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Trucks and Trailers: financing as an Owner Operator

Financing your Car Hauler Dreams

If you just decided to make the jump into your own operating authority, you know money is a primary hurdle. Specifically, finding out where to get it.

You might’ve scrounged up the money for a CDL, training and testing. Now you can take the extra thousands you have laying around to buy yourself a shiny new truck to start hauling with, right?

Of course not! Here in America straight cash will get you anywhere you want – but 20 or 30,000 is a lot to cough up all at once. That’s why we have financing options. So how does a car hauler get the best deal possible, without being swindled?

What you need to finance a truck and trailer

 You will need to have a minimum 2 years of experience driving.

You will need to have a minimum 2 years of experience driving. That means they will pull your CDL and check your haul references to verify that experience

In addition to having a long driving record, you will need to put down at least 20% upfront and maintain a good credit score.

Some truck leasors will do deals with drivers who have credit below 600, but the lessor will end up paying thousands more and have to move through a secondary market.

While credit score is the primary factor in financing your truck, companies will watch out for other signs of bad credit. If an owner operator has 2 bankruptcies, 3 repossessions and can only put 5% down, they likely will not be financed.

Some factors – such as repossession – weigh heavier against your chances of getting a loan than a lower down payment.

How do I know if it’s a good deal?

There is no such thing as a bumper to bumper warranty in commercial trucking.

Unlike Consumer equipment, there are few financial protections in place for Commercial equipment once a contract has been signed. But there are signs Commercial Operators can be aware of before committing.finance truck trailer car hauler

There is no such thing as a bumper to bumper warranty in commercial trucking.

Just read your contract, because the contract is going to specify exactly what is covered. People will compare it to a new car.

The only conversation that is said about the warranty is when the customer asks about a warranty and a sales person will say ‘yes, this has a brand new warranty.’ That might lead a customer to think they mean bumper to bumper coverage, but they didn’t say that. There is no such thing as bumper to bumper coverage in semi truck land.

A Consumer Protection lawyer in Kansas City, Bryce Bell, has a few suggestions on auto loans that are applicable to commercial financing.

“Bait and switch financing agreements are a big one,” Bryce says. Bait and switch is a tactic where a salesperson “pre-approves” the percent of a lease agreement (say, 10%) on the spot, pending some official approval from the bank. This makes the consumer feel like they already have a great deal on a new car. Then a week later, the sales team calls back saying the bank didn’t approve it at 10%, but the dealership found another place that could approve it on the spot for 20%. Now the customer is more likely to accept this bad offer, because for a week they were sure it was as good as bought.

Beware of red flags before you sign the contract.

Be sure to read the fine print of everything 5 times before you sign anything. Any contract comes down to – if you signed it, you own it.

How to keep a truck and trailer

Finally, once you have the truck, how do you make sure you keep up on those payments? Trucks aren’t going to run themselves (yet.)

Many Super Dispatch customers say the most common problem a trucker faces is unexpected maintenance costs.

Many experienced drivers think that new trucks are made worse, due to new government regulations and emissions standards. According to some SD customers, a truck can be running fine, but the check engine turns on.

If you’re an Owner Operator, try saving 5% of every load or a portion of your monthly income for future maintenance costs.

How have you financed your truck? What was your experience? Let us know below!