When to replace a work truck

[gavint]

Hi all you other self-employed tradespeople on the forum!

Here's a question for you all:  What criteria do you have for making the call on replacing a work vehicle?  Do you have a formula that you run some numbers through, or do you have general rules of thumb that work for you? 

Like a good mustachian, I bought my work truck used, and it has lasted me 8 years now.  It is by far the most reliable vehicle I've ever had, and the one I've owned the longest.  Repairs and depreciation have averaged around 150 € / month since I bought it.  Cheap!  It is however starting to show its age, 14 years old, and is looking pretty shabby - some minor rust, dings and dents from work, fogged up lights...  Interestingly, because of shortages and inflation, I could sell it for not much less than I bought it for. 

Question is, do I pimp it up for another 5 years of service, or bite the bullet and order something new?  I've recently hired for the first time, and will expand my customer base.  So, my main concern is providing a non-shabby environment for my employees to work in, and arrive at jobsites looking like a serious company.  My big concern is a new truck will set me back around 50k €. 

[Michael in ABQ]

I would say reliability is the biggest factor to consider. If you have a single vehicle and it breaks down and spends a week in the shop and you can't make any revenue, that's a big deal. If you have a backup (personal vehicle, can rent a suitable truck for a few days, etc.) then that's not as big of a risk. But if the truck is something specialized, i.e. a tow truck, where you literally can't operate your business without it, then it makes more sense to buy something newer that should be more reliable.

[sonofsven]

I generally run mine for +/- ten years. One diesel van I ran til 300k miles,  it started to get increasingly expensive to maintain and was looking old so I replaced it with a new Nissan Frontier and ran that for ten years til just under 200k. Now I'm in another new Frontier, well new in '22.
For me it's downtime and reliability. I don't ever want to miss a day because of a vehicle breakdown.
For years I also was a co-parent with kid responsibilities half time so it needed to be safe and reliable for that as well.
I also like to make a good impression as I'm a self employed GC/carpenter and driving a beater doesn't always inspire confidence in clients, but in reality I'm at the point where I'm not really working for new clients so really that's not much of an issue anymore. I do like driving newer vehicles for work, though, I'll admit.
In the US there are a lot of small business tax breaks available, so that helps push the decision to buy as well. I pretty much wrote off the $34k price I paid for the Frontier, so explore that in your country.
Most of the higher volume contractors I know buy new rigs every three or four years, which is crazy to me, but to them it's a choice of paying more taxes or buying a new truck. It's not quite that simple, but it's an easy justification.

[deborah]

I’m not a tradesman, but when I get one to do some work, I definitely don’t look at how nice his truck is! You look like a serious company with a battered truck, since you’ve obviously been working for a while.

[gavint]

Thanks for your replies! 

Agreed @deborah  - it's not necessary to have a new vehicle to make a reasonable impression, but if it looks disorganised and shabby, it is an indication to the customer how much care that person is going to put into their work.

And yes @sonofsven, reliability is the biggest issue.  This vehicle has been very reliable over the years, just once did it need to be towed to the garage.  I do have a van now to cover times when it's at the garage. 

What it needs though to be kept in service is a general overhaul - new livery (I'm required by local laws to change my business name) for 3500 €, lifting the bed off to repaint the frame, some minor mechanical repairs, new lights front and back and a new driver's seat.  Plus, with the new employees, I'll have to build some sort of shelving unit in the back row for safety and organisation. 

This all would not solve two things - it is brutally sprung so is a super rough ride, and it doesn't have a dump body on the back.  A dump body retrofit would cost 12,500 €.  It is incredibly hard to get and keep qualified employees, so I don't want to scare them off with crappy equipment, namely a rough and shabby ride to the jobsite.  The dump function would save me money over the long term, saving employee time at the dump.

The way I figure it, the cost of the fix-up would be:

3500 new livery, including wrapping the cab to make it look new
12500 dump body
1500 minor parts
1500 major service
1500 opportunity and employee costs touching up and repainting the frame
7500 opportunity cost for what I could reasonably sell it for as it is now.

28000 € - for a 14 year old truck with 200 k km.   

compared to a quote I just got for a brand new Fuso Canter with a dump body and tool-box behind the cab for 44500 €, add in a much lower expense livery for another 1000 € for 45500 €. 

Doing that math makes it look like a no brainer, especially if I can get a good deal on financing.