Everything old is (almost) new again: Re-tooled service trucks give dealers another option
Need a service truck? There are a number of options open to you.
You can buy a new one. You can lease a new one. Or you can purchase a refurbished vehicle.
In the past, CTD has written about the advantages of the first two options. This month, remanufactured and reconditioned service trucks and equipment are emphasized.
"Our experience with remanufactured equipment has been good," says Herman Schermer, president of Statewide Tire of St. Louis (Mo.). Schermer buys remanufactured service truck equipment from American Crane Inc. (ACI) of Garner, Iowa.
ACI rebuilds service trucks from the ground up and also refurbishes specific service truck equipment upon request, according to ACI President John Collins. When a truck arrives at ACI, techs remove its body, crane, air compressor, tire hand and other components. They steam-clean the unit's body on top and underneath to remove dirt and grease and then inspect each piece of equipment. "We look for excessively worn parts, cracks, that kind of thing."
The body "is the component that takes the most abuse," Collins says. Sometimes bodies are worn beyond repair and need to be removed from service. "We make that call for our customers." Truck bodies suitable for remanufacturing are sand-blasted, re-welded where needed and then undercoated. "They get all new lights and wiring, and are repainted, reassembled and reinstalled."
Major crane components are sand-blasted, repainted and reassembled with new bushings, hydraulic hoses and bearings. ACI has restored cranes up to 30 years old, Collins says. "There are some crane manufacturers whose designs have not changed since 1965."
Air compressors are taken apart, given new valves and rod bearings, and then are reassembled with new power take-off units, air hose reels and pump and hydraulic systems. ACI sends cabs, chassis, truck engines and transmissions to manufacturers' facilities for refurbishing.
The total cost to end-users, including truck pick-up and delivery, is roughly 30% less than the cost of a new service truck, according to Collins.
Three out of Statewide Tire's nine service trucks have been remanufactured. The dealership's latest truck cost $65,000 -- nearly $40,000 less than what owner Schermer paid for a new truck in 1999 that came "with a little less equipment." Because service truck remanufacturing hinges on the availability of quality truck chassis, Schermer lets ACI know he's in the market for one well in advance. "We'll wait for them to get a good chassis in and then we'll trade." (ACI works through truck dealers to acquire various models.) Statewide Tire plans to replace one large OTR truck, plus a one-ton service truck, later this year.
There's a big difference between remanufacturing and reconditioning a service truck, according to Tom Formanek, sales manager for Stellar Industries Inc. The remanufacturing process is much more extensive, he says.
Stellar reconditions trade-in trucks and sells them on the secondary market. "We go through and test all the equipment and either repair or replace as needed." The company also switches equipment from truck to truck if customers want.
Piedmont Service Trucks has a similar reconditioning program that brings truck chassis and equipment up to "operational status," says Jeff Edwards, Piedmont sales manager. "The only thing we don't do is engine work on newer, diesel engine trucks."
Reconditioned trucks are ideal for "one- or two-location dealers who are upgrading," Formanek says. Most of the trucks that Stellar reconditions are five to seven years old. Some smaller dealers' trucks they work on are 10 to 15 years old. Larger dealers typically turn their trucks over on four-year cycles to keep their fleets up-to-date.
Lower prices make reconditioned trucks attractive to dealers who want to expand their service menu, according to Edwards. "Maybe they've only been involved with truck tires and want to get into OTR service without investing $70,000."
Stellar's reconditioned truck sales dropped after Sept. 11 as customers who would buy them under normal circumstances took advantage of 0% financing incentives offered for new trucks by auto manufacturers like Ford Motor Co. and General Motors Corp. "The value of a used truck is down at least 25%."
When to buy
Most service trucks are refurbished five to seven years into their existence, according to ACI's Collins. "Sometimes we don't get them until they're at least 10 or 15 years old."
Formanek says smaller dealers tend to run their trucks into the ground before replacing them. "Larger dealers project they are going to buy 'X' amount of trucks each year."
Each dealer approaches it differently, according to Edwards. "Some would rather buy a truck in operational condition and take it home. Some want new paint, new decals -- they're willing to spend more."
Saving money is the big issue for Dave Meier, owner of Lignite Tire in Beulah, N.D. Lignite services several large mines throughout North Dakota, where 57-inch tires are the norm. Its fleet consists of one remanufactured truck and three that were bought new. A new truck equipped to handle giant OTR tires costs between $192,000 and $200,000, Meier says. He snagged a remanufactured model for $130,000.
Remanufactured trucks are not quite as good as new trucks due to the cumulative wear and tear they've absorbed, Meier believes. But for the most part, "they perform just as well." He adds he would buy another remanufactured truck.
Warranties are another issue. Most trucks that come in for refurbishing have outlasted their original warranties, according to Collins. ACI's rebuilt trucks come with a one-year, free replacement warranty for defective workmanship and parts. Stellar doesn't warranty its reconditioned units. "It's like buying a used car," says Formanek. However, Stellar does warranty new cranes, tire hands and other components. Piedmont doesn't warranty its used trucks or equipment, Edwards says.