Interest Rates

I just applied for a 90k truck as a first time buyer. They’re asking %20 down. Around $2.250 a month for 42 months. I don’t really know what interest rate it comes to. I have around 760 FICO score

 

YGTBSM. You are running a business and you don't know what interest rate they are raping you with?

Your rate is 16% per annum.

 

Thanks. I got the call few hours ago from the dealer. I didn’t have chance to go into details yet.

 

First truck was 20% down, 18% interest. I have since bought a second truck and another trailer. Both at no down and 8.9% interest with the same lender. The key is building up a strong relationship with the lender. Now if I want to buy truck or trailer all I do is email a copy of the purchase order and they fund it without even asking questions.
This process with this lender has taken me about a year. But it has been extremely beneficial.

 

I think it's really important to understand that any interest paid above whatever the average interest paid in the industry is ultimately going to come out of your own personal bottom line. No matter what you would have made that much MORE money than you did that year, and that additional cost will squeeze you very hard in bad times.

I think picking when you enter the market is pretty important. @BoyWander seems like a good dude but I'm not sure that it's 'fair' that he's succeeding and @DoubleYellow failed. It seems to me that if you enter towards the end of a trucking market up cycle (and you really should be paying attention to this kind of thing if you want to be a successful O/O) your chances of survival are basically 0.

I have no indication that this cycle is anywhere near over. In fact I think it's got quite a ways to run assuming the Chamber of Commerce doesn't get their way and change HOS rules to something that puts capacity back on the road. I could see this going 5-10 years easily if things stay the way they are today.

So yeah it's a good time to buy a truck and become an O/O probably. That doesn't mean it won't be hard, and that doesn't mean it won't be risky. Many of you will fail. Most of those that fail will tell you it's because it's a bad business. They are extremely incorrect. It's an excellent business, but it's very competitive, which means that you probably can't afford to pay 3 times as much interest on your equipment as your competitors long term.

EDIT: But remember that this trucking cost thing is a BIG problem for a bunch of really rich and powerful people. And that money is actually largely flowing out to us small operators in the market! Expect to see the cavalry show up to protect the interests of big business any minute now.

 

Absolutely horrified at the quoted interest rates... i am seeing posted here. 15-18%
Wth??? I dont mind making the bankers boat payment but i am not putting his kids through college too...

 

Hey guys. Don't know how many of you guys this might help, but this is the finance situation in Canada.

Anyone with clean credit and 3+ years of Owner Operator experience can get financed in Canada with as little as 5% down on a new truck or trailer. The rate will be somewhere in the high 6's to low 7's right now. It was almost a full point cheaper earlier this year but rates have been creeping up. Term will be up to 60 months on a typical highway tractor and 72 months on a vocational unit or a trailer.

New O/Os can expect to put 10-15% down but will have a higher bar to pass. Being a home owner and having a Net Worth of $ 200K really helps. We do not put a lien on the house (unlike the banks). If you can fit this requirement, then the rates will be similar to those for an existing O/O.

Rates on used equipment will be similar unless the equipment is older and falls out the the guidelines of what most lenders would do. If that occurs the rates for the old equipment will be a lot higher (north of 10%) as the number of companies who finance this stuff is few and hence not a lot of competition.

There's a lot of companies out there who don't tell you the truth so be very wary. I've seen guys find out that their great 4.9% deal was actually 9.4% It happens far too often.

 

Home improvements ONLY help a house sell faster. You can try and ask what every you want .... but at the end of the day house values are based off of comps (prev. houses sold) in your area.

 

well I need some input, I have 750 credit score went to Daimler through frieghtliner. they offered me 1200 a month for 36 months on a 20,000 dollar loan after putting 50 percent down. that's like 45% interest, and this is my first truck.

 

Go to your local bank.
Damlier offered me 15.8, local bank was happy to have my business at 5.8.