Bill Farrar, Northeast district finance manager for Daimler Truck Financial, sees himself as a partner, collaborating with Thomas Built bus dealers and school districts to help schools update their fleets of aging buses.
“We realize money is tight for school districts. Times are tough, and some schools haven’t been able to buy the buses they need. We work together to find solutions,” said Farrar. “Just because a district has limited funds today doesn’t mean they can’t replace their oldest buses.”
With the average cost of buses increasing due to rising material costs, and with interest rates at an all-time low, Farrar has been able to offer some attractive options.
Scott Pfender, director of transportation for Suwannee School District in Live Oak, Fla., can speak to the value of this approach from personal experience. “We had a fleet of 70 buses with an average age of about 12 years,” said Pfender. “This is a very rural district, with about 60 percent lime rock roads, and our maintenance and fuel costs for those older buses were a concern.”
The school district finance director had approved the purchase of four buses a year when Pfender started talking to Thomas Built Buses dealer, Matthews Buses, Inc., in Orlando, Fla.
Working with Daimler Truck Financial, Matthews was able to offer an innovative five-year municipal lease-purchase approach that made it possible for the school district to purchase 20 new Thomas Built Saf-T-Liner® C2 buses, replacing a third of the district’s aging fleet all at once, within its limited budget.
The solution? Rather than paying cash for new buses, as is typical for most school districts, the municipal lease-purchase plan freed up cash, so payments were more manageable. The approach was made possible by combining very low-interest rates with the sophisticated knowledge of the Daimler Truck Financial team. “The interest component of municipal lease-purchase payments is exempt from federal income taxes, and municipal lease-purchases do not have to be carried on the books as a debt,” explained Farrar.
“You may think buses are not affordable, but there may be a way to update your fleet and get better mileage and more efficient buses that require less maintenance,” Farrar said. “Unlike banks, we don’t sell mortgages or debit cards. The role of Daimler Truck Financial is to help schools update their fleets with Thomas Built buses. We work with school districts all over the country to find a solution and earn their trust. We have a municipal training site for dealers on our website, and we offer live webinars, as well.”
The Suwannee School District is “very, very happy with our new buses,” said Pfender. “And with the service. We get regular on-site visits from Matthews and their mobile service truck when needed. The C2s average three or four miles per gallon better fuel consumption than our old buses and, at 10,000 miles per bus per year for a third of our fleet and diesel fuel at $3.50 a gallon, that really adds up. And we’ve saved a lot more in lower maintenance and parts costs. Even our tire costs have gone way down with 20 new buses.”
Pfender reported that the district’s drivers love the new buses, and so do the kids who ride those buses. “Our drivers use the sportier-looking C2s as an incentive, saying to the kids: ‘If y’all don’t clean up this bus, we’ll get the old bus back’.”
Suwannee was the first school district in the north Florida area to take the municipal lease-purchase route to upgrading its fleet. Pfender said: “We’re conservative in north Florida, and this was way outside the box for us. When Matthews presented this approach, my first question was: ‘Who else is doing it?’ The answer was ‘no one.’ But I trust them, and they made it really easy. We asked for the best deal. And we got it.”
Today multiple districts in the north Florida area also are using municipal lease-purchase financing with Daimler Truck Financial.