Are you thinking of buying a food truck?
If so, you have probably asked the same questions as many other food truck buyers before you.
We talk to an average of 50 food truck buyers per month about financing a food truck purchase, and most have the following questions:
How much does a used food truck cost vs. a custom build?
Should I get my food truck custom-built or just buy a used truck?
Where can I find a used food truck?
Who are the best custom builders of food trucks?
Through working with many food truck builders across the country, and also helping people buy used trucks, here is how we generally answer those questions:
Used Food Trucks vs. Custom Built: What are the Costs?
There’s certainly a wide range of used food trucks available, and many people choose to just buy a used food truck versus paying for a brand new customization.
Most decent used food trucks range in price from $50,000 to $80,000, though you can certainly find a piece of garbage for cheap. The lowest prices we hear about for used food trucks that are in any semblance of working order are typically in the $35,000 to $40,000 range.
If you go custom, you will obviously pay a premium: when you get a truck from a builder the prices generally start at $75,000 and can go up to $150,000.
Note: We do sometimes see builders who do offer trucks for less, and some might be OK, but if you can afford it, much of the time you should just pay for quality work & equipment.
In talking to a builder recently who had cheaper prices than most of the other sellers we encounter, he said the way he did it is by cutting costs on the actual step van being used for the truck, since he could often find the vans for under $10,000.
That pretty much means buying a van from the late 80’s or early 90’s – and using it as the foundation for your business.
Pretty scary, right?
Used Food Trucks Versus Custom-Build: Which is Better?
The answer to this one is pretty simple:
If the only way you can afford (or get qualified to finance) your food truck is to buy used, you really don’t have any other choice.
If, however, you can qualify for the “real deal”, those with real experience in the industry would tell you something like this quote from an article at Foodtruckr:
” I wish someone had told me not to cut corners when purchasing the truck. I wish I had gotten a newer truck. We had so many repairs the first year we were in business. We had to replace the engine, transmission, all tires etc…if I had just taken that money and bought a better truck in the first place we would’ve been much better off.”
The issue of food truck costs comes up so often (even when someone qualifies for decent equipment) because many owners want to start off with the cheapest payment possible.
This is usually a big mistake.
- Buying a food truck for $20,000 cheaper might mean saving $500-$700 per month on your payments, but
- Even moderately successful food trucks regularly clear $1,000+ per day in sales.
- Profits on a well-run food truck are often 50% of sales.
- It only takes one day per month off the road for repairs to erase any savings you might see from a lower payment. (not even counting the costs of the repairs…)
Lastly, let’s be serious…
If your food truck fails, it’s probably not because your payments were too high – and going bankrupt from a $1,500 payment feels exactly the same as going bankrupt from a $2,000 payment.
Note that depending on your financial situation starting out, sometimes you won’t be approved for a high enough dollar amount to go custom, and that’s OK – plenty of people are successful buying a used truck – but most industry veterans would tell you that if you have the choice, definitely go custom.
Where Are the Best Places to Find Used Food Trucks?
Most people that look for a used food truck start with Ebay or Craigslist – the biggest reason being that they’re not really sure where else to look.
These websites can be great places to buy used books or a DVD, but from experience in financing a lot of equipment that people purchase off of these websites, I can tell you it is a game of Russian Roulette.
A few months ago, we had a customer, “Matt”, who had found some equipment on Craigslist that seemed to have a pretty good price, and initially seemed legit.
The “seller” told Matt that he had two other buyers so he better hurry up and move – but he’d hold the equipment for $1,000 deposit.
Matt plunked down the $1,000 and got approved for financing… but the seller then changed the price and started getting physically aggressive.
Long story short, Matt never saw that $1,000 again.
This isn’t to say that there aren’t honest deals to be found, but we encounter these sort of stories often.
Here’s a good alternative to taking your chances with classified ads
(that most buyers don’t know about…)
Many custom food truck builders also have an inventory of used trucks available.
While buying a truck from the manufacturer might not be quite as inexpensive as buying off of Ebay, there are 2 very important advantages of getting your truck from a dealer/ manufacturer:
- You are extremely unlikely to get ripped off
- While a private party selling a truck has a big incentive to be dishonest with you about the true condition of a food truck, a dealer has a reputation to protect. This is especially true in the food truck industry as it is a very small, tight-knit community.
How to Find the Best Custom Builder of Food Trucks
We deal with several food truck builders across the country, some of which are great and some of which are OK.
One of the biggest considerations you should look for when you are buying a food truck:
How does the builder’s website look?
At first glance, it shouldn’t matter very much, unless you really think about it.
If you were to go start a dump truck business, it wouldn’t really matter much what the dump truck looked like….
But going into the food truck business, you want people to see your truck from a block away and come running, right?
How your food truck looks will have a huge impact on your sales, so you want to make sure you’re getting the truck from someone who knows how to make you look awesome.
And, let’s face it, if they can’t even make themselves look awesome, how, exactly, are they going to make you look awesome?
Other things to Consider if When You Look for Food Truck Dealers
One of the most important things to look for:
How solid are they as a company?
We do encounter many “2 guys in a garage” type companies, and in general they are a little bit less expensive than going with a larger company like Prestige.
Here’s the problem:
While a lot of these smaller guys do great work, there is a huge number of them that fail (even the good ones).
What this means is that if there is a problem with the truck, many of the warranties given as part of your contract are only valid if the company that made those warranties still exists.
For that reason, if you can afford, or acquire financing for, a truck with a larger, more successful company like Prestige, that is often the route you should take.
While Prestige Food Trucks certainly isn’t the only top quality vendor in the marketplace, our experience is that they are certainly worthy of a look if you are considering buying a food truck.
Interested in getting into the food truck industry? Request a quote from us today to get going!
For more food truck advice and inspiration, check out the rest of our blog here.