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Buying trucks in bulk: Is buying fleet the right choice for your business?

Susan McBride is in charge of purchasing and overseeing 150 pickup trucks for her employer, Wilder Construction. Every winter, she starts the process of ordering half a dozen or so trucks.

Buying a personal vehicle can turn into an all-day affair. Pick a car, get the pitch from the salesperson, take a test drive, then haggle over the price for what could add up to hours.

That's just not something McBride, nor those who hold similar jobs, have time for.

So by the New Year, McBride sends out bid requests to auto fleet dealers. McBride knows what she needs-the basic, plain-Jane, white, full-size pickup truck. The dealers send back a quote, then the company buys from the dealership that offers the best deal. No haggling, no sales pitch, no headaches.

That's the main difference between commercial and retail sales, said Kurt Burroughs, commercial sales manager at Tony Chevrolet of Anchorage.

"Commercial salespeople oftentimes sell what the customer wants and not necessarily what's in front of them on the lot," he said. "When you call up on the phone, talk to a retail salesperson and say you need something, the retail person doesn't know the right questions to ask. Commercial people really have a knowledge of commercial trucks. We do very little in passenger-type career cars, but we do tons of trucks to businesses that use them."

The options a business needs in a vehicle can be very specific to the job-standard engine or heavy duty, a special cooling system or no, regular or heavy load capacity. And do you really need that upgraded sound system or air conditioning?

Commercial sales representatives usually get special training in the types of vehicles businesses most use, sales managers say, most notably in trucks and vans. That helps businesses, especially small organizations, best determine what they need-whether to buy or lease or purchase an extended warranty. Representatives also can point out some general tax benefits to each option.

The first question a fleet salesperson asks is what the vehicle will be used for. A construction company that needs a couple of trucks for a few weeks in a year may be better off leasing. Or if the owner wants to keep the truck for a couple of years, buying might be the best option for tax purposes. The company may not need a truck with a heavy load capacity if it only serves to get the crew to the workplace. And you may or may not want to spend the extra money on all the bells and whistles, such as power windows and door locks or leather.

"Sometimes people buy $2,000 or $3,000 in options that they really didn't come looking for," Burroughs said. "Most business customers are looking for a truck to do the job, they want value and they want it easily."

Commercial reps also can help determine what added equipment might be needed, such as a snowplow, lift gate or a flat bed, and can arrange to have those items installed.

Fleet sales are open to anyone who owns and operates a business, whether it's a one-man snowplow operation or a major corporation with hundreds of vehicles. And vehicles can be bought locally, at the same price as Outside dealers, said Burroughs.

"There's the myth out there that people think they can't buy cars and trucks here at the same price as in the Lower 48," he said.

Alaskan dealers often offer the same incentives in financing and rebates available elsewhere in the country. When dealing with commercial sales, buyers have the option of purchasing a vehicle using rebates available to retail buyers or by taking advantage of the various fleet incentives.

Each of the "Big Three," Dodge, Ford and General Motors, have programs aimed specifically at commercial buyers. These manufacturers generally consider a "fleet" to be 10 or more vehicles owned or leased under one business. They offer various incentives or rebates. Sometimes they offer cash back for "upfits," added accessories such as a steel toolbox or a ladder rack.

Sometimes buyers have a choice of money-saving options. Chevy allowed commercial buyers to pick one of three options for purchasing a 2002 truck-upfits, cash reimbursements for upfits or up to $1,000 in industrial tools.

But a business doesn't have to own 10 trucks to benefit from fleet services. Ford offers the Business Preferred Network, good for virtually any number of vehicles, said Mike Ryan, fleet manager at Cal Worthington Ford. Under this program, buyers are offered incentives for purchase or leasing, vehicle maintenance and service, and later for trade ins.

For small-business owners, Dodge offers the Business Link, where all you need is a business license or a commercial drivers license and you may qualify for an additional $300 off the price of a vehicle, said Calvin Towns, fleet manager at Anchorage Chrysler/Dodge. Those in the Business Link program are given priority into the service department and, if the repairs take more than 24 hours, the dealership will offer to loan the owner a similar vehicle.

Most fleet dealers have outside sales representatives who build relationships with business vehicle buyers. Outside reps can bring a vehicle to the business, so potential buyers can test drive a new model, for example.

RELATED ARTICLE: Things to Do and Know Before You Buy

1. Talk to your accountant about possible tax benefits for buying vs. leasing.

2. If you don't want to finance through the dealer talk to your financial institution about a loan.

3. What will the vehicle be used for; for example, basic driving, hauling towing plowing?

4. How many are needed?

5. How long will you need them just for the season or for a few years?

6. What modifications/additions will you need, for example, a dump bed, utility body or snow plow?

7. What features will you want/need? Power windows and locks, leather or cloth four-wheel drive or two? Need a specific tire size? What about color?

8. Have you allowed enough time to order a vehicle with the specifications you want or do you need to drive one off the lot right away?
COPYRIGHT 2002 Alaska Business Publishing Company, Inc.
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Author:Campbell, Melissa
Publication:Alaska Business Monthly
Geographic Code:1USA
Date:Oct 1, 2002
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