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5 Things You Need to Know Before Buying Used Equipment

Learn about what you need to know before you buy used equipment.

Episode 217: Buying used trucks and trailers are part of being in the trucking business for many fleets and owner-operators. What are the top 5 things you need to know before you buy used equipment? 

My guest today is Bryan Johnson a Sales Consultant at Arrow Truck Sales.  

Bryan Johnson is a Sales Consultant at Arrow Truck Sales.  In this episode, learn about what you need to know before you buy used equipment.

Bryan is a servant leader, who believes in energy is everything. 

Guest Website: ArrowTruck.com

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Transcript of Episode:

Jamie Irvine:

You’re listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine. And this is the show where you get expert advice about heavy-duty parts that keeps trucks and trailers on the road longer while lowering cost-per-mile. Buying equipment, trucks, and trailers, it’s part of being in the business of trucking and for many fleets and owner operators that involves sometimes buying new, sometimes buying used, what are the top five things we need to know about buying used equipment right now in 2022? My guest today is Bryan Johnson. He’s a Sales Consultant at Arrow Truck Sales. Bryan is a servant leader who believes in energy is everything. Bryan, welcome to The Heavy-Duty Parts Report. So glad to have you here,

Bryan Johnson:

Jamie, thank you so much. It’s a pleasure to be on here. I’m super excited to talk about heavy-duty parts.

Jamie Irvine:

Well, you know, part of the business of keeping trucks and trailers on the road is sometimes you have to make a change, right? Sometimes a truck is just no longer viable to keep and you gotta sell it, get rid of it, you wanna buy something new or you wanna upgrade, but buying brand new isn’t always an option. So how are inventory levels right now? We’ve heard in the news about how it’s been so difficult to produce new vehicles, because of all the parts shortages. This has caused prices on used vehicles to go way up, what’s inventory levels like right now?

Bryan Johnson:

You know, Jamie, you’re exactly right on that topic of the prices holding their value and, and the creation of new products is very slow. Everything’s backed up on docks and we’re all hearing it. The COVID pandemic has put us through that inventory right now, it’s somewhat on the lower level and it’s holding its value, but we’re constantly turning inventory over and over again with, at Arrow Trucks, with the 18 locations that we have, our buyers are heavily buying, constantly buying new new products or used products to put on our lots and feature.

Jamie Irvine:

New to them, right?

Bryan Johnson:

Exactly. And we have a little bit of extra buying power when it does come to that. Having so many locations here across the US and Canada.

Jamie Irvine:

Well, and that’s kind of an important point, isn’t it? I know on the parts side of the business, expanding your supplier network is such an important part of having a successful strategy for just finding what you need. So if you find yourself in that position where you realize, you know, I’ve gotta do it, I gotta buy some, some used equipment. I gotta expand what I’ve got or I’ve gotta replace something. Maybe it got written off in an accident or something like that. What’s the number one tip that you give people when they’re preparing to buy used equipment?

Bryan Johnson:

You know, number one tip is it’s not, if it’s gonna break down, it’s when. They do break down. They’re used trucks. They’re meant to haul, they’re meant to go to work, but they’re also meant to produce revenue. So being a depreciating asset already off the lot, you want to know what is it gonna do? How is it gonna produce that so that it is gonna generate revenue for you? So I’d say, you know, the number one thing is knowing that yeah, it’s gonna break down. So just being prepared.

Jamie Irvine:

I think that’s an important point because when you’re, you know, when you are buying a new piece of equipment, you’ve got that OEM manufacturer warranty for a period of time, you buy a used piece of equipment. And the reality is that it’s not just the purchase price, is it there’s gonna be some other expenses related to maybe fixing some of the things that need to be fixed or rigging it up for the application that you’re gonna use that piece of equipment for. So it is really about preparing ahead of time before you end up on a lot, looking at a truck.

Bryan Johnson:

Yep. A hundred percent.

Jamie Irvine:

So is there any best practices that you can share with us that will help buyers to search for the right piece of equipment? So we’re at that stage where, okay, we know we need to buy something. We have a budget in mind. We’ve got a little bit of extra just in case there’s some repairs that need to be done when we buy that vehicle. What do we do to really ensure that we can track down the right truck? Because you know, you spend all that money, you want to have a truck to your point that can go to work and make you money right away.

Bryan Johnson:

Right. And looking for that high-quality return on your investment is basically what it is because it’s a business and you basically live in that business as well. So it’s kind of unique in that situation and understanding that. So I think there needs to be, it’s like when you’re buying a home, what is the most important things to you? What is like some must haves, you know, I need to have an APU unit in my semi, because I’m traveling in colder climate, you know, I’m on the ice roads or whatever, you know, so you need that, those certain things. So I like to ask the client, you know, what are some very specifics or must haves that you have to have within that truck? And then it goes from there, you know, then it’s up to your preference as make, model, you know, are you specific to Volvo? Are you specific to Freightliner? Do you love Peterbuilt? What is it, what engines? And then we go on from there.

Jamie Irvine:

And the guys who run Kenworth and Freightliners are just screaming. Like what about my trucks?

Bryan Johnson:

They’re all part of the puzzle too.

Jamie Irvine:

And the poor six Mack guys that we have listening.

Bryan Johnson:

Yep. I love the Mack trucks.

Jamie Irvine:

They’re coming a long way. Aren’t they? Those new Macks are beautiful trucks. I’ve seen some of the pictures, I got a regular follower of the show. He’s a parts person for Mack. And he always shares with me some of the new equipment and it’s pretty impressive stuff. I always thought of the Mack trucks, you know, as those vocational work trucks, cement trucks, and, you know, dump trucks and things like that, but they’ve come a long way into expanding their line. So it’d be interesting to see once those tough work trucks end up being used and you get to sell them.

Bryan Johnson:

Yeah. Anything with the bulldog on the front end. I love that.

Jamie Irvine:

That’s right. That’s right. Yeah. So, okay. So I get your point, you know, at the beginning you gotta make sure you got the budget. You gotta understand what your must-haves are. You probably have a few kind of like, I’d like to haves, let me ask you something, back in the day, you really had to rely on the dealerships. You would have to go there and talk to them and kind of search around what they had in their inventory. But with technology, now we have this ability to go onto websites like yours and to see a lot of different trucks without ever leaving the comfort of our own home or the truck we’re already driving. So once you think you found a truck or trailer that you wanna buy, what’s the next step? What should people do? Maybe tell us what they should do. And is there something where people make a mistake there?

Bryan Johnson:

Yeah, that’s a good point. It’s just knowing where you’re at, finding the exact vehicle, the exact truck that you want and then how much are you, do you have set aside to put into this investment, so that, you know, that it’ll go to work for you, that it’s gonna create and generate revenue, um, whether it’s gonna be something that you’re gonna finance or you’re gonna pay for it, you know, straight up with cash, um right. You know, and, and knowing those, you know, where your, your personal numbers are at and then finding the right vehicle, that will make sense. So that, you know, you know, that you have this payment, you gotta pay every month for that vehicle, but you’re gonna be generating the revenue. That’s gonna surpass that.

Jamie Irvine:

Yeah. What does that payment do to your cash flow statement?

Bryan Johnson:

Right, exactly. A hundred percent. So that we know when you are driving it off the lot, it’s gonna go to work for you right away.

Jamie Irvine:

Right. Right. So is that something that a person, I guess it’s a little different in Canada because of the different financial regulations that we have, it’s different than in the states. So down in the states, if someone is going to handle that financing themselves, they’re obviously going through a lender that they’re comfortable with. Do you recommend that they shop that competitively with what maybe the dealership could offer before they make a commitment?

Bryan Johnson:

So my recommendation on that is if you have a lender that you’re comfortable with, you can bring in your own lender and then we can work together with your lender. We do have here at Arrow Transport Funding, which is our top lending company. But they specialize in the main focus of because we’re buying these trucks here at Arrow, we’re buying them for a reason to sell them back to you, to get them on the road, to do what they’re meant to do, haul things and make you money. So when they come in, they go through a pinpoint DOT inspection and the engines get clean. Everything gets DOT inspected to become DOT road ready so that when you do purchase it, we hopefully are avoiding any hiccups along the way of getting you started to producing that and generating that revenue. So hopefully that helps explain that a little bit better.

Jamie Irvine:

Yeah. You wanna make sure that, I always think it’s a good idea to look at your financing options, right? Because there is big differences sometimes in the upfront cost versus what the whole thing’s gonna cost you by the time you’ve done paying for it and paying attention to those details is important. And, you know, it’s probably a good idea to rely on someone like you to be able to provide a bit of guidance in that. We’re gonna take a quick break. We’ll be right back.

Don’t have a heavy-duty part number and need to look up a part? Go to parts.diesellaptops.com, or download the app on Apple or Android to create your free account. Looking for high-quality fuel injection for heavy-duty applications? Having one supplier for fuel injection allows you to better serve customers by providing them with a complete line, which increases your sales and profitability.Learn more at ambacinternational.com/aftermarket. We’re back from the break. And before the break, we were talking about the top three of our five tips that you need to know before buying used equipment. Bryan, glad to have you here with us. So let’s talk a little bit about the best way to ensure rather that you get a fair price. I know that right now, the price pressure in the used market from all of the supply chain issues, the lack of new vehicles, the whole landscape has really, really changed. Is there a way to ensure that you get a fair price or are just, are we at the mercy of where we’re at with the price of used equipment?

Bryan Johnson:

Yeah, that’s a great question. And that’s where it truly becomes a consultation process when a customer comes in and they have this big picture idea and, you know, it’s wonderful. I want to hear exactly what your goals are, what you want to do with this truck. You know, are you looking to get other drivers out there? Is this an investment opportunity? Is this something you’re finally going off on your own from an old company and you’re gonna be hauling on your own. So learning that, and then diving deeper into the situation on what are your numbers, what are you looking at? What are you willing to set aside and put down for this investment? And then running their, you know, credit report. Okay. So this is where you’re at. This is what the down payment requirement is. And then it becomes an option process after that, you know, ideally I want to get you in the truck that you want, but let’s see exactly what you qualify for so that, you know, this truck will go to work for you and you can afford it.

Jamie Irvine:

Yeah. There’s a difference between what you want and, and what you need. In the parts world, my mentor always said, ‘Jamie sell ’em what they need, not what they ask for’. So I guess from your perspective, you’ve gotta do a bit of that. And, you know, realistically prices are such right now that maybe the truck that you could have afforded three, four years ago, isn’t the truck you’re gonna buy today, but we can still find you something that you’re gonna be able to put to work and make money. And that’s what’s really important at the end of the day.

Bryan Johnson:

Yeah. And then ultimately bringing the customer back down, this is what it will do for you. Sorry, I can’t get you this W900 right now, because it’s still holding its value at $200,000. You’re approved for a hundred thousand. This truck is gonna do exactly what it can and then next year we’re gonna get you to that W900.

Jamie Irvine:

Right. Yeah. And that’s the other thing too, right? The circumstances we find ourselves in today, it’s dynamic. It’s not gonna stay there forever. Things are going to change. So, you know, as circumstances change, we can adjust. And I guess that’s part of why it’s so important for you as a salesperson selling used vehicles is to build a relationship with all of these customers because things are gonna change and there’s gonna be needs in the future. So you don’t wanna burn that bridge because you want people to come back and buy from you over and over again.

Bryan Johnson:

Yes sir. I mean, one of my favorite sayings out there in the world is the only thing constant is change. So it’s gonna always be changing and we just gotta move along with it.

Jamie Irvine:

Yeah, that’s right. That’s right. So you’ve kind of alluded to it a couple times. This is The Heavy-Duty Parts Report let’s get into a service maintenance and things like that. What do you do at Arrow Truck to ensure that that yes, they are buying a used vehicle, but that they’re not going to have any major problems let’s say in the first 90 days.

Bryan Johnson:

That’s a great question. And that’s where our 90 day warranty. So we have a, every truck that you buy off this lot automatically comes with a 90 day, 25 mile, 25,000 mile warranty.

Jamie Irvine:

I was gonna say, whoa, 25 miles. I barely get off the parking lot.

Bryan Johnson:

You can’t even do one haul, yeah.

Jamie Irvine:

So it’s 90 it’s 90 days, 25,000 miles. That’s your, your warranty. Now you have the confidence in these vehicles to issue that because of that D O T inspection, correct?

Bryan Johnson:

Yes, sir. And I’ll attest to it personally, anytime a new truck comes in, they come in looking beat up crap. You know, dirty. And after that D O T inspection, the engine is so clean looking and the interior of the vehicle as well.

Jamie Irvine:

Right. And I mean, the other thing too is is that usually if there’s something like catastrophic that’s gonna happen, it is gonna happen pretty much right away. Of course you can’t control what the driver puts the truck through. So, you know, I used to sell transmissions for example, and differentials. And I can tell you how many times we would send it out, right. The truck would get put all back together. Three days later, the driver’s been bashing it in a logging road or something and, you know, broke a tooth off the differential or something like that. And it’s like, oh my God. But how many times did we have to step up and help them out and to get them back on the road. And sometimes there was a bit of cost share there, but at the end of the day, the product that you’re selling, you’ve got confidence in because it’s been thoroughly inspected. Your people have gone through it. And as long as there isn’t driver abuse, then that new driver can drive that thing and go make some money. And, yeah, it’s a used piece of equipment. Things do break, but it is nice to have that confidence. Would you say that that 90 day is kind of the average out there? Or is that something that that’s actually above and beyond? What other people who sell used equipment offer.

Bryan Johnson:

From what I’ve seen personally that is above and beyond. I’ve seen others that are 15 day, you know, 90 days is definitely the largest guaranteed automatic warranty that we’ll put on there. And that’s any truck that you’re driving off of our lots. And then we also do extended warranties as well that you can purchase above and beyond.

Jamie Irvine:

Right, if you need that little bit of extra security, I could see that extended warranty could be important too, because hey, let’s face it, if you don’t have the 50 grand to replace an engine in six months or something like that, it would be nice to have a little bit of extra coverage. So you can go make some money and build up your reserve so that one day, if you ever do have to go and do a major repair, at least you’ve had some time to build up the cash. So, okay. Give us, give us a tip or something that maybe not, wouldn’t be quite obvious to the average person. Just a bonus tip on buying used equipment.

Bryan Johnson:

I would recommend, you know, doing a little bit of research on your own before you come in. If you’re looking at used equipment and just having a basic knowledge of what you desire before you come in so that when we meet and we do a consultation process, I can suggest right more in your alley or, or an avenue that you can go down, for a semi truck that fits your needs.

Jamie Irvine:

Yeah. So, I mean, if you do a little bit of that preparation, it’s like, okay, I I’ve got some of my finances in order. I have a hit list of things I need in the work truck to be successful. You know, I’ve got a budget range, I’ve got kind of an idea of what I like when they bring all that information to you. It’s not, you know, as a salesperson, you’re not just gonna say, okay, and just take that at face value and go give them exactly what they ask for. You’re probably gonna spend some time digging a little deeper and going beyond some of that preliminary stuff to allow you to really be able to find a solution that works for that specific customer’s needs. I can see why that that’s an important part of the process.

Bryan Johnson:

Yeah. And it’s just, you know, after a consultation, similar to that, it’s similar basic knowledge. You know, how long have you had your CDL? What is the primary items you’re gonna be hauling? Is it flatbeds? Is it dry vans or reefer trucks, you know? So that way, when we’re really digging down deep to the exact semi that you want, we know that it it’s gonna work the right way for you.

Jamie Irvine:

Yeah. A great example of that is that an over the road or like inner city truck that’s tandem-axle is not gonna cut it when you need a triaxle Kenworth T800 to go for a logging or mining application. Right. Those are two very different trucks. So how detailed do you get into things like gear ratios, engine performance in that consultation? Do you go that to that level as well?

Bryan Johnson:

Yeah. I mean, it depends on the client. You know, if it’s a fleet manager, who’s looking for five, 10 or more trucks, but he’s telling me that they’re in the mountains all the time. You know, we’re gonna have to dig a little deeper and, find more information that will work for him or for those individual clients.

Jamie Irvine:

Yeah. That makes a lot of sense. You’ve been listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine. We’ve been speaking with Bryan Johnson, a sales consultant at Arrow Truck Sales, to learn more about Arrow Truck Sales, visit arrowtruck.com. Links are in the show notes. Bryan, I went easy on you, you know used sales car and vehicle sales people don’t always have the best reputation, but you and I got to know each other ahead of time. I thought you were a standup guy, and I thought you could give us some good tips. So thanks for being on the show and representing the good side of selling used equipment.

Bryan Johnson:

Yeah. It’s been a pleasure. I really appreciate it. And please reach out if there’s any, any questions that you guys have, and you were listening to the podcast here.

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