VALUATION ACCOUNTS:

Valuation and allowance accounts include the following (in thousands):

	Balance Beginning of Year		Net Charged to Costs and Expenses		Net Write- Offs			Balance End of Year

2016
Reserve for accounts receivable	$	506	$	1,415	$	(1,372	)	$	549
Reserve for warranty receivables		105		833		(824	)		114
Reserve for parts inventory		7,291		3,400		(5,806	)		4,885
Reserve for commercial vehicle inventory		6,541		9,623		(11,062	)		5,102

2015
Reserve for accounts receivable	$	639	$	992	$	(1,125	)	$	506
Reserve for warranty receivables		140		1,677		(1,712	)		105
Reserve for parts inventory		5,067		4,215		(1,991	)		7,291
Reserve for commercial vehicle inventory		10,644		8,417		(12,520	)		6,541

2014
Reserve for accounts receivable	$	821	$	919	$	(1,101	)	$	639
Reserve for warranty receivables		419		411		(690	)		140
Reserve for parts inventory		4,416		2,547		(1,896	)		5,067
Reserve for commercial vehicle inventory		7,395		7,877		(4,628	)		10,644

Allowance for Doubtful Receivables

The Company sells a majority of its customer accounts receivable on a non-recourse basis to a

third

-party that is responsible for qualifying the customer for credit at the point of sale. If the

third

-party approves the customer for credit, then the

third

-party assumes all credit risk related to the transaction. For accounts receivable that the Company does not sell or that are sold with recourse to the Company, an allowance for doubtful receivables is provided after considering historical loss experience and other factors that might affect the collection of such accounts receivable.

The Company provides an allowance for uncollectible warranty receivables. The Company evaluates the collectability of its warranty claims receivable based on a combination of factors, including aging and correspondence with the applicable manufacturer. Management reviews the warranty claims receivable aging and adjusts the allowance based on historical experience. The Company records charge-offs related to warranty receivables after it is determined that a receivable will not be fully collected.

Inventory

The Company provides a reserve for obsolete and slow moving parts. The reserve is reviewed and, if necessary, adjustments are made on a quarterly basis. The Company relies on historical information to support its reserve. Once the inventory is written down, the Company does not reverse any reserve balance until the inventory is sold.

The valuation for new and used commercial vehicle inventory is based on specific identification. A detail of new and used commercial vehicle inventory is reviewed and, if necessary, adjustments to the value of specific vehicles are made on a quarterly basis.