Tips for Financing a Commercial Truck

Many businesses rely on having reliable access to their own commercial trucks, but it’s a hefty investment to own one, let alone a whole fleet. Most fleet managers and business owners will choose to finance their purchase, which gives them access to the tools they need to operate without paying for the truck outright. If you’re considering the addition of a commercial truck, continue reading to learn more about your financing options.

Why Would You Need a Commercial Truck?

First off, it’s important to understand what a commercial truck is and if you need one. By definition, a commercial truck is any truck used for commercial use! There are different classifications, typically dependent on weight and style that can influence your loan type. 

You may need a commercial truck to expand your business by having more direct access to goods or by providing new services to your customers. Delivery is not the only benefit of having your own truck! The needs will be unique to your operation and it will ultimately be your decision if it makes sense to add one to your fleet.

Getting a loan for the purchase of a commercial truck can seem complicated because of the risk factors and ties to business, but there are many lenders who solely specialize in truck financing. 

Loan Types, Rates, and Terms

Commercial truck loans are a form of financing when you need to purchase specific equipment. The equipment, in this case, a truck, will serve as collateral for the loan, making the terms directly related to the cost and life of your purchase. Since the truck itself will be collateral, it can be repossessed in case of defaulted payments. 

Along with your loan, lenders will charge an annual interest rate for the money borrowed. This can range between 5% and 30%, depending on the total amount borrowed, total income, total credit, and the truck’s condition. The rates are usually fixed, meaning you can expect to pay the same annual rate throughout the life of the loan. 

You can work with a specialized truck financing company to have the most catered borrowing experience. Whether you’re a large or small operation, these lenders will have the best understanding of what goes into owning a commercial vehicle.

Determining Total Cost

As you learn about the loan option and rates available to you, it’s imperative to calculate the total cost of the commercial truck. You should consider the total cost of interest, registration fees, licensing, and truck appraisal. It may be useful to calculate the annual cost of maintenance and fuel before committing to the loan. 

Always pay close attention to the loan terms and requirements before signing any paperwork. 

Financing a commercial truck can be the most financially rewarding option for your business. Our team at GATR Truck Center, located throughout Iowa and Minnesota, would love to help you with the process. Visit us in Elk River or Sauk Rapids, MN, or in Cedar Rapids, Des Moines, or Waterloo, IA, today!