Freightliner LLC and its sister finance company have announced “bold initiatives” to sell the large numbers of used trucks crowding dealer lots and thus restore normality to the truck-building business.

Unveiled at the Mid-America Trucking Show, the moves include low-interest-rate financing, a new credit operation specifically for first-time owner-operators and individuals with weak credit, and special warranty programs, said Jim Hebe, Freightliner’s president and CEO.

Orders for new trucks have fallen steeply since the sales and building boom ended in late 1999, and “there cannot and will not be progress in the industry until the used truck problem is resolved,” Hebe said. “Contrary to what’s been reported, overproduction did not cause this situation… We did not sell too many trucks. Freightliner and other builders sold trucks for which we had real orders,” he added.

The current bust in new truck sales, and the slowing of the general economy, was sparked by sudden increases in fuel prices, interest rates and insurance premiums, he said. Those problems must be solved, lest the slowing economy slip into a recession. The government must convince oil-producing countries to increase production, and insurance companies must lower premiums. Freightliner, in the meantime, can help with interest rates and credit availability through the new programs:

FasTrack A new division of Mercedes-Benz Credit Corp. headquartered in suburban Chicago, FasTrack will specialize in making loans on used trucks to first-time O/Os and other customers who don’t have the strong credit histories demanded by traditional finance companies. “It will put truckers in business and help them stay there,” Hebe said.

Power To Succeed Helps the inexperienced used truck buyer with a low down payment, warranties, new parts, a training program and business services. It replaces the “Destination To Success” program, under which Freightliner sold 5,000 used trucks in 2000. “Power To Succeed” includes:

• $995 down payment and an “attractive” interest rate to keep monthly payments low;
• 24-month/200,000-mile Select no-deductible warranty covers major engine parts in the powertrain, cab and frame;
• 12-month/100,000-mile Select warranty covers the engine’s turbocharger, fuel pump and injectors, water pump and other parts, plus accessories like air conditioning compressor, starter and alternator;
• 10 new tires, new batteries and relined brake shoes installed on all trucks;
• “Destination Success” educational program on business basics provided free, though buyers are not required to complete it; and
• Business services like budgeting, break-even analysis, income and loss statements, and tax preparation are offered for 12 months at no cost through a vendor, American Truck Tax.

Lower down payments for experienced truckers. M-B Credit will finance more of a used truck’s purchase price, allowing O/Os and small fleets to obtain efficient and comfortable late-model equipment. Such customers are now stuck with their older trucks whose low values leave them with no equity or even upside-down in loans.

SelectOne purchase program Experienced truckers can choose one of several benefits:

• 7.99% or 8.99% financing of up to $50,000, with the 8.99% rate subsidized by M-B Credit at $100 a month for 12 months;
• Security Package consisting of a 12-month/200,000-mile warranty on powertrain parts, cab and frame, or 10 preventive maintenance visits for oil and chassis lubing at TA-run ServicePoint shops over 24 months/200,000 miles;
• “Go” package of new tires, brakes, fluids and filters, remanufactured alternator and starter, interior and exterior detailing, inspection and road test, and a three-year/250,000-mile warranty on a factory-refurbished Freightliner Century or FLD tractor;
• “Show” package of interior and exterior appearance and comfort upgrades on a factory refurbished Century or FLD.

Refurbishing is done at Freightliner’s special facility at Tooele, Utah. Announced last fall, this program continues and may be expanded to other locations, Hebe said. Workers at Tooele are also converting short SleeperCab tractors into more valuable daycabs, and may begin doing other conversions of bigger sleepers.

Freightliner’s Legacy program, which remanufactures engines and driveline components and installs them in new conventional-cab chassis, will go on in conjunction with Detroit Diesel and other suppliers.

Used Truck Remarketing Centers will be set up to handle large numbers of off-lease and repossessed trucks, selling them “as-is” in an expedited manner. Dealers and finance companies can use Freightliner’s remarketing centers instead of sending trucks to auctions, which have “decimated used truck values” and hurt owners as well as finance companies, Hebe said.

The SelecTrucks network, meanwhile, will expand from the current 36 locations to 60 by March 2002, Hebe said. SelecTrucks lots sell certified used trucks, often in partnership with nearby Freightliner dealers.

Low-interest-rate loans on new 2000 and 2001 premium tractors now in stock at Freightliner, Sterling and Western Star dealers are also available. Rates for up to 60 months are 7.99%, or 8.99% with $100 of each of the first 12 payments subsidized by Freightliner.

Buyers of certain vocational trucks now in stock can also get the $100 per month subsidy for 12 months with a 7.75% rate, or 6.99% without the subsidy. These apply to new 2000 and ’01 severe-service and certain other non-sleeper trucks and tractors at Freightliner, Sterling and Western Star dealers. The rates include bare chassis, not bodies and other equipment fitted to them. The used truck programs represent Freightliner’s “huge commitment to this business,” Hebe declared. “We have assumed responsibility for used trucks ourselves. We have not pushed it onto our dealers. In some cases, we do it in cooperation with dealers. But we’re involved.”