The 2020 Mid-Year Economic Update_long

EPA Standards Drive Up Cost of Trucks


The cost to make medium- and heavy-duty truck engines is about to go up, thanks to new EPA standards. A purchase in the first quarter of 2007 might save some dollars if you’re planning to update your fleet. Also be aware of increased operating and maintenance costs for new engines that will decrease emissions by nearly 90 percent.


New standards from the Environmental Protection Agency, in effect January 2007, will require engines updated with advanced emission controls and will increase the cost of trucks distributors use for delivery.


Prices will likely go up about $5,000 for a medium-duty truck (Classes 3-7), and anywhere from $8,000 to $12,000 for a Class 8 heavy-duty truck, says Jim Westlake, executive director of the American Truck Dealers, a division of the National Automobile Dealers Association.


The price increase is unfortunately going to be a cost of doing business,” he says.


What’s more, operating and maintenance costs will jump with the new engines, and residual value will fall.


It’s possible the new trucks will get less fuel mileage as well, Westlake says.


Engines made after Jan. 1 must comply with the new standards. The new standards require ultralow sulfur diesel, which enables the use of advanced emission controls on diesel vehicles.



When to Buy
If you are in the market for a truck, your best bet is a 2007 truck made using an engine built before Dec. 31, 2006.


“There’s no time like the present,” Westlake says. Current model year engines are likely to last in inventory 45-60 days into 2007.


Or look into the used-truck market, but be prepared for a slight increase in price there as well. Demand will rise for used trucks and so values will also go up, Westlake says.


There has been a surge of truck sales in anticipation of price increases on trucks built to the new standards.


What about waiting to buy in hopes the price will eventually go down? “There may be a leveling between 2007 and 2010, but you can look for another significant increase by 2010,” Westlake says.


In 2010, even stricter rules for engines will go into effect.



Marketing Tool
The EPA expects the engine fleet to be fully turned over by 2030.


The benefits to the environment will be significant, Westlake says. The new standards, combined with the use of ultralow sulfur diesel fuel, are meant to eventually cut pollution including nitrogen oxide emissions and particulate matter (more commonly referred to as soot) by more than 90 percent.


According to the EPA, heavy-duty trucks and buses account for about one-third of nitrogen oxide emissions and one-quarter of particulate matter emissions from mobile sources.


If you think your customers or community may appreciate your appreciation of the environment, use the purchase of a truck with a 2007 engine in your marketing campaigns. “These engines will be much cleaner. It’s a good PR move,” Westlake says.

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