truck loans and financing get a good truck loan, interest rate and financing package
Truck Loans
Truck loans and financing can be the trickiest part of purchasing a truck, especially if you are buying a used truck or commercial long haul machine. Financing is typically where many dealerships make extra profits at your expense, often through special add-ons, higher rates, or special dealer fees, they pass on to you at inflated costs. Many of the larger truck dealers offer good truck financing in-house and should at least be compared and considered. They often have such a large volume of applications that are specially targeted to trucks, that they can compete with typical banks and credit unions.
Follow this process - and you will come out ahead. First, settle on a truck that you want without discussing financing, settle on a price, agree to a trade in value (if you have one), then tell the salesman you are willing to discuss any financing options they have but do NOT tell them or show them the terms you have already gotten approval for from your bank or other truck loan financing source. The ads on this page are from highly reputable truck financing institutions that may be of value to you in at least getting a free quote. Spend a little time now seeing what they offer BEFORE you visit the truck lot and get a truck loan.
Truck loan interest rate - Your interest rate will vary because
it depends on many factors, which include your loan total, expected down
payment, credit profile and the value of your truck. Most companies will
want to process your truck loan application BEFORE discussing terms. This
is normal and since most companies can complete your application in less
than an hour, it shouldn't be an issue.
Down payment - Many truck loans require a 25% down payment. People
with great credit however often qualify for special programs that have
no minimum down requirements. Your credit score will determine this.
Minimum truck loan amount - I rarely see tractor trailer loans
processed in amounts less than $26,000. The value of the truck is just
not worth the risk to the bank if they have to repossess it. It costs
the bank the same amount to repo your 10 year old $26,000 Mack as it does
to repo a brand new $100,000 Sterling. With the Sterling they have something
that is easy to sell. With the Mack, they do not.
Loan term length - most companies will not loan on an truck for
less than 3 years. Most larger companies will loan for as long as 6 years
since they often see the bigger trucks as investments in a business.
Truck loan application fee - many companies charge to find out
if they can loan you money. Do not pay it! INSIST on a free application
approval process. If they are not willing to take this small risk on you
then they are less likely to be perfect to work with. Don't waste your
time.
Truck makes that can be financed - Many banks only want to loan on
large, expensive trucks. If you are buying an old day cab white or stretch
Peterbilt show truck or some other oddball coach, or conversion, ask up
front, before you get into the lengthy application, if they loan on that
kind of vehicle. If they just stare at you when you say "big rig",
or if filling out an online application there is not a "drop down"
box that contains the word "Freightliner" for example, for vehicle
make, then move on. Interested in a coach
or bus loan, get help from Bus For Sale Guide.
Financing older trucks - It can be quite difficult without perfect
credit to finance an older truck. Some companies will go back 6 years
on a real solid truck with a serious legitimate survey or appraisal on
it. Other companies will not touch anything older than 4 years regardless
of value or credit score. The point is ask FIRST if they loan on your
year truck so you don't waste time filling out an application for an truck
loan that will lead nowhere.
Credit score - the better companies that will finance you on an
truck loan without up front application fees or credit check fees, who
have good interest rates, and can get it done in an hour or two, will
require a credit score of 600 - 640 and sometimes higher. If you don't
have a credit score in that range you will need to be more flexible in
your approach and in the interest rates you will be willing to accept.
Getting an truck loan AFTER you bought the truck - Some banks have
a cash recapture program that allows you to buy a truck using your cash,
like when you stumble on a great incredible deal or distress sale and
need to by it that day, then they give you the loan later and take possession
of your title until payoff. This can typically be done up to 4-6 months
after the truck purchase.
Truck loan calculation - Make sure the loan you get is a simple interest loan. This way you only pay interest on the principal you owe, and that amount gets reduced every payment you make on the truck loan and financing.
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