A Lesson from the Stockbroker
A True Story by Weave
I was looking for a new or newer truck to replace my aging Freightliner FL70 expediter back in May, 2002. One stop I planned on was a well known Kenworth dealer in Ft Wayne, IN, who sold a popular expedite buildup of Kenworth’s T300 model. Having some time off in that area, I stopped in with my FL70, and checked out what this dealer had on their lot.
The salesman had one brand new “leftover” 2001 T300 built and ready to go, a new “leftover” 2001 cab and chassis, and another built up T300 with a lot of custom accessories on it, which the salesman explained to me was a slightly used 2001 unit for sale on consignment.
This customized truck looked REALLY nice. It was ordered from the factory with dual exhausts, had loads of running lights, polished stainless steel tanks, full expediter specs, custom Bentz sleeper, the works. I asked the salesman how much, he said he didn’t know, but he guaranteed he would be able to sell me the brand new one he had ready to go for less than what was wanted for this used truck. I then became more interested in the story behind this used truck than in what I was supposed to be there at the dealer for!
I took the new ready to roll T300 for a test ride, and compiled some facts and figures for financing. These leftovers (in 2002) were priced at $69,000. The dealer explained they order 10 new T300’s a year, and they were still waiting for their batch of new 2002’s to arrive. They sell the new units for $100,000. I asked why the leftovers were so much cheaper, despite still being brand new. He explained that although they would like to sell them for more, the banks and finance companies will only offer loans for their current market value, and they have to allow for the first year of depreciation. It makes the leftovers an incredible bargain, but he said they usually sell all the new units for the $100k and don’t have any leftovers.
While inside, I enquired about the used unit again. The dealer told me it was purchased by a retired stockbroker from Wisconsin who wanted to go trucking. He planned everything out ahead of time, even to the point of how he wanted the truck to be customized. He had no previous truck driving experience, but was positive he wanted to enter the business because he loved to travel, and never had time to do so with his previous career. He wanted a comfortable truck that looked nice, yet one that could bring him some income also. That was his reason for choosing the proven T300 D unit.
The dealer informed me this man purchased the truck at a price of $110,000, having borrowed some money against the collateral in his house. He financed the truck through the same hometown bank that mortgaged his house, the dealer even showed me a copy of the bank check. (I was laughing a little bit in disbelief, thus the proof.) The dealer then told me this man was one of those guys he wished he could have just said no to, but can’t when they walk in the door and hand him the check. This man had plenty of money available at his fingertips, and cash reserves.
The retired stockbroker took delivery of the truck in April, 2001, and ran the truck for approximately 5000 miles over about six weeks. The dealer then received the phone call he knew he would be getting. It was the stockbroker, asking if he could put the truck up for sale on his lot.
The dealer told him that would be fine, but he should be prepared for it to sit for a while. The stockbroker, in amazement, asked why, figuring the still nearly new truck should sell quickly. When the dealer told him the truck has taken its first year of depreciation along with being used, it only has a market value of $70,000 or less now, despite the low mileage and accessories, and that would be about the most anyone would be able to get financing for on it. He could sell the new leftovers he had for about the same price. The stockbroker was in shock finding out that six weeks and 5000 miles could be an approximately $40,000 loss to him.
His reasons for wanting to give up the truck? After driving it for a few weeks, he learned quickly that he did not like trucking, and was absolutely terrified of handling the truck in busy traffic and inclement weather. Good reasons to not want to drive it in the first place were my thoughts, and the cost of this guy to learn a silly lesson ended up being nearly the price I paid for the used truck I wound up buying.
If this story does not re-enforce some of the many good reasons for the newcomer to start out driving for a fleet owner to gain business knowledge applicable to trucking and to know one’s self better, I simply do not know what else it will take. Mr. Stockbroker could have MADE money in that six weeks by driving someone else’s truck learning he did not like trucking instead of losing tens of thousands of dollars to discover that fact. This case probably showed a lack of overall research prior to entering the business on the stockbroker’s part, but research or past career experiences or all the money available in the world aren’t going to tell you if you like or can handle driving a truck, only testing the waters will, which is the only stage the stockbroker spent his money to reach. His prior business knowledge failed to account for many other things that he probably would have picked up on with fleet owner practice too prior to having made the wasted truck purchase. Remember reality is what is happening now or what has happened, and hindsight is always 20/20!
-Weave-
