Commercial truck financing can be a formidable obstacle to the uninitiated. Questions about cost, down payment, type of vehicle and credit needed are some of the determinations which need to be assessed when considering a truck purchase. Each individual circumstance, such as credit, can affect a buyer’s ability to secure financing.
As detailed here down payment amounts and monthly finance payments are credit based decisions. Before seeking financing a buyer will also have to determine the type of truck to purchase. Vocational trucks, like dump trucks tend to be easier to finance than semi-trucks. Some financial institutions refuse to finance long haul trucks and others specialize in them.
The following risk factors are almost certain to be difficult for financing;
- New business
- Poor credit
- Owner/ operator
- Private party purchase
- Low cash reserves
- Purchase of old truck
More serious issues such as past due child support, recent vehicle repossession and bankruptcy may outright nullify any finance opportunity.
New operators need about two years or more of service and experience before being seriously considered for loans. However, there are some financing opportunities for new operators and those with poor credit (660 or less credit score). Usually, a 15% down payment equates to an 80% successful finance rate.
Truck age is also a factor to consider when seeking financing. Trucks which are 10 years old or newer have few problems with financing. Trucks 10-15 years old are slightly more difficult to finance but tend to be approved. Trucks more than 15 years old are difficult to finance, mostly because of more frequent breakdowns and they are harder to resell, if necessary.
Owner/ operator financing is more conducive in fleet operations than single operators. The idea here is that a fleet owner with 5 trucks only loses 20% of his revenue if a truck breaks down while a single truck owner loses 100% of his revenue if his truck is impacted. In this scenario, the fleet owner is still capable of making payments while the truck is repaired and the single owner must wait until the truck is repaired before he can generate income again.
As shown, truck financing can be a fairly complex process. However, when you are ready to make a purchase contact Robertson Truck Sales where we take the complexity out of the financing process. We are Mid-Ohio’s largest pre-owned truck dealer. Whatever your truck needs may be Robertson Truck Sales has the solution.
National Advance Group
1 Linden Place Suite 404
Great Neck, NY 11021