Capital Equipment News December 2018

USED TRUCKS

Buying a commercial vehicle can be a big investment, especially when times are tough. One way to soften the blow is to look at purchasing used vehicles. However, before you buy a used truck, Scania South Africa advises that there are various issues to consider, and chief among them is taking a good hard look at both your potential purchase and its source, writes Munesu Shoko . GETTING THE BEST VALUE OUT OF YOUR PRE-OWNED TRUCK

T he decision to buy a used primary benefit of buying a pre-owned commercial vehicle is mostly the cost savings. It is for this reason that the used truck market is showing strong growth signs in South Africa this year. One of the noticeable trends in the commercial vehicle sector is the enormous demand for good quality used trucks. Harold Donachie, GM – Used Vehicles at Scania South Africa, says normally the used market enjoys a good run at the expense of the new vehicle sector. It is a different scenario this year, with both new and used heavy duty truck markets enjoying a bull run despite the current economic conditions, especially given the technical recession in South Africa. Scania South Africa has already sold in excess of a thousand used units this year. “From a stock levels point of view, this year we have been running at a third of our stock levels of last year. This means that we have been turning around our stock a lot quicker than last year. The quality of enquiries is also lot better than last year,” says Donachie. Key demand drivers There is actually a shortage of quality used commercial vehicles in the market. So, what’s driving demand? According to Donachie, because of the tough economic truck is sometimes referred to as “smart buying decision” because of the advantages and value for money it offers. The

conditions, customers ought to run their existing fleets a bit longer than in the past. Chief among the factors why fleet owners are holding onto their existing assets is the cost of buying new ones in a tough business climate. This is compounded by the fact that the average monthly kilometres have decreased due to the nature of contracts. Therefore, trucks may be a bit older but they are being replaced with lower mileages. “We also see that, due to the tough economic conditions, rates being quoted by transporters have gone down significantly. It’s becoming extremely aggressive to secure business out there. That I believe is actually one of the biggest contributors to fleet owners looking for used trucks. Whether you are running a new or used truck, the rate is the same. If you can lower the cost of ownership of the truck, you may have an opportunity to earn a bit more money,” says Donachie. What is also creating demand or a lack of supply for used vehicles in South Africa is the preferential currency for export. Donachie reasons that the rand has lost its value at a rate that is very attractive for customers in the rest of Africa. “The rand/US$ exchange rate is very favourable for them. I believe some of the industry players also find it attractive for them to export their used vehicles into Africa with the opportunity to earn hard currency too good to turn down,” he says.

Buying considerations As enticing buying a used vehicle may be, to get maximum return on investment, there is need to take into account the benefits and cautions of going the used route. One can easily limit the downside of purchasing a pre-owned truck by buying from a reputable supplier, for example, an OEM like Scania. One of the biggest issues is that commercial trucks are work trucks, which means it isn’t always easy to find one in excellent condition. When debating the benefits and cautions of buying pre- owned commercial vehicles, the best weapon at your disposal is information. purchasing a used truck, customers need to gather every piece of information they can. One of the most important factors to consider is the service history of the truck because reliability matters. “Ask for a detailed history, including accidents, maintenance and repairs. If you are The OEM will always have all the necessary information one needs. According to Donachie, before

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