If you’re thinking about a loan approval to finance a truck, one question arises: can you finance an older truck? It feels obvious that an older or a second hand truck would cost a lot less than a new one, hence it would be far easier and budget-friendly to finance it. But is it, really? Let us break it down for you today.
Old Truck Finance
Truck financing for new trucks may differ considerably from that for used trucks. At the very least, on a monthly basis. When repaying a loan for a new truck, you’ll be paying an average of 40% more per month than you would for an older one.
For example, let’s assume that the new version of the same model costs $200,000 and the older one costs $100,000. You’ll be paying ~$3000 per month for the new one, and probably ~$1800 for the old, with a $1200 difference each month.
Let’s take a look at all the important factors contributing to this trivial difference.
1. How Much Is the Finance Amount?
In the previous example, of course the total amounts for both differ by a huge margin, but on the other hand the loan for a higher amount, i.e., amounts higher than $100,000 attract lower interest rates as well. Hence, it’s paramount that you consider all the factors and pros and cons involved for both options.
Asset Finance Shop Tip: To get more ideas on how much you’ll have to repay after financing a truck, you can try some online loan repayment calculators available. Of course, they aren’t 100% accurate, but they’ll definitely give you a ballpark of how much you’ll have to repay.
2. How Long Is the Truck Loan Term?
The maximum loan payback period is five years if the truck is older than 10 years. Some banks will only allow you to work for three years, resulting in excessive repayments, but this is where our expertise comes in.
If a truck is more than 5 years old but less than 8 years old, then you’ll get a loan for the term of 5 years with the option of a balloon. This is of course more comfortable option as you’ll have to pay less monthly amounts as compared to those for older trucks.
Therefore, it’s a good idea to deal with a reliable truck finance broker like us here at the Asset Finance Shop. We’ll guide you every step of the way and let you know what we can do to get you the best deal for your overall business goals.
3. What Are the Approval Criteria?
As we mentioned earlier, it’s hard for a Bank to get a finance approval for a truck that’s over a decade old. Trucks of this age range are considered high risk assets. Even if the Bank does agree on approving the loan, they might ask for a deposit, which doesn’t happen in the case of financing comparatively newer trucks. We at the Asset Finance Shop can avoid these issues and get you the truck or machinery you need at any age!
4. What Are Tax Deductions Like?
The ATO has introduced a very popular instant asset write off up to $150,000
Asset Finance Shop Tip: It’s best to speak with a finance broker like the Asset Finance Shop, who can break down the tax deductions based on the truck you’re financing, the amount of loan you want to take out, and the methods used to make those deductions.
Although used truck finance is less expensive in terms of the total loan amount, for some people, the advantages of financing a new truck may outweigh the advantages of financing an older truck. New vehicles are considered to be safer with a lower risk of mechanical or electrical failure, but older assets may be helpful in terms of freeing up cash flow for your business. Having said that, the majority of our customers are small business owners who prefer to finance older assets. Whether they are just starting out or have been in business for years, they put their trust in us to ensure that they get the best deal possible for their specific needs.
Need advice on financing old trucks or truck financing in general? Contact us on 1300 558 758 or via website live chat. You can also fill in this form and our expert will get back to you.
You’ve chosen to become a truck driver. You’ve probably got a license or are in the process of getting it. But the million-dollar question pops its head: how to finance my truck? Will I get a loan? Or will I get the money for the truck with my not-so-good credit?
Of course you can try and apply for a heavy vehicle loan and get a good deal or sweat over the probable loan amount that would be approved through online truck finance calculators, but in many cases, especially when your credit is bad, you probably won’t get any loans approved. Even if you get any, it wouldn’t be a sweet deal and you will have to bear a huge cost for it.
How to Finance a Truck with Bad Credit
Anyone can apply for truck loans and test their luck, but with our 30+ experience in the field we can confidently say that it becomes a lot harder, if not almost impossible to get a loan approved with desired interest rates, if you have poor credit. That’s where expert truck finance brokers like us at the Asset Finance Shop come into play.
We not only help you every step of the way in getting the best deals possible for you, we also know the nitty-gritty of what the lenders are looking for in your applications, increasing your chances of getting the perfect deal for you as per your situation and needs. First, let’s look at the process we follow for financing a truck:
Steps Towards Financing a Truck
1. You fill in the pre-approval form
You can fill up the pre-approval form for truck finance here which wouldn’t take more than 5 minutes of your time, or get in touch with us via the chat box or the contact us page on the website, and we will get back to you. You can also contact us on 1300 558 758 to discuss the best deal for you.
2. Our experts assess you
Our professional brokers will assess your financial capacity, i.e., your bank statements and other related documents. They will examine your cash flow and other pointers of your business’s finances to ascertain the loan terms, interest rates and all other finance options and decide the best course of action tailored for you.
3. Our truck finance brokers make a case
After examining your information and getting your go-ahead, our experts make your case and submit the needed documents for approval. We negotiate with the lender on your behalf and present your best case in front of them, ensuring you get all that you need from the deal. Sit back and relax as we bear the hassle and do all your work!
4. Your loan is approved!
Once all the formalities are done and checklists are ticked off, the lender approves the loan and you get to finance your very own truck!
Why Go with Asset Finance Shop for Truck Finance?
1. 30 years experience
We have a vast 30 years lending experience, which means we have a strong network of a lot of lenders.
2. Fast approval
We have a vast 30 years lending experience, which means we have a strong network of a lot of lenders.
3. Vast knowledge
We know all the nitty-gritties of truck finances and know exactly what you need. We chalk out a plan that increases your chance of getting a low-interest loan even with a bad credit, something which wouldn’t have been possible if you’d have gone solo.
4. Easy assessibility
You’re always free to visit our offices during the working hours, or we can even come to your doorstep to discuss or complete the paperwork.
Get in touch!
Questions? Don’t hesitate to contact us on 1300 558 758 or via the livechat. We’d be happy to help with all the doubts you have. You can check our Google reviews for the quality of service we provide!
There is a range of options when looking at truck and heavy vehicle finance, and navigating the different loan terms and conditions can be challenging for even the most financially-savvy individuals. That’s why it’s advisable to use a truck finance broker when making such a large purchase.
Want to know more about why you should use a truck finance broker? Here are three reasons why.
What does a truck finance broker do?
First off, you should understand what a finance broker does. A broker searches for finance and applies for it on your behalf. They take into account your financial situation, including your cash flow, to find the best finance option for your business. A good broker will guide you through the whole process, including after the finance has been approved.
They deal with the complicated side of financing
It’s not as simple as finding a loan, applying for it, and being approved. A finance broker understands how to navigate and negotiate with different financial institutions and lenders, which most people haven’t done before. They know what information lenders want to see in finance applications, and how to negotiate better loan conditions that are more suitable for you. You could apply for a loan yourself and be denied, but engaging a broker significantly improves your chances of being approved for that same loan.
They specialise in truck finance
Like you have mortgage (or home loan) brokers, there are brokers that specifically deal in financing for trucks and other heavy vehicles. Part of their job is to stay up-to-date on changes in the truck finance area so that they can always offer the best deal and negotiate certain terms and conditions. They’ve often got industry contacts as well, which opens up more financing options for you. They know all the specific industry tips and information, which you wouldn’t otherwise have access to.
They’re often available after hours
Unlike with a bank manager, you’re likely to have a lot more access to your finance broker. They’ll often give you both their office and mobile number, and answer your calls outside of normal business hours. This means you don’t have to wait until Monday morning if you want financing advice, which is useful when you’re looking at trucks on a Saturday.
Finding the right truck finance broker will make things simpler
When you build a long term relationship with a broker, they’ll get to know and understand your business in a much more comprehensive way. The more they know, the better they can customise finance to suit your needs at any given time. If you’re looking for advice on truck and heavy vehicle finance, get in touch with our team today. One of our expert brokers will help you and your business with any of your truck finance requirements, providing personalised advice and giving you the best chance of approval. We work with a large network of lenders, allowing us to get special deals and interest rates you won’t get elsewhere.
When you’re looking for a new truck for your business, you might not have the cash required to purchase a vehicle outright. This is understandable since trucks can cost tens, even hundreds, of thousands of dollars. Not many business owners (large or small) can afford that sort of upfront expense, which is why truck finance is a viable option for securing a new vehicle.
As with other types of business loans, the lender will have criteria and requirements to check against before they approve your application for financing. Here are the main factors that lenders will consider before financing commercial trucks.
How long you’ve been in business
While this isn’t as important to every lender as it used to be, they will all look to ensure you have an active ABN at the very least. The longer your business has been operating the better, as this will help your application appeal to more lenders.
Your credit rating and history
Your credit history affects your credit score, which in turn has a hand in the interest rates and monthly repayments you’ll be offered for your finance. Of course, a good credit score will help your approval chances, as will your credit history if it shows regular monthly payments with none missed. Bad credit doesn’t immediately disqualify you from finance, either. It just means you will have less choice of lenders and may need a larger deposit or to pay a higher interest rate.
Your business’s cash flow, finances and assets
Lenders look at your business’s cash reserves, cash flow, assets and other financials to determine whether your business is too risky to lend to. As one example, you’ll be asked to produce profit and loss statements to prove your income. There are some types of loans, however, such as low doc loans, that you can apply for if you don’t have this sort of documentation. There are financing options available for almost every situation.
The age of the truck you want financing for
Unlike when applying for a car loan, the age of the car matters in truck finance. Almost every lender will decline an application for commercial truck financing for a vehicle that is more than 5 years old. The truck is the asset used as collateral against the loan, so it needs to be worth enough of the loan’s value. The type of truck also affects the chance of obtaining finance, such as whether you’re applying for a semi-truck, a flatbed truck or another type.
If you’re an owner-operator
Owner-operators are sometimes viewed as risky to lend to because if they can’t work for any reason, it means they’re much less likely to meet their payment obligations for the loan. It’s not impossible to find a lender to approve your financing if you’re an owner-operator, but it can take time.
We know what commercial truck loan lenders are looking for
Here at Asset Finance Shop, our expert brokers specialise in truck finance. We’ll liaise with the variety of lenders in our network to find the right loan or lease solution for you, and help you prepare your commercial truck finance application for the best chance of success. The friendly broker assisting you through the financing process will discuss loan terms and other important details so that you fully understand your new truck finance agreement. Get in touch with us today for your commercial truck financing needs. We also handle equipment financing for added convenience.