Investing in new equipment

Features - How I Do It

Cenova’s Harry Scott and Bill Blum share their approach to equipment purchasing.

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As your snow removal op grows, it could be time to invest in new equipment, like skid steers, tractors or trucks. But should that equipment be new, or just new to your fleet? Used equipment comes at a great price, but is the risk worth the cost? Here’s how Harry Scott and Bill Blum, co-owners of Cenova Snow and Ice Solutions in Philadelphia acquire equipment.

How do you go about looking for additions to your fleet?
Bill: Anything bigger than a Bobcat, we’ll try to get used, usually at auction. There’s a very large utility company locally that is usually unloading their machines there. These are machines that we go in knowing they’re taken care of and for the price, you can’t beat that price. We’ll go in a day or two before the auction and have a look at it. We’ll take our mechanics in to check them out and then, at the auction, we figure out our high bid and go after it. It’s not about the excitement of the auction at all for us.

Harry: Speak for yourself.

Bill: Well, Harry likes it. Which is why we go in there with our number written on a piece of paper. We’ll do a lot of looking online, too. Something I learned from Harry is to always just ‘love the deal.’

Harry: It’s not about the emotion. It’s about the deal. We do a lot with that.

Bill: We also purchase township trucks. Townships will maintain their trucks and put all the bells and whistles on them. We’ve been pretty fortunate in buying township trucks.

What percentage of a fleet should be new or used?
Bill: Six years ago, when we started, we bought 14 new trucks. That’ll be the last time we buy completely new.

Why used over new, then?
Bill: Well, the next time we buy new trucks, Harry and I are going out with hammers and hit them a few times because they’re going to get beat up, and I figure we ought to be the ones to do it. It’s hard to get workers to take ownership of their vehicle and treat it like they care about it. It’s very frustrating.

Harry: Also, there are tax options people don’t know about. Looking into it can help maximize the 179 Exemption for the year. It could take you from a profit to a loss. Contractors should check with their accountants.

Bill: Townships and big line companies have huge maintenance programs. Townships do it by date – once a vehicle gets to seven years it goes to auction. They take ownership of their vehicles. Their drivers take ownership, they take care of those trucks. They also have the budget to work with to get a truck that has all the bells and whistles, and we don’t. So they’ll get a $90,000 truck with all the perks, and it’ll be a little older, but $9,000 when we get it.

How do you know who to trust?
Bill:
We won’t buy old used. We’re looking at 30,000 to 40,000 miles. The best used trucks come from municipalities and large utility companies. They’ll buy a fleet of trucks for a job, and once that job is finished they’ll sell all of those. We also put a lot of homework into the auction and sales. I normally won’t take it if I don’t know who owned it beforehand.

Harry: Whether it’s someone in house or a mechanic – someone who’s judgment you trust – you want to have someone put their eyes on it.

Bill: Or, if you know of another company that might be selling their trucks, and you’re familiar with how they treat their trucks, you might be able to set up some kind of a deal.

How do you win bids?
Bill:
Have a number beforehand. We determine it by what our mechanics tell us about the upkeep. You’re really bidding against the used equipment dealers, so I’ll go a little higher in my bid because I’m the end user. On the township trucks, we’ll bully that bid a little. When one contractor goes up $200, I’ll go up $1,000. I want that truck more than anybody else, and I will end up making more money with it. I can afford to bully it.