Owner-operators typically consider all kinds of things when buying a new truck – price, interior packages, engine horsepower, exterior styling. But Jeff Sass says the number-one thing he recommends independents should consider is resale value.

“Many financing packages today are geared to a certain residual value for a truck, explains Sass, Class 8 marketing manager for Kenworth Truck Co. “So the higher the resale or residual value of a particular make or model, the lower monthly payment you might have.”

How much of a down payment the owner-operator puts down on a new truck also drives the size of the monthly payment and what kind of financing package they get. Outside of that, how the truck is spec’d with an eye towards resale value is critical.

“For example, if you are debating between a 10-speed and 13-speed transmission, you have to look at the impact on residual value – not just to the base cost of the vehicle,” Sass explains. “Usually, the price difference is far less than the boost to resale value. Paying an extra $1,000 for the 13 speed transmission is worth $2,000 on the back end, so it’s actually made you money in that case.”

Steve Soldner, chief salesman at Dallas, TX-based Dallas Peterbilt Sales, adds that owner-operators should take a broader view of the truck buying process – making sure to take care of as many non-truck items as possible before setting out to buy a new vehicle.

“The purchase process for a heavy-duty Class 8 truck is much more complex than buying a car,” Soldner says. “There are many facets of the purchase process that must come together in order for a new or used truck to be delivered. With some advance planning this can normally be accomplished in a 24-hour period. Without advance coordination, however, it can take up to a week.”

The primary key, he says, is to understand your financial situation first. “If you are a first-time buyer, it can take up to 20% down with good credit to buy a new truck,” Soldner explains. “If you are trading in a truck, understand how much equity you have in your truck or if you are ‘upside down,’” meaning the amount you need to pay off on your loan is higher than cash value of the truck. “Most customers with previous truck credit will need a lower down payment than a first time buyer either through equity in their trade or cash,” he says.

Insurance is another critical area. “Unless you operate under your own ICC Authority, the two types of insurance that you will need are physical damage and non-trucking liability (NTL),” Soldner points out. “Your new vehicle will need collision insurance before it leaves the dealership’s property. Your insurance agent can fax an insurance binder to the dealer to confirm your coverage, listing the lien holder, or finance company, as loss payee.”

If there is an accident, the finance company gets their money first. “Some carriers provide insurance as part of their lease contract with an owner-operator and they can also purchase insurance from most dealers,” Soldner notes. “Insurance can be purchased under a separate contract, or it can be included in the finance contract so the owner-operator has to make just one payment for financing and insurance.”

It’s also a good idea to know where you want to register your truck before you make your purchase as each state has different fees and tax implications, he says.

“For starters, the registration is separate from the titling process,” Soldner explains. “You normally have the option to register the truck wherever you choose. However, some companies require you to run their plates as part of their lease package. If you run your truck in more than one state, you will probably want apportioned plates. With apportioned plates, you may not have to pay the state sales tax when you purchase the truck. However, you will pay the taxes quarterly based upon where you run your miles.”

Owner-operators staying in one state, however, are most likely better off paying the state sales tax when they get their plates, he says.

Once the sale is completed, the owner-operator gets temporary cardboard tags – tags that are usually good for 21 to 30 days. Each state has different guidelines for the use of temporary tags but Soldner stresses one critical fact. “In most cases, you can NOT haul a load on a temporary tag. If you intend to haul an intrastate load from the dealer, you will need to acquire temporary permits,” he says, adding that it normally takes at least a week to get permanent plates.

Warranties are another area owner-operators should review. Sass says how long the buyer plans on owning the truck is what really dictates the warranty choice.

“If you are just going to keep the truck three to five years, then the standard warranty should do – and extended warranty isn’t as critical,” he says. “But if you go to a longer trade cycle, you really may want to look at that 5 year/500,000 mile package.”

“People must understand this is a business – a tough business – that requires solid management,” adds Mike McColgan, remarketing development manager for Volvo Trucks North America. “That’s why owner-operators today need to create a budget so that before they buy a new truck, they know what their projected costs are going to be to own and operate it.”