Take Charge of Your Career and Learn How to Finance a Truck
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Did you know that there are approximately 2 million semi trucks on the roads of the United States? Choosing to finance a truck, new or used, is a great investment and opens a ton of new ways for you to make a good living. It might seem overwhelming to learn how to finance a truck, but there is plenty of help to get you started.
You might wonder how many years can you finance, and what the best way to finance is. The good news is that you’ve come to the right place to get all of the information you need in order to get the truck financing you want.
Continue reading to learn more about how to finance a semi truck and start making money as a semi truck driver.
Determine Your Eligibility to Finance a Truck
It is important to remember when you decide to finance a truck that each and every lender has different requirements that you’ll need to meet in order to get truck financing. A good idea is to confirm the requirements of a lender before moving further with the process of getting financing.
There are some general guidelines for eligibility that you should check out to make sure that you qualify. A good rule of thumb is that you’ll need a credit score above 600 to be eligible. Scores under 600 will still be considered but it is less likely they’ll be approved.
You’ll also need to put at least five percent of the cost of the semi truck down on the investment in order to get financing. If you’re well qualified, some lenders will allow you to put zero percent down when purchasing a truck.
Another thing to be aware of is that some lenders will want to know how long you’ve had your commercial driver’s license. If you’ve had it for a short period of time then it is possible they’ll decide that you’re not eligible at that time.
Two other important factors to consider are the age of the truck and the mileage it has on it. Lenders want a truck less than 10 years old and with less than 700,00 miles. Click here for a definitive guide from Your FundingTree.
Gather the Right Documents
There are also certain documents that you’ll need if you’re going to finance a truck. Having these documents ready to go will help to speed up the process of getting financing.
You’ll need documents proving that you have a registered business as well as documents showing your current and past bank statements. You’ll also need to provide your past three years of business tax returns and the current profit and loss statement of your business.
If you have business licenses and certificates then the lending company will also want to see those documents, as well as your CDL. Other documents that the lender might want are your USDOT number and your motor carrier number.
Find the Right Truck
It is important to both you and the lender that you find the right truck to finance. It needs to meet certain requirements in order to get the financing you want. Lenders have money on the line and they want to get rid of as much risk to their money as possible. Because of this, they’ll want you to find a truck that meets their guidelines.
To help guarantee that you get the lending you want, look for trucks that are less than ten years old and that have less than 700,000 miles on them. It is also ideal if to try to find a semi truck being sold by a dealer rather than a private seller. You also need to keep in mind that lenders won’t offer financing for more than the truck is worth.
This means that you’ll need to provide at least five percent of the value of the truck with the down payment in order to get the financing you need for the truck. It is wise to get an estimated value of a truck so you’ll know ahead of time approximately how much money you’ll put down.
There is also other information that you’ll need in order to put down a loan and finance a truck. The lender will want information like the make, model, and year of the truck you’re purchasing. They’ll also want to know the mileage, condition report, and serial number. It is also possible that they’ll want pictures of the truck to confirm the condition.
Find the Right Insurance
No matter what type of vehicle you’re investing in, you’re going to need insurance in order to secure financing. Semi trucks are no different when it comes to this, so it’s important to find the right insurance. A lender will want to see that you’ve got proper insurance before they’ll agree to finance your semi truck purchase.
It is a good move to consult with an insurance professional in order to determine the best insurance for your business as well as your new truck. You’ll need primary liability coverage as well as physical damage coverage for your truck. You’ll also need bobtail coverage and cargo coverage to cover whatever it is that you’re hauling with the truck.
Like with any other type of vehicle, your insurance costs will change depending on your driving record as well as prior claims that are on your business’s record. The other determining factors are the value of the truck and the value of the cargo.
Find the Right Lender
Once you’ve successfully completed all of those tasks, you’ll want to make sure that you find the right lender. Reach out to multiple lenders to get quotes on their interest rates and how much money they’re willing to provide for financing. Some will be better suited to meet your needs, so do your due diligence when finding the right lender.
Now You’re Ready to Finance a Truck
Knowing how to finance a truck is a valuable skill to have if you’re running a business that requires the moving of large amounts of cargo. It is also a great way to make a living. Knowing how to finance a truck will make the process of buying either your first truck or your next truck much easier.
Be sure to do your research to know if you’re eligible and find a truck that meets the requirements of the lender. You should also get all of your documents together to expedite the process of getting approved for financing.
For more helpful articles on a range of topics, be sure to check out more of our blog posts today.