Our mates at TradieSpec examine the pros and cons of buying a ute in 2020.
The cornerstone of every Trade Business is the trusty work utility. Invented in 1934, the Ute has become synonymous with the Australian Trade industry.
A fun fact and what many do not know, is that the Ute was a suggestion by a Tradies wife, who requested “a vehicle to go the church in on a Sunday and which can carry our pigs to market on Mondays.”
Voilà, more than 80 years on, the Ute is 4 of the top 10 highest selling vehicle types in Australia with over 200,000 sold yearly.
Should you go new or secondhand?
So, when buying your new Ute, should you buy new, or secondhand?
Well that depends on a few things…
1.) Financial considerations
The financial aspects are usually front and centre considerations for business owners.
A new Ute is obviously going to cost more than a secondhand Ute. But a new Ute is also going to hold its value far better than your everyday passenger car in the first year. In fact, on average a commercial vehicle’s value will only depreciate at 13% in the first couple of years compared to a passenger vehicle which will depreciate at 20% annually.
If you’re planning to purchase the vehicle outright, you’ll keep more cash in your pocket if you go with the secondhand option.
If you’re looking to finance your Ute, lenders can be particular about the age and condition of a secondhand Ute and may request a viewing for a value appraisal before lending against the new asset.
Traditionally, vehicle finance or debt over a vehicle has been considered ‘bad debt’. But with interest rates so low, financing a vehicle through your business does have its benefits, namely, cashflow. Amortising the cost of the vehicle over three to five years can mean you keep $30,000 in your account for injecting into business growth.
Tim Cullen, Director of TradieSpec, a fast growing Trade Spec Ute hire business says business asset purchases should always be considered carefully and in line with your business needs.
“Work levels for Tradies can fluctuate throughout the year so it’s important to consider when you will need another Ute in your fleet. We see too many Tradies take on a Ute to their fleet, only to have it collect dust for most of the year back at the office,” he said.
New Utes come conveniently packaged with dealership add-ons and up sells. The add-ons like capped price servicing, dealer delivery and quick finance approval processes can be a big bonus if you’re trying to get a Ute into your fleet quickly. Five to seven-year warranties can be an underrated additional inclusion.
Some of the upsells can be a little annoying. Unnecessary or overpriced insurance is the first upsell that springs to mind - usually best to avoid this one unless you truly need it.
A brand spanking shiny new Ute can do wonders for your business’ brand image. Rocking up to a jobsite or clients house in a new Toyota Hilux or Ford Ranger with your crisp business signage on the door can build the same credibility a slick new website or a clean and approachable shopfront does.
Competition for work is strong so when appearance can be the difference between winning and losing a job it’s worth presenting well. But that is certainly not to say a secondhand Ute can’t present well and turn just as many heads as a shiny new Ute can.
Given the important role your Ute is going to play in your business, we think a new Ute is generally going to be the best option for your business if you can swing it. When you consider all the factors a new Ute can provide the financial benefits as well as the convenience of a variety of dealer add-ons.
However, it is always great to do your research, come up with a pro’s and con’s list and work out what is best for your individual business circumstances.
After some cash to help buy some new wheels?
We’re giving away cash prizes as part of the Tradify Van Games.
Snap a photo or video of your work van or truck for your chance to win. Head over to our Instagram page to learn more.