Whether it is the first or twelfth time, deciding to purchase a semi-truck is a big decision for any owner operator. There are things you’ll want to make sure you learn about the truck itself, the previous owner, and information you’ll need to gather to apply for a loan.
Find out some important things to consider when searching for your next commercial vehicle.
Consider the Costs
When considering what type of semi-truck to purchase, wise owner operators will analyze the Total Cost of Ownership (TCO). This calculation will include the cost of the truck throughout the entire time you plan on owning it, which includes considering the price of purchase, maintenance, warranty, fuel, insurance, downtime, as well as resale value. Taking the time to analyze TCO will give you a better understanding of how much a certain truck will cost in the long run, and it will also allow you to compare different trucks more critically. For example, one truck may cost less upfront but that does not mean it will be cheaper in the long run.
Apart from TCO, there are other “soft” costs to consider when choosing your truck. It is important to consider safety, connectivity, comfort, and other features of the truck that are harder to calculate into a dollar value.
Be Sure to Ask Questions
When buying a used truck, if it often difficult to remember all of the right questions to ask the previous owner. By not asking all questions prior to purchase, you run the risk of the truck experiencing unexpected problems later on. To ensure that the truck is in proper shape, it is important to ask for the following information:
- How often did the previous owner change the oil?
- Are copies of the truck’s maintenance records available?
- Who did the truck’s maintenance?
- What is the condition of the tires’ tread depth?
- What is the engine’s history and have there ever been any issues?
- What is the state of the drivetrain, rear-ends, wiring, suspension, and transmission?
- Have samples of the oil from the engine and transmission been analyzed?
Make Sure You Qualify for a Loan
Purchasing a commercial vehicle is not something to do on a whim. It is important to be sure you know where you stand financially and have the necessary documents in order before you try to apply for a commercial vehicle loan. Here are four questions to ask yourself when considering applying for a loan:
Do you have at least three years of verifiable driving experience?
Commercial lending companies often require drivers to have at least 2-3 years of CDL (Commercial Driver’s License) experience before acquiring a loan. Loans often come with lower contract rates for drivers with more experience.
Have you set aside funds for your down payment?
Most loans will require a down payment of at least 20 percent. However, this can also vary due to credit score, credit history, or other variables.
Do you have a co-signer?
Not everyone needs a co-signer or co-applicant to acquire financing for their next truck. However, those with negative marks on their credit will have an easier time getting approved if they sign with someone with good credit who also has a Commercial Driver’s License.
Have I gathered the other necessary stipulations for truck financing?
Every financing company will have a list of required stipulations you must provide to get approved for a loan. These typically include references, bank statements, and proof of insurance. Once you have found the truck you wish to purchase, you will also be required to provide a written quote, which typically includes the price, photos, title and vehicle registration, and other truck-specific stipulations.
Choose the Right Semi-Truck
If you can answer “yes” to these four questions, you are well on your way to obtaining your perfect truck. Purchasing a new or used semi-truck is an exciting time that can even help advance your trucking career. However, without proper attention to detail, you run the risk of not acquiring the necessary financing in time and missing out on the truck you really wanted. By taking these things into consideration and using them for future purchases, you will easily be able to find quality vehicles for years to come.
Greenhouse gas and carbon emissions are becoming more and more of an issue across the country. Fuel emissions from vehicles account for a large percentage of air pollution that occurs in the U.S. In fact, in California, 37 percent of greenhouse gas and criteria emissions come from commercial trucks and buses. Additionally, a fifth of all emissions in the state come from diesel fuel.
Across the country, the federal, state and local governments are creating initiatives to promote cleaner air for everyone and the planet. These projects involve everything from setting higher standards for technology, to providing incentives and grants to drivers.
California Initiatives to Reduce Emissions
California is leading the way in creating clean-air initiatives that work to minimize the pollution released into the air from cars, commercial vehicles, and other sources. The California Air Resources Board (CARB) is California’s primary agency committed to protecting public health from the negative effects of air pollution. This organization works throughout 35 local air pollution control districts. It also leads the state in addressing worldwide climate change issues.
In 2012, CARB released the landmark Truck and Bus Regulation, which called for commercial trucks, including semi-trucks and buses, to be upgraded and replaced over time with less-polluting trucks throughout the state. This is because these high-polluting trucks are responsible for 90 percent of diesel pollution and 80 percent of smog-forming pollution. CARB hopes that in 2023, California’s trucks and busses will be 90 percent cleaner than in the year 2000.
Getting enough low-emission commercial trucks becomes a challenge due to the high cost of these new trucks. Since many are still in testing phases and supply is low, the cost of these vehicles is out of reach for many freight owners. To help with the cost of upgrading to a cleaner truck and reach their goal of getting as many low-emission commercial trucks on the road as possible, The California Air Resources Board has launched the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP). This program allows truckers and fleet owners in California to invest in low-carbon electric trucks faster than would be possible otherwise.
What is the HVIP Project?
HVIP is a unique program that hopes to replace traditional trucks and buses with low-carbon hybrid and electric commercial vehicles quickly by offering vouchers to qualifying freight owners. Because the largest barrier most freight owners face when it comes to supplying their drivers with updated, low-emission vehicles is the high price of these trucks, this program could greatly benefit them. With the help of a grant, owner operators can start making less of an environmental impact sooner rather than later.
As of 2019, HVIP has been able to replace more than 3,500 medium- to heavy-duty commercial vehicles. This has led to a 30 percent growth in the nation’s early market of zero-emission and hybrid vehicles. It has also helped create jobs, increase the demand for these technologies, and advance the zero-emission truck industry.
Clean Air Action Plan Technology Advancement Program
Another initiative aimed at progressing technology faster in hopes of sustaining the environment is the San Pedro Bay Ports Clean Air Action Plan Technology Advancement Program (TAP). This initiative, based out of Long Beach and Los Angeles, is committed to encouraging the development of emission-reducing technology and getting that technology to the port market as fast as possible. They work closely with developers and port industry partners to help test, commercialize, and promote the widespread adoption of technology that will help keep the air clean at ports around the world.
Early Adopter Truck Incentive Program
The Port of Long Beach as well as the Port of Los Angeles are expanding their initiative to help get truckers behind the wheel of less-polluting rigs by giving dozens of truckers up to $100,000 each to upgrade their trucks. Known as the Early Adopter Truck Incentive Program, this concept has earmarked $14 million to help pay for new, lower emission, natural gas-powered trucks. To receive funding through this program, truckers would have to be members of the ports’ truck registry, and they would have to agree to scrap their existing truck.
Promoting a Healthier Planet
The future of trucking looks bright thanks to advancements in AI technology, the rise of electric trucks, and environmental initiatives that help to improve these commercial vehicles as well as the planet. Because of HVIP, TAP and similar programs, we can expect more fuel-efficient, responsible trucks on the road, which means owner operators and other drivers are safer than ever before. And since these new trucks are producing fewer emissions, citizens of California are able to breathe easier and create a better world for future generations. Hopefully, the combination of government initiatives and advancements in technology will be enough to preserve the planet.
From contracts to complex legal documents, the process of buying a commercial vehicle can quickly become intimidating for any customer. Luckily, there are dealership financing options created to meet the unique needs of the trucking industry and make the process of getting a loan as seamless as possible. By offering simple interest contracts, acquiring financing and paying it back can be easy and uncomplicated for owner operators and dealers. Here is how simple interest contracts can make dealership lending mutually beneficial for dealers and their customers.
What is a Simple Interest Contract?
With a simple interest contract for commercial lending, customers have the chance to accrue little interest by paying their loan back in a quick an easy manner. Simple interest contacts calculate interest daily, based on what is still owed on the loan.
When a customer makes a payment on the loan, their money first goes to the interest that has accrued that month. The rest of the payment then goes toward paying the principle of the loan. If the customer is able to pay off the interest each month without fail, that interest will not accrue for the next month. On the other hand, if the interest is not paid by the end of each month, more interest will accrue on top of the interest from last month, which is known as compound interest. This means if payments are not made on time, the customer runs the risk of building up compound interest. This compound interest could mean the final payment of the loan is far higher than what was projected when the contract was first signed. However, it also means that if payments are made on time or earlier, the final payment could be even less that what was originally projected.
The Difference Between Simple Interest and Precomputed Contracts
Since interest is calculated daily, and simple interest contracts give customers the opportunity to only pay interest on the current balance of their loan. This means interest amounts will get smaller as your loan is paid down.
However, with the precomputed interest method, the only number used to calculate interest is the amount of the loan at the time the contract was signed. This means there is no way to change the amount of interest you will need to pay. Even if you choose to pay down your loan faster than scheduled, you will not be able to reduce the interest amount like you would with a simple interest loan.
The total payment can vary greatly between a precomputed loan and a simple interest loan if you choose to make early or late payments. However, if you make all payments exactly on time, there is little difference between the two contract types.
Products Included in Simple Interest Contracts
Simple interest contracts vary, but Mission Financial provides more than just financial independence. Our contracts come with a variety of perks to keep you and your investment safe on the road. These products can be bundled into any contract to help you drive with confidence.
Mission Auto Protection
Every simple interest contract through Mission Financial comes with Mission Auto Protection (M.A.P.) A membership to M.A.P. offers truckers a variety of services to keep you safe and secure on the road. M.A.P. features include:
If you experience a breakdown, M.A.P. will reimburse you for up to $200 of on-site labor. This can include repairs as well as the delivery of fuel, fluids, or parts. Roadside assistance does not cover the cost of parts or expenses from labor at a facility.
M.A.P. will cover towing expenses from the site of a breakdown up to $200. The service covers only one tow per breakdown.
If a breakdown occurs when you are further than 500 miles from home, M.A.P. will reimburse up to $300 for room and board while you wait for truck repairs.
In the event that you get locked out of your truck, M.A.P. will reimburse up to $50 in expenses for unlocking the vehicle’s door.
M.A.P. will reimburse drivers up to $50 dollars for tire repair services.
If a battery boost is needed, M.A.P. will reimburse drivers up to $50 in expenses.
TrüNorth™ Heavy Duty Coverage
Mission Financial has also partnered with TrüNorth™ to offer its customers coverage on their vehicles for 12 months or until the vehicle reaches 100,000 miles.
Benefits of Financing with Mission Financial
As a commercial driver, it is imperative to have reliable protection and coverage plans in the event of a break down, blown tire, or other incident on the road. With M.A.P. and TruNorth, truckers can drive with confidence knowing that a backup plan is already in place no matter what happens.
Mission Financial is a commercial lender people can trust. Not only does Mission Financial offer peace of mind through financial independence, but by ensuring that help is on the way when the unexpected happens.
Choosing a trucking school is the first big step to starting your career as a commercial driver. You want to make sure you pick a school that will prepare you and deliver the proper training for life on the road. This includes proper accreditation, experienced teachers and plenty of practice time behind the wheel. Previously, the only place to get semi-truck driving training was at a trucking school.
However, now it is easier than ever to find proper training thanks to community colleges across the country who are beginning to provide trucking classes at their facilities. Here is what you need to know about how community colleges are changing the way future truckers are being educated.
Community Colleges Offer CDL Classes
Previously, depending on location, students would have to travel to other cities to receive a commercial driver’s license. And because CDL courses typically last four to six weeks, it can add excessive extra cost on top of tuition expenses. Students often have to find lodging and spend extra money for food and necessities while away from home. Now, truckers-in-training can take courses in their area at their local community college. This gives more people access to training at an affordable cost without having to leave their families and homes behind.
Many of these community college programs offer added bonuses to make learning this industry even more attractive to young men and women. Some schools, like North Idaho College, have teamed up with driving schools to offer students a unique experience. In the case of North Idaho College, the partnership is with Spokane driving school Drive509. Because the partnership crosses state lines, students at the community college have the chance to qualify for CLD in both Washington and Idaho. This empowers students to broaden their search during their initial job hunt. As of March 2019, over 300 students have graduated from the four-week course, and many have gone on to earn starting salaries of over $40,000 per year.
Pros of Community College CDL Training Programs
While the addition of commercial trucking programs to community colleges will open doors for new young truckers, there are some pros and cons to consider before choosing which school is right for you. Community college programs are a great way to give more students access to quality training. However, not all courses are created exactly the same.
CDL courses at a community college are often less expensive than traditional trucking schools. And because they are not sponsored by a certain company, students are able to work for any trucking company they choose after graduation. Community college classes also often have more flexible hours. You may be able to choose to make morning, afternoon, or evening classes to work around your existing schedule, and weekend classes are usually offered. Community colleges can also offer truckers some of the same financial aid opportunities they can extend to students with a regular two-year curriculum. This can help you manage expenses and get on the road quicker.
Cons of Community College Commercial Trucking Programs
The flexible schedules of community college training courses may be convenient, but it also means taking longer to graduate than at a traditional trucking school. For instance, if you choose weekend-only classes, it could take many more months to complete the number of necessary classroom and driving hours to qualify for your CDL. While many CDL training schools can guarantee students jobs after graduation, many community colleges cannot make the same promise. However, many community colleges are able to offer job placement assistance, which can help in your search. The final con of community college is that the classes may not be offered all year-round. You may have to wait until the beginning of spring or fall semester to take the needed classes.
Future of the Freight Industry
The future looks bright for the commercial trucking industry. Thanks to more and more community colleges opening their doors to future drivers, it is now easier than ever to get quality training and launch your career. This new variety of schooling choices also allows future truckers to have more options than ever and find a school that is perfect for them. We look forward to seeing how education continues to change the transportation and freight industry. After you complete your CDL training, Mission Financial is here to help with all of your commercial lending needs.
Excitement is building in the commercial trucking industry as people wait for the leader in platooning, Peloton, to announce the release date for its two-truck platooning system, PlatoonPro. In hopes of temporarily satisfying truck enthusiasts, the company released a list of the safety measures they have put in place to make sure their platooning technology will increase safety for truckers and other cars on the road. Here are some of the ways Peloton is ensuring their tech will make driving safer once it is released.
What is Platooning?
Platooning is a new way we are seeing artificial intelligence working in the trucking industry. This technology is a legal, digital way for a fleet of trucks to communicate with one another using a wireless internet connection. When the front truck brakes, the truck behind can automatically brake or slow down to avoid a collision. Reaction time is improved, allowing trucks to follow more closely behind each other compared to manual driving or cruise control.
Platooning is spreading rapidly thanks to the technology being adapted by numerous truck manufacturers. Companies now working to equip their trucks with platooning technology include Tesla, Volvo, Daimler Truck North America, and many more.
Expanding Upon Proven Technology
In their article, Peloton states that its goal is to make platooning safer for truckers than ever before. That means the moment they hit the button to activate the platooning feature of their truck, their risk of collision or accident should decrease dramatically.
From safety systems to air disc brakes, Peloton’s goal is to not disable any preexisting technology when platooning is enabled. Instead, they are building upon these proven safety systems to make platooning even safer. They also plan to hold their trucks to a high standard with strict maintenance and inspection requirements that will ensure all trucks are in working order before hitting the platoon button.
How New Platooning is Increasing Safety
Apart from proven technology already found in commercial vehicles, the new platooning system will also add features not commonly seen behind the wheel of a semi. Features of Peloton’s new system will include:
One of the biggest aspects will be the new vehicle-to-vehicle direct communication. This technology will be possible due to industry-standard digital short-range communications (DSRC.) This will allow two trucks to accelerate, slow down, and brake together. With this technology, truckers will be able to follow closer than ever before without having to worry about reaction delay. This will decrease fuel consumption, allow for more space on the highway, and make driving easier and safer.
- Platoon ProXimity Dissolve
Platoon ProXimity Dissolve will use camera sensor data and radars to gage traffic conditions in front of the leading truck during a platoon. In case traffic becomes too dense, or if a car cuts in front of the lead truck, the following truck automatically slows down to create more space. This allows all drivers to avoid any situations that may require hard and sudden braking during a platoon.
Platoon Dissolve allows the following driver to manually dissolve the platoon. With the follow-truck system, the driver can slowly increase the gap between the two trucks until there is enough space to safely start controlling the brake and accelerator pedals.
- Display Awareness Video and Info Display
To help the following trucker have a better understanding of what is going on ahead, PlatoonPro features an Info Display in the dash. This display will provide a live video feed from a forward-facing camera in the lead truck, so following drivers will be able to see changing road conditions, upcoming traffic, ramps or bridges, and any other objects up ahead.
To help promote efficient communication and teamwork between drivers, the new platooning system is equipped with a hands-free driver-to-driver radio that can be activated with a foot pedal. This will help with synchronizing lane changes, upcoming road changes and when to dissolve a platoon.
Because platooning systems could potentially be hacked or tampered with from outside sources, it is important that these systems have top-notch cybersecurity to keep truckers and surrounding drivers safe. This system has been highly tested to prevent hacking and will immediately dissolve if a system becomes jammed.
Future of Platooning
Platooning is still in its early phases and requires more research before all 50 states will allow it. Only half of the U.S. currently authorizes the technology, but companies like Peloton are embracing industry standard testing. Substantial in-lab and track testing must be done first before moving on to on-road testing in order to maximize safety standards. As more and more companies continue to do this, then more states will continue to change their laws.
Now is a great time to enter the commercial trucking industry. With the demand for drivers higher than ever, you can expect job security, great pay, and plenty of stories to tell from your time on the open road. While trucking is an excellent and prevalent career choice, being the most common career in 29 states across the U.S., it often requires upfront investment to get started. Just like owning a business, truckers have to pay their overhead. This can include purchasing the truck, replacing parts, and taking care of costly repairs.
If finances are holding you back from your new career as a trucker, or if the truck you currently own is in need of updates, financing may be the solution for you. Luckily, companies like Mission Financial are here to help you get the financing you need. Here is what you need to know about financing through Mission Financial.
Commercial Financing Options
Mission Financial offers financing for dealerships as well as owner operators. While we provide loans for new and used trucks, we also offer financing options for other trucking necessities including:
- Tire Replacements
- Operating Capital
- Lease Purchase Buy-Outs
- Loan Refinancing
- Truck Repairs
- Licensing and Permits
Commercial Vehicle and Business Auto Loans
When applying for commercial vehicle financing, it is important to understand that a business auto loan is much different than an auto loan one would normally get for personal use. Due to the stricter rules surrounding commercial loans, it is more important to make payments on time. The interest rates for business auto loans can also be much higher than other loans. While a personal loan typically has an interest rate of 5 percent or less, interest rates on commercial trucking loans can range between 5-30 percent. These differences will be important to understand and recognize when applying for financing.
How to Apply for a Semi-Truck Loan
Before applying for financing, there are a few things you will need to have ready. Follow these steps to make sure your application process is as smooth as possible.
1. Determine Eligibility
Before applying, it is important to check to see if you qualify. Qualifying factors include your credit score, how long you have had your CDL, your down payment, and the age of the truck. If you are a first-time owner operator or have a low credit score, you can still qualify for a loan through Mission Financial. In fact, our company specializes in low credit loans. While you may still choose to apply for a loan, it is important to understand your financial state before taking this step.
2. Gather Needed Info
Even before shopping around for a truck, you will want to get all of your paperwork in order for your financing. This is an important step because when you find the perfect truck, you will need to act fast. If another buyer comes in while you are trying to gather information, you may miss out on the vehicle. Before applying for financing, have the following information on hand:
- Cell phone contact
- Current Commercial Driver’s License (CDL)
- Proof of insurance with at least a $1,000 deductible
- 6 references or 10 references without active phone bill
- Bank statements and/or tax returns
Depending on your financial situation or employer, you may also need the following information
- Co-signer Statement
- LLC Agreement & Operating Agreement
- Articles of Incorporation & Corporate Resolution
3. Find Your Truck
Once you have determined eligibility and gathered the necessary information, it is time to find your truck. It will be important to find a truck that meets the hauling requirements of your business.
After you have found the right vehicle, be sure to negotiate the price and get a written quote on the purchase of the truck. Along with the price, the written quote will need to contain the following information:
- Title and Vehicle Registration
- Pictures of the truck you wish to finance
- Original signed credit application
- Guarantee of Title
4. Get the Right Insurance
It is possible to get pre-approved without insurance. However, providing proof of insurance is highly recommended when applying for a commercial loan. Your insurance needs will be based on the type of business, but most truckers need the following types of insurance:
- Primary liability coverage
- Cargo coverage
- Bobtail coverage for non-trucking use
- Physical damage coverage
5. Submit Your Documents to Mission Financial
Once you have completed the above steps, it is time to apply for financing through Mission Financial. Having everything you need ready in advance will make the application process go smoothly for all involved parties.
Applying for commercial truck financing can seem like a daunting task. However, with companies like Mission Financial that specialize in semi-truck and business auto loans, we are ready to work with you to get you on the road in no time.