How to determine the value of used fire apparatus
By Paul Batista
Having been involved in fire apparatus sales for the past 30 years, one of the most frequently asked questions or FAQ has been, "Our department is surplusing our fire truck. How do we determine an asking price?" Unfortunately, there is not a value guide or "Kelly Blue Book" to use as a reference due to the fact that the fire apparatus industry is a very small segment of the heavy duty truck market. That being said, determining the value of a truck is not an exact science. There are several factors to consider in pricing a used fire truck, including 1) a depreciation formula, 2) marketplace comparisons, and 3)desirability.
When calculating depreciation, begin with the original selling price of the vehicle when new. The average fire apparatus depreciates approximately 15% within the first year, 10% the following year, 10% the third year, 7% the fourth year, and 5% the fifth year. The depreciation rate decreases every year thereafter. Typically, fire trucks loose half of their value within the first five to seven years.
Also factored in this depreciation schedule are the mileage and overall condition of the vehicle.
Recent sales are used for comparison purposes in determining the value of a truck. A market study of similar apparatus that are currently for sale is another way of establishing values. One can also compare the price of a similar new truck and apply the depreciation formula to the used truck.
It is also important to take into consideration the desirability of the apparatus. Specifications of the vehicle are a factor that determines a truck’s desirability. For example, used tractor drawn aerials or ladder trucks are not highly desirable because they present problems with man-power and training. Any type of aerial that does not have a pump or tank presents this problem. Unless the aerial truck is a Quint, it will be especially difficult to sell as it becomes older. Another major factor in this is supply and demand. For example, there are many new or late model used tankers and brush rigs on the market. In order to sell this type of used unit a department must price its vehicle lower than the market value because there are so many available. The supply exceeds the demand in this case. Conversely, there is a greater demand and a smaller supply of heavy, medium and light duty rescues as well as all wheel drive Type II, Type III and rescue engines. A higher selling price can be applied to these types of apparatus.
Hopefully, this information has shed some light on the frequently asked question, "What is our fire truck worth?" And if in doubt, do not hesitate to call. We will be happy to help you with that FAQ.
Paul Batista is an Owner of Fire Trucks Plus with 30 years of experience in the fire apparatus sale industry.