Shopping for a new vehicle is a daunting task. Whether you are buying a simple sedan or a luxury bus, you have much to decide, from where you will purchase to how you will pay for the vehicle. Here is simple guide to help you through the process.
1. Do You Need It?
Many operators have been cast into financial perils by deals too good to pass up. The most enticing ones offer no down payment or no payments for the first three months. While these may look good, you should not consider adding a vehicle to your fleet unless there is a customer demand you consistently can’t fill, you need to replace a retiring vehicle, or you want to expand into a new market within your area. Never let a sales gimmick or offer cause you to make an impulse buy.
2. What Do You Need?
When adding vehicles to your fleet, consider exactly what you need. Are you farming out sedan jobs daily? Do you want to break into the shuttle business and need your first shuttle bus? Do you have a sedan with 200,000 miles on it that needs to be replaced? Whatever compels you to shop for a new vehicle should be based on facts, previous growth history, and projections into the future. You likely will be locked into this purchase for three to six years, and you don’t want to be left with a gigantic paperweight.
3. What Do You Want?
Once you determine what type of vehicle you are shopping for, zero in on the options available. The list includes built-in Wi-Fi systems, specialized sound systems, seatbelts, or no seatbelts. Think about whether you want your bus to have a P.A. system or not. Do you want your new bus to have a restroom? Have you thought about servicing a restroom and where you will dump it? Know before you go!
4. How Will You Pay For It?
Having a letter of credit issued by your bank or finance company can give you considerable clout. It shows the sales rep you are serious and you have financing already secured. To the sales rep, this is the same as cash. Use that as leverage in your price negotiation. They may tell you cash or financing doesn’t matter to them, but it does! Make sure you know what your payments will be on various levels such as $50,000, $75,000, and $100,000 so you are comfortable with your monthly payments against the potential revenue.
5. Always Do A Test Drive
Because almost every vehicle purchased in our industry has been modified by a third-party manufacturer, always take the vehicle for a drive on city streets as well as the highway to see how it handles on the road. Make sure you check the A/C and heating systems. Some extended vehicles come with only standard A/C systems, which may be inadequate to supply demand on hot summer days with lots of warm bodies. Look for vehicles with enhanced A/C.
6. Insurance Matters
Don’t forget to discuss your new purchase with your insurance company before you buy the vehicle. If you have no experience running buses, your insurance premium will be higher than one for an operator with five buses. More than one operator has bought a specialty vehicle only to be unable to insure it for various reasons including unapproved (non QVM) manufacturers, lack of operational experience, or the insurance company simply didn’t want to insure the vehicle. Many operators have bought their first party bus and expected the insurance to be more than a limousine but never expected it would be 10 times the amount. Ask before you buy!
Smooth Operations provides a broad range of information focused on new ideas and approaches in management, human resources, customer service, marketing, networking and technology. Have something to share or would like covered? You can reach LCT contributing editor and California operator Jim Luff at Jim@LCTmag.com.
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