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Come on Down!

by Peter Carter

The new emission-control systems on new 2007 diesel engines will add between $7,000 and $10,000 to the price of a new truck. And that's before inflation.
Pretty scary, huh?

And guess what? The price of used trucks, as well, is going to go up when the new ones do. Especially the later model used trucks. So what's an owner-operator to do?

The best advice we can come up with is – if it's that time in your truck's life when the cost of keeping your rig on the road rivals your monthly payments – start shopping around. And buying a good used truck now, might be better than buying one a few months down the road when the new truck prices spike upwards.

First, the price tags of the 2007 rigs will be mirrored by the late-model used trucks. But not until the new year in all likelihood.

Furthermore, as Ron Andrews, who has been selling Freightliners for a couple of decades around Vancouver points out, the very same vehicle might cost you more later in the year than it would right now because the Canadian dollar might go down.

Still there's no evidence that truckers are putting off their used-truck buying decisions. The used-truck business is brisk.
Frank Oliviera of Arrow Truck Sales in Mississauga, which specializes in Volvos, reports that demand for used trucks is healthy; and his counterparts with other dealers echo that.

The only thing that everybody says they need is inventory. Good, new, owner-operator-style rigs.

Oliviera says that sales are particularly brisk in Western Canada, partially because there are a lot of severe-service truckers in the oil patch who don't want to be caught out in the middle of nowhere with broken-down new technology. They don't, he says, want to be the miner's canaries with the new emission-control equipment mandated on the 2007 truck engines.

"If their truck breaks down," he says, "they'd rather have old technology and let the other stuff work its way in."

Still Oliviera says the economy is strong, despite the surging Canadian dollar, and therefore more people are buying and selling more trucks than he had expected.
Most industry observers would agree that the "big change" in emissions technology is not as intimidating as it was in 2002. The industry, comments Selectrucks' Steve Kenny, is more prepared for the 2007 changes. Not as many truckers are concerned about unforeseen problems with their new equipment, no matter what the oil-patch guys are thinking about.

"Last time [2002] it was like all the carriers were a bunch of penguins standing on the edge of an iceflow, waiting to see which one would jump off first. This time, they're not so scared."

Adds Oliviera: "The nice thing this time around is the OEMs have done a good job educating everybody; they feel pretty good about it. People can adapt when they're told to adapt."


So, says Kenny, "now is a good time to buy." He also thinks it's a good time to sell your truck. Because of the healthy interest in buying used, dealers are also on the lookout for good quality, late model used.

"You could put me on the cover of your magazine and I'll be saying ‘come on down and make a deal,'" he jokes.

Another Vancouverite, Ray Dornan, an accountant with the Trucker's Business Group, says successful owner-operators probably won't let a change in technology – a.k.a. the 2007 diesel engine emission rules – dictate business habits.

In fact, unlike the oil guys who Oliviera referred to, Dornan says anybody worried about maintenance problems should focus on new equipment and not let the price tag hike stand in his way.

"If a guy's a town driver, a used truck's not a bad deal but I just got a call the other day from some guy who'd just blown his transmission and he was in Maryland. I don't know about you but the thought of driving a $150,000 truck and having it break down on the other side of the continent is not attractive to me," he says.
"If you're buying a used truck, you'd want to be adept at dealing with repairs yourself. We have one guy who's a mechanic and he always buys used. If he needs a brake job, he does it himself and saves himself a couple of thousand dollars."

And, Dornan adds, "Is a $7,000 increase [as a result of the new emissions control rules] on a $150,000 truck going to be a real deterrent? It amounts to maybe $100 to $120 per month over 60 months."

If you're running so close to the line that an extra $100 a month is going to break you, it's probably time to reach into the pocket of those faded jeans, fish out your truck keys, and hang 'em up.