Why is it so hard to finance a new truck

What abount OODIA?

OODIA says it does truck loans at 6% http://www.ooida.com/Benefits&Services/Services/Truck_Finance/truck_finance.shtml.

 

We haven't had any issues from banks other than requiring more financial info on a new purchase. We are getting a good rate right now from banks. Below 6% even volvo finance gave us a rate of lower than what you got. I think you have two issues. First issue is your trying to finance a glider and from your figures you will be paying $128,000. I am waiting on an apu to be put in one brand new volvo that we got for that same price minus the APU. There are deals out there in the new truck market. These dealers are getting in what they call 2014 models and they still have 2013 models on the lot. Gliders are harder to get financed than a new truck. Second problem that adds to the glider problem is that your financials are showing a loss. Would you loan money to a stranger that you know actually spent $1,100 more than he made? I know I wouldn't. Your credit score is a plus but you also have two negatives in the situation with the glider and the financials. Try to bring one of the other issues to a plus. Either try a new truck or get your financials straight for your first quarter to show a profit that can handle a new truck payment. It's not the banks fault. Yes your credit score is good but your financial report isn't. Lending money to people that they shouldn't have is what got alot of banks in trouble and they have stopped a lot of it.

 

I was at the Volvo dealer talking to a salesman about this very thing. I just bought a $40,000 2013 Nissan Pathfinder. A vehicle that will never make a dime in its life, merely cost me money. I didn't have to produce taxes, paycheck stubs, or anything beyond stated income. I put down 20% as that drove my interest rate down to 2.5%!!! If I went to buy a $40,000 truck, I'd have to jump through hoops and kiss the feet of the finance company to get an 11% rate, if I'm lucky. If I am still an o/o 11 years after buying my first truck, that should be all you need. BTW, I've never had a local bank or credit union even interested in financing a truck here in FL, and I've tried.

 

The difference between a car loan and a truck loan is a car loan is personal financing, while a truck loan is commercial financing. Commercial loans are there to support a business, which may or may not go out of business. The personal loan is attached to a person (with the thought you can figure out a way to make good on the loan), and additionally, makes up a MUCH larger pool of purchasers, so credit companies can afford to take more losses on that aspect of their business before they start losing money. That's why rates for cars vs. trucks (or frankly, credit cards vs commercial loans) is never near to being equal.

 

The big problem with banks and truck loans is it is a market they don't understand. We have to fight the perception that trucking is a business that can't make money, the challenge is that there are too many O/O that are proving that you can't. Not because there isn't money to be made but because they lack the business sense to do so. Its also a not large enough market that they have to be part of it like the regular car loan industry. I would hazard a guess that because they do so few truck loans as it is, they fear they will not make a profit off of it because they know that if one loan goes south they need x number of loans to cover the loss and they don't have enough on the books. They also know that truck specific financing companies exist and are questioning why you came to them, were you turned down? looking for a better rate, if that is the rate a company needs why offer any lower? (my logic but probably wrong).

 

Oh I understand the finance game, probably better than most here. I was just complaining a bit. I also understand the beating and losses the truck finance companies took in 08. I think the glider has a lot to do with it, and when I spec'ed my 2014 Western Star glider the other day, I automatically assumed it would have to be Daimler financing it. I'm still not sure what I'm going to do, WS glider or new Volvo 730, or just keep running this paid for truck.

 

O/O is the only way to go.. been there done that.

 

Great point and I believe this is why the deal fell apart. The OP said his accountant has his business showing a loss for a few years so the bank saw it as too much risk and wouldnt finance. If it were a personal loan he would have been fine because he probably showed a nice income from his business. Not sure if showing a loss was because of actual losses or if it was an accounting measure to reduce taxes but it not all bad to pay taxes....it is confirmation you are operating at a profit.

 

There some variables but kw dealer applied to GE Financial and PACCAR for 20% loan of the full new kw truck for my still to be open incorporated bussines....so no buss credit..truck still must to be built yet...and they got both under 7% loan for 4 y..today...still want it for 2y to start building a credit on the corp name ....