Smarter Finance USA Blog

Used Truck and Trailer Financing: Rates with Good Credit

Posted by Rob Misheloff

As a husband and father, the best example I can set in the world is by helping others. That’s why I’ve built my career around helping my fellow business owners grow their companies. My hope is that this website and my company help you to grow your business and achieve your goals.

 

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So…

Time to get another truck (or trailer).

Do you want to buy new…

Or just new to you?

It depends, right?

If you’re financing, will buying used mean higher rates?

(Probably)

Check this out…

What are Rates to Finance Used Heavy Trucks?

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So… will you pay crazy rates if you buy a truck that isn’t new?

(With the wrong company you will…)

Note: if your FICO score is below 650, what we talk about financing commercial trucks with bad credit here.

It depends.

If you’re buying something old to avoid all the emissions upgrades from the last few years…

It depends how old…

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Here’s the deal:

If you…

  • Own a home
  • Have a 680 + FICO
  • Have 2+ years in business

In many cases you can get very decent rates buying trucks as old as 13 years.

If you have good credit, click here to get payments quoted...

Bear in mind, though, nobody finances a 13-year old truck for 5 years.

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We also get inquiries from people who want to finance a 15 to 25-year-old commercial vehicle.

And… yeah.

You can do that too.

Bear in mind though…

… your rates (payments) will be higher on a dollar-for-dollar basis than if you bought something newer.

(So many defaults happen because of equipment breakdowns… it’s not even funny)

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In any case… our good credit borrowers for used semi-trucks often see rates in terms of financing per year at rates of 7-11%.

(So, for a $50,000 purchase over three years, total payment might be between $60,500 and $66,500).

PS…

Notice I bolded the word might.

If you’re calling around to different boiler rooms equipment leasing companies…

…you might be hearing stuff that sounds bogus.

Let’s keep it real.

If you call us… you will operate within a scumbag-free environment.

That means instead of teeny-tiny type…

...let's make it good and clear...

....those are the good rates for good credit and good equipment.

Sometimes, people think they have a 750 FICO because of some free credit report website. 

(We even joke in the industry that when someone says 670 … that means 595).

The truth is…

…in some cases you’re not going to be offered the rates I babbled on above.

(I don’t care what Credit Karma says…)

New Big Rig Financing (With Good Credit)

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Also… what about new trucks?

So… if you’re buying new, and you have good credit…

Don’t worry about shopping the rates.

You might be offered super-good “captive” programs.

Captive means pretty much free.

Captive financing means if you’re shopping at a Freightliner dealership you might get financed directly by Freightliner.

(Private companies can’t compete with captives. If you come to us to finance a brand new truck, we're usually going to send you right back to the dealer for financing....)

Now… if it’s not a new truck…

You should totally shop. (Seriously... click here and we'll give you a quote...

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Here’s why…

Your dealer will have you fill out an application. That application will go to a finance company (like us).

Truck dealers get pestered every day by finance companies.

Service counts… but finance companies usually share a piece of the action to their dealer sources.

(We sure do…)

Here’s what that means:

If you’re handed an application by your dealer, there’s often less wiggle room for you in negotiations.

If your finance company is spiffing the dealer, but they need to get competitive to win your business…

Well, every business needs to make money, right?

That means you might get better offers to finance a used truck if you shop beyond just the application the seller hands you.

How about Rates for Good Credit on Old Trucks?

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Not that bad.

If you’ve got decent credit and you aren’t broke…

There are decent programs available.

You’ll have to pay for the risk.

That’s called life.

But... if your history is of paying your bills… there’s not that much more risk.

Where you can get good rates financing trucks up to 13 years old…

The rates are a little higher… but not horrible.

Let’s do some apples-to-apples.

Imagine getting offered 5-year financing on a 2015 truck that cost $100,000. Also, let’s assume you’ve got a credit score above 680.

Your likely payments might be between $2,400 and $2,750 monthly.

Now, pretend you are buying a 1999 truck for $50,000.

One half of payments above: $1,200 to $1,375.

But… wait.

That 1999 truck is riskier than the 2015 truck for a lender.

Way riskier.

That means the payments will be a little bit higher.

Figure that same transaction on the older truck… $1,400 to $1,600.

Rates for New Owner Operators with Good Credit

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The payments we talked about above are for an existing business.

If you’re new, or have less than two years in business…

Assuming again, good credit…

If you’ve had your CDL for at least 3 years you can often get decent rates.

A $50,000 truck might have payments between $1,200 and $1,450 a month over 5 years. You should plan to be able to make the first and last payment in advance, or sometimes 10% down.

Now, if you’re fresh out of truck school, that’s a different story.

In that case… plan on a substantial down payment, 25-50%.

(Or... plan on getting some experience before you go driving your own truck…)

Also, since financing a truck to someone with little or no experience is enormously risky… even if you have good credit you should plan on not being thrilled with the rates.

Financing for $50,000 over 5 years to a newbie could run anywhere from $1,650 to $2,750 per month.

Conclusion

If you are buying a used truck, and your credit is good, there are decent options available to you.

Usually, if you’re buying a brand-new truck, your best bet will be dealer financing.

To talk about financing a truck for your business, give us a call at (866) 631-9996 or click in the picture below. 

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Topics: Leasing

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