I need to make a business decision.

[Tobin S.]

I'm going to buy a semi trailer soon. I've gotten that far in the decision making process. Now the choice is between buying a new one or a used one. I can get a new trailer for about $25,000. I will probably be able to negotiate a slightly lower price, but we'll just go with that figure for now. I can get a 2005 model trailer for about $10,000, and as far as the age of the trailer goes I wouldn't want to go any older than that. I see older trailers out here all the time and I've hauled a few old beaters. You really start to run into a lot of problems with older trailers. We're talking brake drums, electrical problems, air line problems, weak floors, sliding tandems that won't break free, and leaky roofs.

With a new trailer, I won't have to worry about maintenance for a couple of years and probably won't have to deal with any breakdowns unless they are of my own doing. Of course, the payment will be twice as high compared to a trailer that's 5 years old. I will have more maintenance issues with the 5 year old trailer, but if I have a lean month that lower payment will be easier to come up with.

I can afford to go either way. I'm leaning toward buying a used trailer, but it sure would be nice to have a new one. Do you see another angle here? Let me know if you do. Renting or leasing a trailer is not an option. I'm doing that now and I don't want to do that anymore.

[petronius]

1. Your truck was used, right? I don't know what the service lives are for these things,

but if you buy a used trailer do you run a risk of having major maintenance issues occur simultaneously?

Also, do clients care about the age of the trailer?

[Tobin S.]

6. It's not likely to have a maintenance issue on both vehicles at the same time

But it can happen. Usually when that kind of thing happens the truck was in a wreck. But having them break at the same time wouldn't be one of my worries.

Customers do care about the age of the trailer, especially the dock workers who have to drive forklifts in them. I'm thinking about buying a 6 year old trailer or newer so the age wouldn't be a factor as long as the trailer is in good shape.

[JustABozoOnThisBus]

2. Have the used trailer checked end-to-end

Get an estimate for the additional cost to bring it up to "near-new" condition.

It'll probably still be a better deal than the new one.

:hi:

[Tobin S.]

7. If I were to do something like that

I doubt I could negotiate it as a part of the deal. It would mean probably having a big maintenace bill before I even use the trailer. I can swing a down payment right now, but I'd like to keep as much cash on hand as possible for emergencies.

I guess I could do it on credit, but I'm trying to avoid that kind of thing, too. But I think you are right in that the overall cost of doing something like you suggest would be cheaper in the long run.

[blaze]

3. I'm guessing that trailer value depreciates... just like cars?

So the minute you drive it off the lot, you're already down $xxxx?

I totally get the allure of a brand new vehicle. At 56, I just bought my first, ever, brand new car. Something I swore I would never do because it just didn't make sense financially. But, as I approach retirement, I also saw it as a now-or-never event and I have to say I love having all the bells and whistles and warranties... The fact that my home will be paid off in eight months also played into my decision. :)

Only you know what you will be comfortable doing... but congrats on getting your own trailer, which ever way you go!!!

[Tobin S.]

8. That's probably right

But I do not know the extent to which semi trailers decline in value right after the purchase. I know for cars it can be as much as 20%.

I'm not too worried about that, though. I plan on having the trailer at least until I have it paid for and beyond that if it is not costing me too much in maintenance. I can also depreciate the vehicle on my taxes to write off the cost.

[wain]

4. as a small business owner

do you have an accountant? Have your accountant run the numbers to compare the tax benefits of letting Uncle Sam share the depreciation costs between new and used.

[Tobin S.]

9. That's a good idea

I do not have an accountant, but I have been planning on getting one. Now would probably be a good time. I just went into business in July, btw. I'm pretty good with numbers, but I should probably get someone who does that sort of thing for a living to be sure the job is done right. It could save me a lot of hassle in a variety of ways.

[elleng]

5. For me, difference in # maintenance issues and breakdowns would be the answer,

but that's me, couldn't tolerate such.

[Tobin S.]

10. I know what you mean

Breakdowns can cost you a lot of money, not only for the repair, but also with lost productivity if it's going to put you out of commision for a little bit. Thanks for making me think of that.

[elleng]

11. You're welcome, Tobin.

For me, its the aggravation! MUST have a car that works, that's that! and my problems have to be repaired by AAA!!! TOTALLY different from your concerns!

[av8rdave]

12. The one thoughtnthat comes to my mind, FWIW....

How much could possible down time cost if the older trailer is in the shop?

[Tobin S.]

14. That's a good question and ellen reminded me of it above

I could lose a week's pay for a major breakdown on a trailer. Possibly more.

[KurtNYC]

13. can't you lease one ? why own

seems like even a new one could have an issue that would take it off the road for a while. If you lease then you should get a replacement if there is an issue like that. And the full cost of the lease is a biz expense right now -- versus depreciation, etc.

[Tobin S.]

15. I'm renting one right now that's 5 years old and paying as much for it

as I would pay for a new trailer. I am also responsible for all of the maintenance on it even though I did not get the trailer new. I'm going to need new tires pretty soon and that will probably cost about $2500. I'm just having a hard time putting all that money into a vehicle that I will never own.

[MilesColtrane]

16. I'd buy new.

More peace of mind performance-wise.

I second the recommendation of getting a CPA who has experience with self employed clients.

[RandomThoughts]

17. Not sure about that decision, that is a decision for you.

But there is a song that you might want to hear Tobin, it fits many situations. But I think also your situation of getting a truck, and following a dream :)

Thanks for the stories, and good luck on what ever you decide on the trailer issues.

Your stories remind me of when I went on the road :)

St. Elmo's Fire (Man in Motion)
http://www.youtube.com/watch?v=jVf4_WglzWA

:loveya: