The 4 Phases of a Diesel Engine Investment

The 4 Phases of a Diesel Engine Investment

You don’t need us to tell you that investing in a heavy-duty diesel engine – or a piece of equipment that has one – is a big deal. Not only are there financial considerations for your company, but you’ll obviously be looking for a certain standard of performance and reliability that will hold up for years to come.

Knowing this, you might assume that business owners and executives would have a set process for making decisions about what to buy, or how to maintain such an expensive piece of capital equipment. In our experience, however, many of them are flying blind. They work off gut instincts rather than plans and numbers, which leads them to make decisions that can hurt them in the long run.

We want to help you avoid this tendency. In today’s post we are going to lay out the four phases of a diesel engine investment. The better you know and understand them, the easier it’s going to be for you to get the equipment and budget terms you need.

Let’s start with the easiest part of the job… and the step that is most commonly overlooked. 

Phase One: Planning and Budgeting

Although this is a topic we have covered in previous posts, it’s always worth mentioning (even if briefly). Before you sign a purchase order for a diesel engine, or any other piece of heavy equipment, you should have a very clear plan and budget in place.

On the planning side, you’ll want to be thinking about things like: what will this equipment do for me, what technical needs are required, and how soon must I have it in place? It’s no use having an inexpensive engine if it can’t handle the workload you require. And the perfect option isn’t actually perfect if there is a two-year waiting list and you need it in six months.

These might seem like obvious considerations, but they are easy to overlook when we’re operating on opinions or instincts rather than facts. For this reason we always recommend to our clients that they put relevant information in lists, worksheets, or even spreadsheets. That way they can compare the most important variables side by side.

Naturally, costs will be one of those considerations. In some cases it might be the major consideration. No one invests in anything for their business without the hope or expectation of a profitable return. When calculating the amount you could spend on a new piece of equipment, don’t just look at upfront prices and terms. You should also consider longer-term factors like financing, monthly or quarterly operating costs, fuel, insurance, and scheduled maintenance.

Once again, this isn’t an area where you want to work from ballpark figures or guesstimates. You will want to have as much of this information as possible before you begin. Some you might be able to get from a manufacturer. However, it’s always good to double-check your figures with a trusted supplier, colleague, or even someone like an insurance agent.

Somewhere in this process you should come up with a clear choice for your next diesel engine investment. You might have several good options to choose from, or you could zero in on a specific model that has been suggested by your dealer. Either way, you’re ready to agree to terms, sign on the dotted line, and pay your invoice. 

At this point the transaction might be finalized, but the lifecycle of your business equipment is just beginning. How you handle things from here will go a long way toward determining what sort of value you get from your purchase.

Phase Two: Delivery and Monitoring

At some point after you’ve made your purchase agreement, your diesel truck, engine, or equipment will be delivered. In most cases your dealer will send along a representative to help you with the initial inspection. While these are just routine checklists to be followed, it is always important to ensure you’ve gotten the right model and specifications. Errors of a large magnitude are very rare, but it’s good to check things for your own peace of mind.

Once you sign off on the delivery, you can put your truck or engine into use. This is a crucial time in the lifecycle of your investment, so there are a couple of things to keep a close eye on.

The first is the performance of the engine itself. In almost every case, a brand-new engine from a reputable manufacturer is going to perform exactly like a brand-new engine should. It will be strong, efficient, and reliable from the first moment you turn the key. However, in the very unusual event that there is some sort of manufacturing fault or issue, you’ll want to know it early on. This is partly because you don’t want one substandard component to damage others. However, it’s also because you’ll want to file any claims while the engine itself is still under warranty.

The second thing you should monitor carefully is the maintenance of the engine itself. Many modern pieces of equipment have a kind of breaking-in period. Because the engine will not have run for much time prior to delivery, there might be special requirements for lubrication, checking rubber sealants, and so on. Again, these tasks tend to be minor and routine, but performing them as manufacturers recommend can greatly affect the life of your engine later on.

It’s important to note that problems with a new diesel engine are virtually unheard of. However, if you do experience any issues, it’s best to note them as quickly as possible and contact your dealer early on. Then, they can work on finding rebates, credits, or replacements as needed.

Over the years, we have even come across a few situations where a business owner has invested in a piece of heavy equipment and then discovered that their needs have changed. In those instances it’s even more important to make the right decision early on. That’s because a nearly new diesel engine can often be returned or resold for most of its purchase price.

It’s very unlikely that you’ll face any of these challenges in your business, but it is important to go through delivery checklists and stay on top of those early maintenance plans. Those actions will lead you smoothly into the next step in your diesel engine’s lifecycle.

Phase Three: Performance and Maintenance

Once the delivery, initial inspection, and early maintenance of a diesel engine are completed, we move on to the phase that most business owners are familiar with and look forward to: normal operation. This is the time when your truck or equipment should be working as planned and require minimal ongoing care.

Assuming you’ve taken the earlier steps outlined – and are following scheduled tasks like oil changes without overtaxing the engine – this phase could last for years, or hundreds of thousands of miles. Your engine should run more or less effectively, just as it did when it was new, without any issues.

It’s vital, of course, that regularly scheduled maintenance is performed. And you should keep an eye out for any manufacturer’s notes or recalls. You’ll also want to highlight any unexpected issues or changes in performance as they arrive. That can help you spot patterns, identify areas of concern, or just note areas to look out for during more substantial repairs.

Another good idea is to keep an eye on the kinds of numbers that inspired you to make the investment in the first place. Make note of the changes you see (if any) in fuel costs, maintenance expenses, and unplanned downtime.

Because your diesel engine is a business asset, you always want to treat it like one. It’s entirely possible that some variables like fuel prices could change over time. These might affect the ongoing value of the engine. It could also be the case that you could be surprised by something external that actually benefits you. Again, rates for fuel, maintenance, and insurance are the obvious culprits here, but there are other possibilities.

For example, during the recent microchip shortage, there were some used diesel trucks that actually increased in value over and above new dealer prices. Some business owners were able to take advantage by selling off equipment they didn’t currently need and waiting for new models to arrive later.

Naturally, that sort of situation is unusual. But it highlights the need to keep an eye on both costs and performance metrics. Eventually, you will reach a point where you have either reached the end of the manufacturer’s suggested life for your engine or your bottom line is affected by maintenance and reliability concerns. At that point you move on to the next phase and have some bigger decisions to make.

Phase Four: Renewal and Replacement

In the same way that some business owners think buying a diesel engine is as simple as visiting the dealer to write a check, many also feel like it’s a simple up-or-down decision to buy new when an existing engine starts to falter. However, things aren’t always that straightforward.

First, there is a cost-to-benefit analysis that should take place before making that call (see our notes on phase one). It’s easy to see a shiny new truck at a dealership and decide you want one. But is that the best thing for your business? In some situations it’s smarter to overhaul the existing engine and get another few years of life out of what you have.

Assuming you do decide to move on and get a new engine, you should carefully consider whether you have any value left in the equipment you are retiring. Could it be sold to another company with lighter needs for power and reliability? Could the engine be recycled for parts? Will a dealer or manufacturer let you trade it in for credit on something newer? Don’t make a decision until you have worked through your options.

Sometimes, business owners and executives are hesitant to meet with dealers like ourselves when they are trying to make these decisions. Their fear is that we will try to talk them into an investment in a new engine they don’t want or need. 

We can understand that concern, but a reputable vendor isn’t always in the business of recommending new trucks and engines. We have been around for decades, and plan to be here for many more years. The best way for us to earn your business is by giving you good advice that keeps your company healthy over time. That could easily include providing you with the right maintenance to extend the life of your current diesel engine rather than investing in a new one.

In fact, the best thing to do at any stage of the diesel engine lifecycle we have outlined in this article is to get expert help. When you have a team of specialists on your side, you can make good buying and maintenance decisions, and move forward with the knowledge that you have gotten the right equipment for your business.

How to Master Diesel Engine Buying and Maintenance

The best way to act like a diesel engine expert is to not pretend to be one. In other words, embrace the parts of the process you don’t know and round out your knowledge.

By working with a company like Valley Power Systems you can get access to decades’ worth of experience from a team of diesel engine specialists. Our staff isn’t just familiar with the different makes and models available on the market, but also dozens of different use cases – from construction to emergency support and marine operations. It wouldn’t be possible to get that kind of perspective on your own. Why not borrow our expertise?

You are the ultimate authority on your business. You know your market, your customers, and your needs. Let us take what you know about your company and blend it with our understanding of diesel engines. Then, we can help you find the equipment and maintenance schedule that best meet your operational needs.

The help you’re looking for is closer than you think. Simply contact us today to schedule a free consultation and see what we can do to keep your business rolling!

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