You did it! After much consideration, you have decided to start your own company. But as you go through your business plan you start to wonder, “How do I choose the right semi truck financing for my company?”
If you have been thinking about semi truck financing and want to learn more, read on.
A Used Semi Truck Can Work Just as Good as New.
Choose Between New or Used
One of the first things you need to decide is whether you’ll finance a new or used semi-truck. So how do you decide? Let’s go over the pros and cons of each.
The pros of used trucks are:
- Inexpensive prices. A used semi-truck is often less expensive than a new one. A new truck could easily be $150,000 or more. But a used truck, depending on the age and condition, can be as low as $75,000 or less. This is perfect for companies just starting out that don’t want to spend much. This also perfect for your loan rate. Because you’ll be financing a smaller amount the overall cost of the loan could be cheaper.
- Lightly used can be good as new. Some lightly used semi trucks can work just as well as new. Just be sure to find out how the previous owner cared for it.
- Used trucks can be sturdier. According to Rigbooks, many semi-truck drivers prefer older models because they are well built and more powerful. However, it’s always best to research if this is true for the semi-truck you’re looking at. So be sure to do your homework before settling on a used model.
The cons for used trucks are:
- You won’t be the first owner. Because you’re not the first person to own the semi-truck there could be issues that need fixing. This is why it’s always a good idea to have the truck checked out by an experienced mechanic. You should also see if you can get a history report to find out if it needs any maintenance work done.
- It might be harder to get a clear history. Semi-trucks sold by private parties instead of dealers might not come with a history report. So you might not know what the truck has been through, like accidents.
The best thing to do when you’re considering a used truck is to check out RigDig. RigDig is like CarMax for semi-trucks. For a small fee, it can generate a complete history report so you know exactly what you’re buying.
Being the first owner of a semi-truck means you’ll know it’s history since you’ll be the one writing it.
The pros of new trucks are:
- You’re the first owner. Being the first owner of a semi-truck means you’ll know its history since you’ll be the one writing it. This also means that surprise issues can’t pop up out of anywhere. You’ll know exactly what kind of semi-truck you’re getting when you finance it.
- Extended warranties. A lot of new semi-trucks come with warranties to cover the unexpected. So if something suddenly breaks, you don’t have to pay for it.
- Durability. If you practice good maintenance and treat your semi-truck like it’s family, it can last you a pretty long time.
The cons of new trucks are:
- The price. Like we stated above, a new truck is not cheap. If you’re starting out and your credit isn’t great, financing rates might be a little high. This isn’t to say the rates would be unaffordable, just a little higher than you might want to pay.
- New semi-trucks seem risky. Look, you know the new semi you want will work for you. But most banks and traditional lenders don’t. So if they deem your chosen new truck too risky, they might not work with you.
NOTE: No matter what type of truck you choose, be sure you know exactly what you want before you shop for financing – which leads to our next topic…
Find a Financier That Understands Semi Trucks
When it comes to getting semi truck financing where you finance matters. As we have said before, banks will find any reason not to finance. It’s not that they don’t want to; they do. They are banks, after all. But they don’t like to finance anything that isn’t a safe bet. Not only that, a lot of banks don’t have extensive knowledge of semi-trucks. So even though you know your semi-truck might be a great buy for you, the bank might not agree. Worst of all, your credit score has to be impossibly good for a bank to consider you. If you have bad credit your bank will say no.
This is why we always advise working with an alternative financier. There are a few reasons for this:
- Bad credit. Even if you have bad credit an alternative financier will work with you. That’s because they know you’re more than your credit score. So when they’re considering you for financing, they’re considering everything. Your business plan, the semi-truck you want, everything.
- Young businesses. Are you just starting out? Have you only been in business for a few days? No problem! An alternative financier will still work with you. That’s because they see the potential in you. You’re not a bunch of numbers and facts. You’re a business owner with an idea. And they want to help that idea grow.
- Industry knowledge. One of the best reasons to work with an alternative financier is that they know the semi-truck industry. Some alternative financiers work specifically with businesses like yours so they know exactly what type of financing program you need.
Get Semi Truck Financing From First Capital Business Finance!
The only sure way to know what type of semi-truck financing you can expect is to speak with the financial experts at First Capital Business Finance. It just takes a few minutes to get pre-qualified over the phone! Ready to start your fleet of semi-trucks? Simply call us at 888-565-6692 or click below to finance your future.
How to Choose the Right Semi Truck for Financing | First Capital Business Finance