4 factors driving vehicle purchases

In the Know is a monthly partnership between LP Gas and Propane Resources. This month, Obie Dixon shares what is influencing the purchase of new and replacement vehicles.

QUESTION: What is driving decisions to purchase new and replacement vehicles?

ANSWER: If someone poses the question to you, “Why did you buy that new bobtail or service truck?” The answer may well be, “Many different factors went into my decision.”

We’ll focus on the following, realizing there could be many more reasons to purchase new or replacement vehicles.

Aging fleet: Your aging fleet is always a major factor in the purchasing decision, and it’s one of the most difficult. Looking closely at your existing fleet, one of the questions you must examine is, “Are my repair bills starting to add up because of the frequency of shop time?”

In today’s market, it may be advantageous to sell your existing fleet for a higher value. (Photo: LP Gas staff)

Having a bobtail in the shop for a few days in July is different than a bobtail in the shop for a few days in January. A repair bill is something tangible to measure. Downtime is intangible but very important in determining what a repair actually costs.

In today’s market, it may be wise to take advantage of the increased value of used vehicles. New bobtails and service trucks have gone up in cost significantly over the past three years but so has the value of your used bobtails and service trucks. Now may be a good time to evaluate the cost of buying new and the ability to sell your existing fleet for higher value.

Additional business: Additional business should factor into the decision. As you add customers, you get to the point of needing to add more employees to support the additional customers. If you need an additional driver to handle new business, it probably makes sense to have a vehicle for the new person to operate. This is a decision each business must evaluate and recognize where the tipping point is on an additional driver and/or equipment.

Tax incentives and the availability of state or federal grant money: Sometimes the government, both state and federal, offers incentives toward “green” energy for certain technology.

We have a distinct advantage working right in the middle of the green energy sector. Some states still have funds from the Volkswagen settlement, and some states offer grant money that could help pay for a new bobtail by up to 50 percent. Stay informed on what your state offers, and make sure you’re taking advantage of any and all incentives.

Good business year: A good year is always reason to celebrate by putting money back into your company. You can, and should, pay out bonuses and bump pay. But when you buy new bobtails and service trucks, your employees will be appreciative. A new bobtail and/or service truck will boost morale with your employees.

As always, the decision is ultimately yours to make. We always suggest gathering all of the information and options available to you with regard to vehicle purchases and then making a well-informed decision that benefits you, your employees and your business.

Obie Dixon is the director of special projects for Propane Resources. He can be reached at 913-262-8345 or obie@propaneresources.com.