A Guide to Financing Your Commercial Truck
Commercial trucks are expensive vehicles, and buying one will necessitate spending a hefty amount right off the bat. That’s why many small business owners opt to get their rig financed to save on the upfront cost. If you’re thinking about purchasing a new commercial truck for your operations, here’s why you should consider using a financing option to fund your purchase.
In this guide, our experts at Fyda Freightliner have highlighted the essential aspects of commercial truck financing. Read on to learn more, and if you have any questions, connect with our knowledgeable staff at one of our dealerships. We are in multiple locations throughout Kentucky, Ohio, and Pennsylvania.
The Basics
Financing options are a fantastic way to get your commercial truck funded by a reliable lender. Though banks offer loans for purchasing personal vehicles, they often don’t lend to truck operators because they consider this a risky and expensive investment.
Thankfully, many lenders, such as Fyda Freightliner, offer truck financing assistance for you to check out. We can explain our different financing options and help you select one that meets your budget and requirements. Let our team know whether you want to purchase a commercial truck or lease one, and we will suggest options that match your needs.
Types of Loans
Typically, a commercial loan requires that you use your vehicle as collateral, meaning if you default on your loan, the lender can repossess your truck to recover some or all of their losses. Also, the terms of repayment and the loan amount itself will depend on the total cost of your model and the expected lifespan.
Depending on your credit score, the financial state of your business, and the type and condition of your given model, your lender might charge an annual interest rate ranging between 5% and 30%. These are fixed interest rates, meaning you’ll have to pay a predetermined monthly amount throughout your loan’s tenure.
The Total Cost
To figure out the total cost of your commercial truck, crunch a few numbers to determine the interest that will build up over time. Make sure you check your loan terms carefully to understand your obligations before you make your final decision.
When calculating the fair price of your given model, don’t forget to consider other factors, such as the application fee, credit check charges, and appraisal fee. Also, ask your lender about the annual percentage rate of the loan. This will help you find the actual cost of the truck.
Evaluate Your Options
There are various options that you can try out when getting your commercial truck financed. While many large national banks offer loans to small business owners, they’ll need you to have a solid credit rating and make a down payment. However, they offer the longest terms and the lowest interest rates on the market.
On the other hand, there are specialized truck financing companies, including online lenders, which help you get your funds quickly and in a hassle-free manner. However, they charge higher rates than banks and offer you shorter repayment terms, usually less than seven years. So, evaluate your options wisely and then make your choice.
We hope this guide helps you find the perfect financing option for your commercial truck. If you need more information, visit Fyda Freightliner, where our finance experts can address your concerns. We’re in multiple locations throughout Kentucky, Ohio, and Pennsylvania, so stop in today!