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Different Ways to Finance a New or Used Truck

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When your business relies on the quality of your vehicles, you may often find yourself in the market for a new truck. It’s important to know that you don’t need to wait to add a reliable vehicle to your fleet. There are several options you can choose from to cover the costs if you require a new or used truck.

Financing options for new or used truck

Getting a new truck for your company can seem daunting, but it doesn’t have to be. You don’t need to worry about having enough cash to pay for the vehicle. There are financing options that you can find to suit your business.

Benefits of Truck Financing

There are a number of benefits of financing a truck including:

  • Adding a new vehicle to your fleet faster
  • Increasing your company revenue by being able to offer more to customers
  • Building your business credit rating with a loan you can afford

Whatever industry you are in and no matter what the reasons you have to want a new truck, some lenders can help you make it happen.

One thing to keep in mind is that longer loan terms are not always the best decision for you. While you can get a lower monthly payment if you take longer to pay, the longer you take to pay back the money, the more you will spend in interest fees and other costs.

Tips for Financing Your Vehicle

When transportation is part of what you do, purchasing several trucks is a necessity. Yet, no matter how many years you have been in business, you may not have the cash on hand to buy extra vehicles — that’s why truck loans are so important. But, without proper planning and consideration, you could end up with a truck loan that is more than the vehicle is worth.

There are some ways you can prepare to get the best financing options when it’s time to purchase a new truck. These include:

  1. New or used

    While you may financially be able to afford a brand new truck, it might be better to get a less expensive one. Consider the long-term cost compared to the benefits. For example, how much revenue will the new truck bring to your business? Will that offset the cost of paying more for a newer vehicle?

  2. Be prepared

    Weigh the costs and benefits of financing before you decide on a vehicle. This can help you know how to negotiate the best deal as you will be thinking about the full cost of purchasing the vehicle.

  3. Down payment

    The more you can make as a down payment, the less you will have to pay in the long run, even if you opt for a longer loan term. Sellers don’t usually require that you make a down payment on your truck purchase, but by putting 20 percent or more down, you can save yourself interest payments in the future.

  4. Credit rating

    You must know your credit rating before you start looking at your financing options. Understanding what your rate is can help you negotiate better financing terms. The best rates — which are the ones that sellers promote — are usually only for those who have high credit ratings. Even if you don’t have a 750 or higher rating, don’t feel like you have to take the first-rate that is offered. It may be time-consuming, but it will be worth it to shop around first.

  5. Online lending options

    For those with a less than stellar credit rating, consider getting some quotes from online lenders, like Truck Loan Center. Knowing how to get the best deal when you purchase your truck is worth the extra effort you put in before you buy.

  6. Pay cash for extras

    The cost of financing can increase when you consider all the extra fees you pay to purchase and finance your truck. It’s best to pay cash for these items, including sales tax, documentation fee, registration fee, etc. Remember that these fees can be rolled up into your financing, but they only increase your loan, not your truck’s value.

What to Look for When Financing Your Vehicle

Financing your truck purchase can be a beneficial experience if you are equipped for the process. There are some ways that you can prepare yourself so that you don’t end up getting into a situation that you can’t afford. Here are some things to consider when financing your truck:

  1. Shorter-term, higher payments

    Negotiate the best deal and opt for higher monthly payments if it allows you to pay the truck off quicker. Vehicles depreciate fast, so you want to pay your truck off as soon as you can.

    Many salespeople will present you with options that lower your monthly payments, but these lower payments are not because the truck price has changed. Rather, they are showing you lower monthly payments with higher interest costs and a longer-term loan. The reality is that banks will charge higher interest rates for longer-term loans. Understanding this helps you to see the overall costs of financing your truck.

  2. Lost equity

    Remember that your truck will lose its equity quickly. That means, if you take out a loan with a longer-term, you could end up paying for a vehicle that has lost much of its value. By the time you need a new vehicle, you may have just finished paying for the one you have. In this case, you’ll also be dealing with negative equity. Negative equity simply means that you owe more than the truck is worth, should you try to sell it.

  3. Transparency

    You should be able to understand how the financing process will work. A lender needs to be transparent with you about the costs and all the term details of your financing. Don’t be shy to ask questions about the terms of the agreement. If your lender is not transparent with you, you don’t have to agree to the financing, and you can look elsewhere.

For more information about financing options for truck purchases, call Truck Loan Center at 1-866-230-0094 or contact us here.

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