Local small dealer finances trucks in house, no credit check....

Discussion in 'Lease Purchase Trucking Forum' started by runningrhino, Oct 8, 2018.

  1. runningrhino

    runningrhino Bobtail Member

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    Oct 6, 2018
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    So down the road from our shop we have an auto dealer who also deals in some tractor trailers. Its a mom and pop operation. He typically has 3 or 4 trucks on his lot that he buys at an auction and finances to owner ops. This is how his deal is structured:

    1) You take a look at his trucks (he only usually has 2-4 at a time), and see which one you like.
    2) He lets you take it to any mechanic or dealer in the area for an inspection
    3) You pay $5,000-$10,000 down (depending on price of the truck)
    4) Afterwards, you make $2,000 a month payments until the truck is paid off, no interest.

    Its basically a lease to own program. He makes his money on markup. Typically buys the truck for $25,000-$30,000 at an auction and marks it up an easy $10k-$15k. So you can expect to be somewhat overpaying for what you are getting.

    But, the upside of this is no credit check, no credit reporting, none of that. Its actually seems like a really solid deal. Over the past year I have seen him sell close to 10 trucks like this, and I never see them back on his lot, so it must be working.
     
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  3. Young_Gun

    Young_Gun Light Load Member

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    When something is "to good to be true" then it usually is; I would extremely cautious about that. Trucks sold at auction, aren't the trucks you see on regular used truck dealers' lots. These are the NavaStar MaxForces, or truck makes and models that NO ONE wants. There is a reason they're at an auction and not at a dealership.
     
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  4. x1Heavy

    x1Heavy Road Train Member

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    It's too good to be true.

    I bought a tractor at 41,000 back in the 90's on very little to nothing at all and a credit that causes people to laugh.

    For reasons not germane to this post, that tractor was back at the seller within a week.

    I fully expect a overall slowdown in the USA Economy what with the raising of interest and a slow cracking in the structural supports of the People unable to maintain payments.
     
  5. Young_Gun

    Young_Gun Light Load Member

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    Hope you're wrong --- Our truck/tractor sales are booming. Would hate for that to dip.
     
  6. x1Heavy

    x1Heavy Road Train Member

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    White County, Arkansas
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    Retail truck orders delayed by as much as 9 months.

    Third Quarter auto sales for example has been reduced to nothing and in decline in some brands. The plants must have layoffs into 1st quarter next year as the dealerships fill with cars that wont sell in 4 months.

    By the time everyone has a truck next year A percentage are going to be sitting. Cass Index shows about 11% are already there. Sitting. The Tarriff war we are enduring does not help. The one thing that will cause a sky high vertical jump in trucking would be a all out conventional war. It wont be the first time.

    We go through good times and we should stack money and fill the barn against the coming of slow times, holidays and economic downturns. Everything so far as been burnt on cheap 0% credit last 10 years or so. That's been stopped.

    Now the defaulting rates across several sectors have been going up.

    I would like us all to have never ending piles of money and never have to sit or eat cat food trying to make that payment. But Life is not like that. In good times you make ready for the bad.
     
  7. runningrhino

    runningrhino Bobtail Member

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    Oct 6, 2018
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    No, not really. His lineup now is a Freightliner Cascadia with a Detroit engine, a Volvo D13, and something else. A lot of auction trucks are repos, or just people with large fleets who turn their trucks in to get new ones, etc.
     
  8. brian991219

    brian991219 Road Train Member

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    Not true. Where do you think the used truck dealer buys their inventory? If they don't get it directly from a mega fleet, which is rare, they buy it at auction -just like the used car dealers do. Even the name brand franchise dealers like Rush Peterbilt buy their used trucks at auction. It is rare for a local trade to stay on the lot where it was traded in, not how the vehicle sales business works.

    When I was running my auto transport business the auctions I delivered to had hundreds of heavy commercial trucks on the block weekly. Not just repos either, many directly from large fleets or truck dealers that took them in as trade.

    You are right to caution anyone about the International trucks, especially those with MaxxForce engines. These are real lemons and have little to no retail value.
     
  9. cprems

    cprems Light Load Member

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    Where is this small dealership located?
     
  10. runningrhino

    runningrhino Bobtail Member

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    Oct 6, 2018
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    Harrisonburg, VA
     
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  11. Electric

    Electric Bobtail Member

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    The Truck/Car Business is based on Inventory, profit is controlled by Turn (i.e. Length of time to Turn-over the Inventory), and an item which does not sell can't add to profit. Say 30% of a dealers $1,000,000 Inventory is not moving, that's $300K in dead Money. That's were Auctions come in to play; dealers sell/buy at Auctions to Replace dead with hopefully Live Inventory; an item that is dead in one area may be alive in another.
    One way to obtain a good rate as a Retail buyer is pay attention to the 30/60/90 day rule.
    If you watch, often you will see price drops in those increments. The closer to 90 Days (how long it has been on the Dealers Lot) is the best time to buy, as the Dealer is apt to get more from you than at auction.
     
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