How do you choose the finest truck financing company out of the many options available? Since we started helping owner-operators, All Business Trucks has heard all the horror stories about shady lending businesses that arise out of nowhere and go just as fast as they appear.
Business owners that need to purchase or repair semi-trucks to make deliveries, move materials, or haul goods can benefit from commercial vehicle financing. If you can’t afford the purchase entirely, you can apply for a commercial truck loan, regardless of whether you only need one truck or want to start your own small fleet of vehicles.
Here are a few things you should watch out for as an informed customer while looking for a truck loan.
Unreported Fair Market Value Buyouts
You diligently make all of your lease payments only to be confronted with a buyout that requires negotiation. That is correct! You lose your truck if you are unable to pay the fair market value buyout, which is determined by them rather than you. You pay off your entire truck loan balance with All Business Trucks, and you receive your title. That’s all! Both games and surprises are absent.
The majority of leasing plans let you buy the truck for the balance of its worth after depreciation after the lease expires. In contrast, a loan grants you complete ownership of the truck at the end of the repayment period. Leases include interest rates built into the payments, which could raise the entire cost even if they have cheaper monthly payments than loans.
Double Sales Tax
With a lease, sales tax is typically added to your monthly payment on the purchase price and payments in specific circumstances. The real kicker is that you will have to pay sales tax once more once you have completed your lease and transferred ownership of the truck from the leasing company to yours. You simply have to pay sales tax on the purchase price with All Business Trucks because the title is in your name from the beginning.
When your lease is up and you decide to buy the truck, be aware that sales tax will be added to both the truck’s purchase price and your monthly payments.
Cash Up Front
Beware of financial businesses asking you to send them money before approval, whether they refer to it as application fees, commitment fees, or something else. Numerous tales of dishonest brokers stealing your money, lying about approvals, and disappearing without a trace abound. Investigate online, and always request truck dealers for client references.
Security Deposits and Advance Payments
Unscrupulous truck leasing and lending organizations frequently employ this tactic! They take advantage of you here. They keep your money, utilize it, and you are unable to use it as a down payment to lower your borrowing costs. As a result, you borrow more money, they earn more money, and you pay thousands more! At All Business Trucks, all of your money goes toward the deposit, reducing the amount you borrow so that you save thousands.
Add-on Interest vs True Simple Interest
This is an old tactic from the 1950s employed by the used automobile industry to deceive customers into believing they are paying less. In fact, most states have made it illegal. Using a basic interest calculator, a 10% add-on rate may be over 25%. Don’t be deceived! Verify your rate.
If you’re thinking about using an online lender, pick one that specializes in financing commercial trucks and has been around for a while.
Setting Up Commercial Credit
Many lending and leasing companies will assert that they will send credit bureau reports. The majority don’t unless you stop making payments and let the loan go into default. If you’re attempting to create commercial credit, that is not helpful. At All Business Trucks, we assist you in establishing commercial credit and report your performance to consumer and commercial agencies.
“Truck Experts” who Lack Knowledge
We all claim to be experts on trucks, but are we? We pose inquiries! Is this a dump truck that was formerly a tractor? Is this engine problematic for an owner-operator without a background in diesel mechanics? In order for you to be able to trade in and upgrade your truck or rebuild your engine when the time comes, we take great effort to match the loan term to the estimated life of the truck. Others seek to lock you into a lengthy agreement that will probably last longer than the lifespan of your truck. All Business Trucks are interested in your success.
Bucket Truck Financing
A bucket is attached to the long, mechanically multi-jointed “arm” of a bucket truck. They occasionally use a powerful winch to lift and position heavy objects like building supplies or large signs. Any precision work that requires working at heights or in confined spaces requires a bucket truck without a doubt. This need is recognized by All Business Trucks, which offers business vehicle leasing (including financing for bucket trucks) to help you quickly acquire a vehicle.
With low credit, you might not be eligible for commercial truck financing because credit plays a significant role. Red flags like tax liens or unpaid child support would affect your chances of approval. If you lack the funds for the down payment, you will also have trouble qualifying.
A lender could refuse to approve your request for funding if you lack experience. It may be necessary for you to provide evidence of your familiarity with or expertise in the trucking industry.