Pain points financing/ refinancing a vehicle

Do you have LOTS of cash, excellent business credit or are you hoping to buy a cheap truck for little cash and become a millionaire this year?

 

The four trucks I’ve financed have all been done through my local bank where I’ve had an account since high school. I’ve had no interest in trying to go through a big name bank or using manufacturer’s financing. I work with people I know and everything can be handled with a phone call.

 

Look this isn't like buying a car, it is a high-risk finance situation and because you are new, you should jump through hoops to get a truck.

The lender has to make sure that you are worthy of a $200k plus loan.

If you default, it costs them a lot more than the value of the truck/trailer.

 

Online will be the most expensive

 

There is plenty of competition. Literally every bank in this country has the ability to loan money for a truck. Most choose not to because of the high failure rate and they don’t want to be in the business of selling repo’d trucks.

 

"Lease to own" schemes are pure sucker bait. NOBODY ever makes out ahead on any of them, and the vast majority end in your default and/or bankruptcy.

 

Since you're new to the industry, I'd caution you against buying or leasing a truck at this time. Spend several years learning the business - especially the segment you're interested in - as a company driver before you take the leap into running your own business with a purchased or leased truck. Hauling produce OTR is a lot different than regional hazmat tankers, which are much different than OS/OW loads, which are different from DoD freight, etc.

When you get ready to buy/lease, you should have at least 90 days' worth of operating expenses in the bank that you will use to cover opex until your receivables start coming in. This is over and above the money you'll need for a down payment, insurance, and other startup expenses. And the higher your down payment, the less risk the lender is assuming from you so the more likely you are to get approved - and as a bonus, a higher down payment means lower monthly payments.

Remember that everything is a trade-off. A "quick & easy" online lender will probably charge a higher interest rate due to taking shortcuts - thus assuming higher risk - on verifying applicants' creditworthiness.

And whatever you do, DO NOT lease or lease-purchase a truck from a motor carrier. Only a dang fool would owe a truck payment to the same company that controls their income.