Cash vs Financing want another truck.

1. Why would I send a finance company 10k so that I can keep from sending uncle sam 3k.

2. Most companies that struggle to survive do so because of debt.

Personally, I hate debt. Guess I am old school but what I do is that I set aside a maintenance/new to me truck fund until I have 50k in there. I do all my maintenance from that account and replenish it when I use it. This way I always have the money to do what ever needs to be done, including purchasing a replacement.

 

Cash is always good newer trucks have just as many if not more problems then the old ones and if you don't have a payment it makes it a little easier to pic and chose the loads and this summer when the fuel prices hit $4.50-$5.00 or more it will be much nicer to have a cheaper truck cheaper insurance and no payments the on exception would be if you run California then u might be sol and have to get newer one

 

This, new trucks are not any better than older trucks that have been maintained. Unless you NEED to go to California, pay cash for your second truck, making payments every month to a lending institution sucks.

 

Nothing wrong with financing at least a little just to keep your credit rating looking good and perhaps improving over time. At some point a trucker who's in it for the "long haul" will need to finance something, or acquire a line of credit, or something. A lot depends on how certain you are in your current lease in terms of gross expected. Some leases leave zero room for a note (don't know why you'd want to be in one of these), others pay well enough to have some sort of permanent note.

 

Check with a local bank about a Small a Business Administration loan. Usually around 6% with better terms than usual financing options.

 

Where does the ability to depreciate a truck stop at in terms of truck age? Losing any possible depreciation advantage may or may not be something to consider when considering buying "used" or "old and used" and financing costs may be more then offset with depreciation

 

Depreciation is not discriminatory against age.

 

No truck payment is great!

With that being, both old and new trucks break down as someone already previously stated. However, your advantage with a newer truck (depending how new) is that you still have some warranty left that might cover quite a bit of repairs if it does break down. Often times repairs on a old truck can be more expensive than a payment on a new truck. Yeah, with an old truck you might run without a problem for 3 months, and then during the 4th month something breaks that costs you as much or more than 3 payments would have cost you on a new truck.


At the end its risky either way you go. What sucks the most is if you have a truck that's financed and something breaks that's not covered under warranty. Then you're paying the repair and the payment!

You just have to inspect both trucks really well, and see which one would possibly cost you less over the long term. Another thing on a older truck is to calculate how long you could actually use it before having to do a major service or replace it.