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Truck Nuts Chapter 3, new verses used

 

NEW verses USED 

Kent Sundling (MrTruck) 10 years of selling new and used trucks.

My favorite debate, been on both sides, bought dozens of used trucks and now I buy new, at least for this year.

Invoice, holdback, 3-4% back of holdback, rebates, 0% interest all means a new truck could be $5000 to $10,000 below MSRP (manufactures suggested retail price) verses a used truck that you have no clue what the dealer took it in as trade or bought at auction thousands below blue book value. On a new truck you can calculate a good deal, on used trucks you’re shooting in the dark if you’re buying from a dealer. If you can find a one owner used truck that didn’t tow with it and has all the maintenance records and is at least 2 years old, you have a case for a used truck. We’re all familiar with invoices on new trucks, not all are real, but generally it gives you a starting place. Invoice minus holdback is what the dealer pays which is 3 to 4 percent off the invoice. Then a new truck dealer gets other incentives if they sell their monthly quota. Then minus whatever the current rebate is and all you have to try to negotiate is the D&H (dealer handling.) Fleet departments don’t charge D&H but it’s hard to get the retail side of a dealership to let it go.  I’m not against used trucks, most of mine have started out used when I bought them. If your budget points you to an older truck then you’ll want to read chapter 6 on “Used Truck Judging 101.”

We have all heard how much you lose when you drive a new car off the lot. The people you hear saying this the most from are the USED CAR SALESMAN. Trucks and cars drop like a rock after you buy them whether they were used or new, that is the wholesale spread. Car dealers make more money on used trucks than new. You don’t have an invoice on used vehicles and you have no way of knowing exactly how much the dealer paid for it. Very few people pay full retail for new vehicles and then there are those rebates. It would surprise you how close the actual sales price of a new vehicle and a one year old one are. And you know the new one wasn’t raced to the airport by 100 different people. I actually know people who trade every year and never change their oil.

Now in trucks, since they have better resale value and generally last longer than cars, can be priced even higher at one year old than new. I have seen that happen often. To see a significant difference, you need to go back 3 years in trucks. Crew cabs 4X4’s are the kings on resale value. In 4X4’s used, can be a whole new experience. Since you won’t know how much off road use it had, a 4X4 can create it’s own payment! It seems that every part on the bottom of a 4X4 truck costs over $2000. If you are the first owner of a truck, especially a 4X4 or diesel and you take care of it, can last you decades for less cost per mile.

Top Five reasons to buy a new truck

  • It’s all new: a new truck has new everything. All you have to worry about is making the payment. The interior is spotless, exterior has no dents and the exterior is all the same color. New tires, new brakes, an engine that doesn’t use oil and it’s quiet inside the cab. A used truck especially older than 3 years, could have a dozen owners. It’s kind of like marrying someone that was married 6 times before you, makes you think about all the previous users. Not all owners do maintenance the same, or use the same oil brand or chase coyotes through the same river. Then there are the states they use salt on their roads in winter or worse using magnesium chloride which eats metal and plastic on your truck. Eastern states owners may drive in the rain everyday, South Western drivers might let the truck set in the sun (120 degrees) for months and crack the paint, curl the plastic grill or dry rot the tires.

 

  • New truck payment: 0% interest or even 3%, new trucks are easier to finance, truck manufactures offer the lowest interest on loans or give you bigger rebates if you finance yourself. Sometimes a combination of the two. My new truck financed at 0% with big rebates, my car financed at 0% interest with nothing down for 6 years. It’s like free money. Now look at financing a used truck. The term will be shorter, the interest will be higher depending on your credit. Now an average on a used truck can be 6% or higher interest, with no rebates and maybe no factory warranty left. If payments are important to you like they are to me, that is the big difference between new and used. If the prices are close, then rebates and lower interest longer term and a new truck can be more than a $100 a month lower payment.

 

  • History: You know how your new truck is used. You know when you change the oil. You know how big your trailer is. On a used truck, you don’t know how many people raced it, how fast or slow they drove (both can hurt it.) Or on a used truck, you don’t know if it came from the last hurricane with rust on the starter, mold under the carpet, new paint and water in the taillights. If the truck you’re looking at has a drop in bedliner, look under it. That’s an old trick to put in a bedliner so you don’t see the gooseneck ball or bed rust. I know many used dealers that take the receiver hitches off so you don’t think it was used for trailering.

 

  • Warranty, roadside assistance: Imagine not working on your used truck on weekends. I use to do that, every weekend I was working on the vehicles or the house. With the 40 plus computers on your truck, just plugging a mechanics computer to your truck will cost at least $80. And if you don’t have the right computer you may not even be able to work on the newer trucks yourself. That was an advantage of buying a used trucks, working on it yourself, but it’s not as easy as it was 10 years ago.

 

  • Take those long cross country vacations: To take the family on the road, you need a dependable truck towing your RV. Anything can happen to a used truck. They are more dependable now. When I was young, changing alternators, starters and spark plugs happened often. I’m on the road allot towing trailers. Brake downs on the road cost twice what they do when you’re close to home. That’s why I started buying new cars, so I wouldn’t worry about my family breaking down on the road when I was several states away.

Top Five reasons to buy a used truck

  • Total price: if the truck is at least 3 years’ old, the cash price should be dramatically lower than a new truck. On a used truck you can look up it’s history with the VIN number at that brands service center. Recalls will be there, dealer repairs will be there, on Carfax you can look up accident reports. You can read reviews we did on the truck years ago and truck forums will give you incite to other owners experience with trucks you’re considering buying.

 

  • Lower sales tax: The lower the cost of the used truck, the lower the sales tax. Generally, license plates cost less on a used trucks. Generally, insurance is lower on a used trucks. Same with parts for your used truck, after a few years, the parts are all available at the parts stores, like NAPA, O’Reilly Autozone etc. which generally are cheaper than a truck brand parts counter.

 

  • Your neighbors won’t think you’re rich: If you’re driving a new $90,000 truck, you’ll be surprised at all the friends and relatives that will want to borrow money from you. Warren Buffet and Sam Walton drove used trucks for a reason. If people think you have money, it bothers them.

 

  • You can crank up the power: Once the factory warranty is expired, you can add all the power modules, headers and nitro, not having to worry about voiding any factory warranties. This is important to those of you that hop up your used diesel for the weekend drag race at the track or pull sleds at the county fair. If you like to modify your trucks suspension for radical off-road use, then an older used truck is up your alley.

 

  • Trucks last: just like the Energizer bunny, if you don’t drive long distances or are a volunteer fireman, you can keep a truck for decades. I have a 46 year old truck, on my farm, most of my vehicles were at least 30 years old. And because the they cost less, you can buy several trucks. Every American should have a truck collection.

Nothing stays the same. Markets change, economies change, my weight changes. With the recession of 2001 and 2008 and that darn 0% financing on new trucks that seemed great at the time, truck buying rules change during a recession and lean toward used trucks. Used trucks get churned over and over at the dealer auctions when things get slow and finely some dealer gets great bargains. One to two year old trucks are still too close to a new truck price. Be sure to check a used truck over carefully.

As with everything, knowledge or lack of knowledge can influence your truck purchase. One thing allot of folks don’t understand, the Consumer Protection Act, which gives you three days to think over the new mortgage on your house, or a loan on the new Kirby vacuum that was just demonstrated on your carpet. If you leave your home and go to a dealership, you don’t have 3 days to change your mind on the purchase contract. The law was designed to keep consumers from being pressured on important loans or being talked into a buying something by the traveling salesman coming to your home. But leave the house and you’re committed when you sign on the dotted line.

First Year Model Truck Blues

2003 has turned out to be a dramatic example of “first year blues.” The Ford 6.0L PS trucks I drove 2 years were great and thought 03 would be a great year for Ford, but that’s the underlying risk of the first year of dramatic change. Ford Super Duties for 2003 had a new diesel engine. Engineers and developers created a new engine and then the corporation accountants (bean counters) got a hold of it and slash part of the component of the engine system to save money.  I’ve driven and pulled with ones that are great and ones with problems, when Sturman Industries designed the G2 injector for the 6.0L Power Stroke and the International VT365, it was great. It had a pre-shot (pilot injection) 2 compression shots and post shot. And then the accountants started deleting components to lower the cost. I’ve interviewed Blue Diamond engineers (Ford and International) whom made the Ford F650 and F750 Mexico and International manufactured 6.0L Power Stroke, they knew the problems where coming with the 6.0L. The engine was well made, but problems with EGR coolers, head gaskets, injectors, control module and the list goes on. This relates to first year blues on new models with several new components.

On the other hand, Dodge in 03 changed the diesel, transmission, frame, axles, transfer case, suspension, steering etc. and that many changes meant real danger in the first year blues, but they came out a champion with few problems. 2003 was a surprising year. This is back then Daimler owned Dodge, Hemi was reintroduced in the Dodge 1500 and their trucks did well. So the first year blues didn’t apply to the Dodge trucks in 2003.

More recent first year trucks, 2015 Ford F150, 2017 Ford Super Duty, 2017 Honda Ridgeline, 2016 Titan XD, 2016 Toyota Tacoma, 2015 Colorado and Canyon, do your research.

I know you’ve heard it before. But we all give in to our emotions. The new model looks so cool you just have to have it! I’ve seen, bought and sold first year models. As hard as the manufactures try to get the bugs out, trucks are very complicated products. It sometimes takes thousands of vehicles in use to find the weak links. Sure they give recalls when most things are discovered, but how many trips to the shop do you have time for? The press releases and reviews you see before and at the introduction of a new truck are usually from the manufactures and do you think they are objective? You’re the one stuck with the payments and downtime, don’t be the Guinea pig too. GM’s first year Duramax diesel was 2001 in heavy duties. 2001 Duramax had problems, 2002 was much better. So on a used truck, do your research, Google “first year” of the truck your looking at and check the truck forums to see what owners are saying about their trucks in a “first year” model.

Gas vs Diesel

I like new diesels, used diesels can be a repair bill. If you are a mechanic, buy anything you want. But for instance, injectors on a GM Duramax can cost thousands after the warranty runs out. Usually after 130,000 miles’ injectors can go. Diesel transmissions can be an unbelievable expense. New diesel trucks generally have a 5 year 100,000 mile drive train warranty. Gas trucks may only have a 3 year 36,000 mile warranty.  Diesel mechanics charge more per hour. Oil changes cost more, we cover the rest of the story in chapter 7.

If you are looking at a gas engine, there are very little differences in price between ½ tons and HD ¾ tons and you get more choices with transmissions and axle ratio’s in HD ¾ ton trucks. HD ¾ ton trucks have a full floating axle with twice as many bearings in the rear axle and are designed to be loaded all the time with heavier springs, frames, shocks, tire ratings, etc. Even the way they ride has changed dramatically in the last 5 years. In the old days, a ¾ ton truck rode like a basketball and needed some weight in the bed to ride better. With used trucks you got to be careful with light duty ¾ tons because they are ½ tons with more wheel bolts and it’s not easy to tell them apart. If you want a diesel, then there are more factors to decide. Trucks can be confusing and most people end up asking their truck salesperson these important questions, and that salesperson more than likely will not know because they just started selling yesterday or last week and if they don’t just make something up to tell you, then they will “TO” turn you over to a manager who will smoothly tell you anything you want to hear. Very few managers in the auto business know anything about trucks, they just know how to smile and manipulate you with, “what can I do to earn your business today” and “sure that truck will pull your trailer, my brother-in-law pulls his with that exact truck.”

I suggest you get an owners manual after you buy your used truck, to know what the recommended service schedules are. Helm is a good place to order you manual. It’s where dealers order theirs.

Truck Brands

When it comes to recommending the best truck, everyone has their opinion and few of us humans let facts get in our way. When I was growing up, my dad had a model 92 Massey combine and my uncle had a John Deere model 95. And of course we thought the Massey had to be the best combine around. Then a funny thing happened. I ended up helping my uncle harvest wheat one summer. I couldn’t believe how easy the John Deere was to grease and work on. Everything you worked on was on the outside where you could get to it. The Massey had everything buried to the inside. Since you always have to work on combines, I was impressed. But you know I never could convince my dad to buy a John Deere! That’s how trucks are. If your grandpa has a Dodge truck, your dad, your brother and your cousins all have Dodge trucks, not much chance you’ll buy a Ford. This is why Toyota Tundra and Nissan Titan have so much trouble capturing market share. Brand loyalty is a powerful force. We become brand blind.

Truck brands keep improving and if you get the latest model, (after their first year). You will like it much better than your old model. Do yourself a favor, when you need a truck, look at all the brands. I did an article for Turbo Diesel Register magazine. They are the big Dodge/Ram diesel magazine. My assignment was to write an article on “why you don’t want to buy a Dodge Diesel truck”. The editor wanted readers to look at options and not be brand blind.

I like competition in diesel trucks and it’s closer than it has ever been, with GM and Ford improving their diesels and Dodge improving it’s body and transmission. So they are all three very close, actually the closes these brands have ever been.  Ram Heavy Duty just passed GM in sales numbers on diesels after GM passed Ram a few years ago with the Duramax. But Ford, which has out sold Dodge and GM diesels combined for over a decade is still #1 in sells by a wide margin. This means you find more used Ford trucks. If you think you need the best truck every other year, get a 2-year lease and keep switching brands.

We cover more on this in chapter 7 but it’s important when deciding between used and new trucks. I’ve updated the time it takes to pay for a diesel engine option with fuel savings from 80,000 miles to 150,000 miles. Calculate how long it takes to pay for the extra $8000 to $11,000 for the diesel option with fuel savings.  It’s easy to get addicted to the power of a diesel. If you tow large trailers or keep a truck forever, the diesel option makes since. But if you trade trucks every 3 years and don’t need the capacity, you may not have paid for the extra cost of a diesel engine, special transmission, more expensive oil changes and fuel filter changes from the extra fuel savings of the diesel option.

A used diesel not maintained properly and over trailered beyond it’s factory weight ratings can be an expensive time bomb. Diesel mechanics charge more than gas engine mechanics per hour, engines, radiators, alternators, starters, batteries etc. all cost more in relation to diesel engines. But a used diesel truck with a pedigree from a one owner pulling moderate trailer weights and service receipts is worth a premium. Some truck owners use the high setting on power chips and micro turners which works them hard to have most of the goody used up. That’s how most of my trucks were when I was done, I stripped them down to the frame and sold them by the pound. Trucks can last several decades, so can the wrong choice.

Comparing Trucks

I believe in long test drives and several of them. (right turn Clive) if you remember Clint Eastwoods “Every which way but loose”, used salespeople will try to have you to turn right 4 times to get you back to the dealership fast. Always remember it’s your money and you are in control. If the salesperson doesn’t want to accept those terms, I borrowed a phrase from Amway, “some will , some won’t, so what, next!”

Always remember to get your money first. You can always take 0% interest from the manufacture financing when available, but be prepared with your own options. Before you get talked into the dealer extended warranties, do your own research. Sometimes your credit union or insurance companies have better warranties. Keep checking back on the latest Rebates, Recalls and Interest Rates, which can change each month.  There are crash tests from the National Highway Traffic Safety Administration http://www.nhtsa.gov/ also a nice VIN lookup section on their website  and EPA mileage on trucks 8500 GVWR and lower, https://www.fueleconomy.gov

One way to look at buying a truck new or used is your future needs. The month I got out of the business, my oldest son rolled his truck and we had to go truck shopping. I had forgotten how hard it was. We started out going dealer to dealer, reading the paper, looking on the Internet and I just tagged along as dumb ole dad playing with my granddaughter. After my son and daughter-in-law got tired of it and after changing their mind several times on which vehicle they wanted, they asked for help. I got on the cell phone and called one of the veteran salespeople I bought from and trusted as a broker. I told him what I needed and then we went and picked it up.

Of course I have the advantage, knowing the dealer cost of vehicles and who to trust. But the point I was trying to make to my kids was, you’re going to buy a lot of vehicles over your lifetime. Find the salesperson and dealer you trust and build a relationship and send them your friends. You still need to do price research to keep everyone honest, it natural for a salesperson on commission to want to make more money. I would think a positive relationship with a dealer you trust would take some of the stress out of something you would do often for the rest of your life.

We all are trying to feed our families and I don’t expect people to work for free. But that’s just me, the older I get the more I can see both sides of any argument.

Should you buy your truck from a New Dealer or a used dealer?

There are several great used car lot’s, ones that have been in families for generations. And there are several that are high pressure, and target you for one big sale. I’ve known used lots that send buyers all over the country buying the last flood, hurricane, hail, tornado damage vehicles at auctions and ship them home for the repaint and rebuild. Ever wonder how used lots have the latest model year vehicles? Manufactures also sell the lemons they can’t fix at those auctions. Watch out for the newer models with low miles thinking there is still factory warranty left. They don’t all have it.
I’ve known a lot of car salesman in my 10 years of being in the business. They make more money working for the used lots. The problem with new lots is, the big ones with the most inventory, have the most “new green pea salespeople”. Which naturally don’t know much about trucks. What do you do? I suggest you do your own homework. Go to the manufacture’s web sites. New dealers have the manufacture behind them on new and usually on the used inventory also. With the factory certified mechanic’s close by, it’s easier to have the vehicle checked out and if the vehicle you are looking at is the same brand they sell new, it can be traced on the factory computer for recalls and repair history. And you can find out if there really is factory warranty left!

Used lots of ill repute will watch you drive away hoping to not see you again nor will they be your friends when the truck breaks down. If the New Dealer is well established, they have considerably more invested in their franchise than the used lot with a 2 year lease on their property. The better auctions that sell the factory program cars from the manufactories lease returns and executive cars usually sell these vehicles to the franchise dealers first at special monthly auctions. Guess who the auctions sell the lemons and wore out trade-ins to? We know that there are good and bad dealers of both new and used. But since the prices are comparable between the two, which one wants your future sales and service business? And if you find unbelievable deals somewhere, what does common sense say?

I learned how to buy the right truck by; you guessed it, by buying the wrong one a few times!  Since my first trucks were used, I had no idea of what the manufactures gross vehicle weight rating or warranty requirements where all about.  I hauled 3000 pounds in my ½ ton, 5000 pounds in my ¾ ton, and 10,000 pounds in my 1 ton. OOP’s, that was probably a little too much. But by then I could replace the starter, alternator, u-joints or clutch with my eyes closed.

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