Should you buy a new or used shredding truck?

by Shred-Tech on Jul 22nd 2022

Should you buy a new or used shredding truck?

Should you buy a new or used shredding truck?

The answer to that question is usually determined by personal preference and/or capital constraints. The bottom line is that there is no right or wrong answer, as each approach has its pros and cons.

There are a few factors to consider before making this decision. Think about these questions and how confident you are in your answers.

1. Is a new shred truck in your budget? Can you afford a new truck payment? Ideally, a new truck will give you the peace of mind and ability to focus on running the business without having to worry about surprise repairs that can directly affect your cash flow. If you experience quick growth in the business/company, the new truck will typically be more reliable, providing one less thing to worry about as you grow your business. 

2. Are you mechanically inclined? If you are, then purchasing a used shred truck is not such a risky situation, as you will have the ability to perform potential repairs yourself and save in some costs. However, larger repair costs will put stress on your monthly cash flow and ability to grow the business quickly. 

3. Are you adding mobile shredding to an existing business as another source of revenue? If so, then this decision will likely be viewed differently. Is the truck purchase for tax reasons? Do you have a plant-based shredder that can help mitigate potential mobile shredder failures if the chassis breaks down? Do you already have a loyal customer base? Will they be understanding and wait for you to repair your mobile shred truck? 

4. Are you able to quickly respond to a business opportunity? Shredding has a very short sales cycle, which means the company that can respond the quickest at a good price will most likely win the business. Keep that in mind; a reliable truck means you can be a reliable service provider to your customers. 

5. Have you considered the difference in interest rates if you are financing? Used trucks often come with less term and higher interest rates, meaning your payment could be just as much as purchasing a new truck monthly. 

6. Is the used shred truck going to be covered under any warranty? Most often used trucks are sold as-is/where-is. This means you, as the buyer, are responsible for all repair costs. New trucks come with a warranty and added peace-of-mind. Sometimes you can add an extended warranty package through a dealer network, depending on the age of the vehicle, but not necessarily if you are purchasing it through a private seller. 

7. What will the shred truck be used for? Will it be a backup truck to support your fleet? Will it be used daily on a route? The reliability question becomes more important if you are likely to use the truck more frequently than a backup or an as-needed overflow option. 

8. What is the life cycle for the truck that will be purchased? How long do you plan to keep the newly purchased truck? Keep in mind that re-selling a 10+ year old truck can be difficult as most financing companies will not finance a truck of that age. However, a new unit will be easier to sell or trade-in after 5 years of ownership, assuming the proper maintenance schedule from the OEM has been followed and a desirable model was purchased. It’s important to factor in the opportunity cost of selecting either a new or used shredding truck and to think long-term with the full life cycle of the equipment in mind.

The advantage of buying new equipment is that you are purchasing the latest technology, which often equates to higher efficiency and higher productivity. New equipment warranties offer peace-of-mind in knowing that you’re less likely to face unexpected repair costs during the warranty period. From an environmental standpoint, new trucks burn much cleaner than the older diesel engine.

When purchasing new equipment, take these items into consideration:

1. If designated as a non-CDL, was it built that way at the chassis factory, or did the body builder “re-rate” the GVW? This can pose a problem when registering in certain states. 

2. Does the new chassis meet the current Carb Compliance requirements? These standards are new and are required in certain states. 

3. How will the truck be supported if something does go wrong? How is the warranty process handled by the vendor?

The primary advantage of used equipment is the purchase price. The original owner has taken the bulk of the depreciation. In some cases, you may be getting a time proven workhorse, and in other cases you may be inheriting someone else’s problems. When buying used equipment, pay particularly close attention to the chassis condition. An aging chassis can accrue the highest repair cost of the mobile shred truck and typically account for more than 2/3 of the problems.

When purchasing used equipment, it is important to:

1. Get an ECM report, engine blow-by test, and full safety inspection done to the chassis. 

2. Visually inspect the truck yourself where possible. If doing a video call inspection, ask to be shown the areas that need work or are “areas of concern” as you go around the truck. For both parties, full disclosure is important. Does the truck need new tires? New brakes? New knives on the shredder? Be sure to ask for the condition of all wear and non-wear items. 

3. Run the shredder long enough to get the hydraulic oil up to temperature and assure all systems are working properly. Check for signs of leaks and listen for unknown noises. 

4. Make sure the truck has a clean title; banks will not likely approve a loan (and we can’t take it in on trade) if it’s a salvaged title. Also ask to see if there is a lien on the vehicle that needs to be removed prior to purchasing.

On-site document shredding operators periodically upgrade their equipment to keep up with the ever-increasing demand for secure mobile shredding. Used shredding equipment, such as used shredding trucks, if properly vetted, can provide excellent opportunities for entrepreneurs to start on-site shredding companies at reduced costs, or for existing companies to grow their fleet at a smaller investment.

No matter your preference, we got you covered! Shred-Tech offers both new and used shredding equipment. Talk with one of our experts today to learn more at 1-800-465-3214!