some swap them out before operators even get comfortable with the truck, others choose to hold on until the truck has dug its’ own grave. While there are pros and cons to both approaches, its’ best to find that sweet spot in the middle that best works for your fleet of work trucks. Whether you have two or two hundred work trucks, the pros and cons are universal.
Short Replacement Cycle
Some business owners like to maintain that new truck smell and choose to go with a short replacement cycle. All jokes aside , there are some substantial pros (and cons) to this replacement strategy.
- Appearance – Generally, the less time a work truck is in service the better it looks.
- Operator satisfaction – No operator likes to climb in a truck that pre-dates them in age.
- Resale value – The less miles and/or hours a work truck has on it, the higher the resale value potential.
- Warranty/maintenance – Vehicles will be less likely to go past warranty coverage thus a reduction maintenance and repair costs.
- Configuration adaptability – Your services can change over time, replacing vehicles more often gives you more opportunity to align the vehicle with the job of today (and tomorrow).
- Acquisition costs – The more you replace, the more acquisition costs begin to accumulate.
- ROI – To make up for the short vehicle life cycle, that vehicle will have to bring in exponentially more revenue.
- Customization – Customization of a vehicle is beneficial but requires time and money. With a short replacement cycle, customization can be prohibitive.
Long Replacement Cycle
We all know these types. “Drive them ‘til the wheel fall off” is a common phrase amongst those who believe in long vehicle replacement cycles. See the pros and cons associated with this replacement strategy below.
- ROI – Compare a truck lifecycle of five and ten years with the revenue each creates. Imagine in a ten year period, buying one truck at $40,000 (ten year life cycle) or two trucks at $80,000 (five year life cycle). ROI looks pretty promising with ten years.
- Customization – The longer it stays in service, the higher the probability there is for customization. Because you wait so long for your next work truck, you will want heavy customization to tailor fit the truck for the application.
- Maintenance/repair – The longer you keep it in service, the more maintenance and service costs will begin to add up. These costs can significantly diminish ROI at times.
- Uptime – With maintenance and repair comes decreased uptime. If your truck isn’t working, it isn’t collecting revenue either.
- Appearance – A rusted work truck with your company logo on the side isn’t the best first impression. Remember, your truck is a rolling billboard for the business.
- Resale Value – A work truck with 200,000 miles will yield little resale.