At the end of the lifecycle, upfits need to move on to their next life — either installed on a new vehicle sold with the old one. How you remarket your upfit units will depend on several factors.
To Sell with Upfit, or Without?
When it comes time to sell your upfit vehicle, a common question is whether to sell it complete with the upfit or not. As with many parts of fleet, the answer depends. It depends on the fleet and the upfit itself.
“Generally, I’d recommend fleet operators sell their trucks and vans with the upfit included. Many of these units are highly desirable on the secondary market, and typically, including the upfit will help to generate the best net returns. Unless the upfit can be easily transferred to another vehicle within your fleet, eliminating the need to purchase new components or equipment, most fleet operators are best served selling the unit with the upfit intact,” said Chris Clarke, director, remarketing solutions for ARI.
Moving equipment around takes time and keeps more than one vehicle out of service at a time.
“Yes, sell the upfit along with the vehicle. Doing swaps with the equipment results in two vehicles being down for potentially days or weeks until the work is complete. When you include lost revenue or sales opportunities, the math always supports getting new equipment with a new vehicle,” said Jonathan Culp, director, fleet and leasing sales for Dejana Truck and Utility Equipment.
On the other hand, if you plan to reuse the same upfit on the new vehicle, it may be the less-expensive option compared to purchasing brand new.
“BrandFX does not recommend this since our bodies typically outlast the chassis. The chassis will be retired far in advance than our composite bodies. We recommend saving the body and selling the chassis, then mounting the composite body on to a new chassis,” said Mathew Marcussen, director of customer relations for BrandFX.
Currently, many fleets leave the upfit on the vehicle when they sell the vehicles
“Selling the upfit on the vehicle can be done for many reasons, including rust and dents to the existing upfit. There is also a labor cost to remove the upfit. Then, the upfit may have included holes drilled into the truck’s bed, etc. The fleet would have to fix the modifications to the chassis before a sale. With DECKED, the removal can be made with a handful of common tools, and only takes 10-15 minutes. Plus, we utilize a no-drill install, so there is no damage to the truck. The fleet can then move the system into their new truck (if you stay within the same truck manufacturer),” said Jeff Haag, VP of Fleet Sales for DECKED.
But as always, not one solution may work for every fleet. “Test your resale values with and without the upfits. Make an educated decision,” said Haag added.
When selling an already upfit vehicle, there are specialized channels such as J.J. Kane and Ritchie Brothers Auctions, that fleet managers should be aware of when selling heavily upfit vehicles.
“Heavily upfit vehicles are one area where partnering with a remarketing professional will certainly pay dividends. These units are not traditional consumer trucks and vans, and you need to get them in front of the right buyers to maximize your proceeds. Based on the types of units within your fleet, your remarketing partner can help recommend the ideal specialty auction that is likely to yield the best net returns,” Clarke said.
While each scenario will undoubtedly vary, there are a few factors to consider when selling units with complex upfitting.
“If you operate a garage or maintenance facility, it may be more economical and feasible to remove upfit components such as service bodies, cranes, welders, generators, etc. If these components are still in good working order when the vehicle is ready to be removed from service, you may be able to transition these items to another vehicle rather than incurring the cost of purchasing new equipment,” Clarke added.
Additionally, if a vehicle features high-value equipment that is no longer operational, determine whether it is more beneficial to remove the equipment before the time of sale or repair the item to maximize return on investment.
“For the most part, potential buyers are likely to be warry of units that may need a costly repair. Finally, there are certainly times when it is financially beneficial to leave the upfit components on the vehicle. For example, hi-rail units that include rail gear typically retain value and perform very well on the secondary market,” Clarke concluded.
Tips for Remarketing Upfits
There are a variety of strategies around selling vehicles with complex upfitting when the unit reaches the end of its useful lifecycle.
“One thing a fleet manager must keep in mind is that, typically, the upfit components and equipment depreciate at a slower rate than the vehicle itself. Fleet operators often dispose of the unit with the upfitting intact, which certainly makes the unit more desirable. Still, there may also be an opportunity to reuse that equipment on another unit within your fleet. If the upfit and equipment are easily interchangeable, it may make economic and logistical sense to remove the components before selling the vehicle. At times these can be complex decisions, but your remarketing partner can help you determine the best strategy for your particular units,” said Clarke of ARI.
Every day, fleet managers are pushed to save money but increase safety and quality. The better the product you start with, and the better you maintain it, the higher resale value it will have.
“Buying a higher quality product that will last will result in fleet savings through reduced maintenance cost, fuel savings, longer life-span, but more specifically for this question, a higher resale value,” said Marcussen of BrandFX.
The overall cost of ownership is key.
“If the bodies can last for years to come and remain in great condition, the resale value will be much higher. Composite bodies are going to command a higher resale value as they will be in better condition, not rust, have lots of product life still to live, and are proven out in the field,” Marcussen added.
Originally posted on Work Truck Online