Looking to finance an older semi-truck? Financing older commercial trucks can be challenging, but it doesn’t have to be.
At Mission Financial Services, we understand the unique challenges of financing used commercial vehicles.
Let’s discuss why some seek to finance older commercial trucks, the disadvantages of financing older vehicles, and the steps you can take to finance these.
Everything You Need To Know About Used Semi-Truck Financing
In 2020, the North American used truck industry stood at a whopping 13 billion dollars. With so many older trucks on the market, financing older commercial trucks can take time and effort.
In this guide, we’ll walk you through what you need to know about used semi-truck financing so you can make an informed decision about your next truck purchase.
Why Do Some People Prefer Older Commercial Trucks?
Some truck drivers prefer financing older commercial trucks for various reasons. Some popular reasons for choosing an old rig could include any of the following:
- Lower cost: Older commercial trucks are often less expensive, appealing to those on a limited budget or a first-time buyer. Lower prices also make it easier to get financing for the truck.
- Simplicity and ease of maintenance: Older trucks typically have simpler mechanical systems and fewer complex electronic components than newer models, making them easier to maintain and repair.
- Classic look and style: Some drivers appreciate older commercial trucks’ classic look and style! Yes, they have a nostalgic or vintage appeal. This can also set them apart from the more modern-looking fleet trucks on the road.
Disadvantages Of New Semi-Trucks
Another reason people prefer older trucks is that new trucks have a list of disadvantages. Some typical issues may include the following:
- High cost: New semi-trucks can be very expensive, often costing several hundred thousand dollars. This high cost can make it difficult for owner-operators or smaller trucking companies to afford the upfront investment. Never mind the ongoing costs of maintenance, insurance, and fuel.
- Depreciation: New semi-trucks can quickly lose value due to depreciation in the first few years of ownership. This can be a concern for those who plan to resell the truck. Depreciation can result in a significant financial loss.
- Technological upgrades: Newer trucks often come with the latest technology upgrade. These can be costly to repair or replace if they break down. You can end up with increased maintenance costs. Some drivers may prefer simpler mechanical systems that are easier to repair and maintain.
- Limited customization: New semi-trucks have limited customization options. They are mass-produced to meet industry standards and regulations. This can make it difficult for drivers to personalize their trucks to meet their needs and preferences.
It’s crucial to weigh the advantages and disadvantages of buying a new versus used semi-truck before deciding, as each option has its unique set of considerations.
Why Do Some Companies Not Finance Older Trucks?
There are a few reasons why some companies don’t finance older trucks. One reason is that older trucks may not meet particular safety and environmental standards required by law.
For example, newer trucks may have better emissions controls and safety features that help prevent accidents and reduce their impact if an accident does occur. Financing older commercial trucks that do not meet these standards could result in legal and financial liabilities for the lender if the rig is involved in an accident or causes harm to the environment.
Borrowers must research their options and find a lender willing to work with them and their specific needs.
Securing Your Older Truck Loan in 5 Steps
It’s easy to finance older commercial trucks when you work with the right commercial fleet financing company, like Mission Financial Services. Here’s our easy 5-step truck financing process.
Step 1: Decide Between a Commercial Truck Lease or Loan
When securing financing for an older commercial truck, the first step is to decide whether to pursue a lease or a loan.
A commercial truck lease allows you to use the truck for a set period while making regular payments to the lender. At the end of the lease, you may have the option to purchase the rig, return it to the lender, or trade it in for a newer model.
On the other hand, a commercial truck loan involves borrowing a set amount of money to purchase the truck outright. You will then make a regular down payment to the lender, including principal and interest, until the loan is paid off.
Each option has pros and cons. The decision will depend on your specific needs and financial situation. Commercial truck leasing may be more attractive for those who want to avoid the upfront costs of purchasing a truck.
At the same time, a loan may be a better choice for those who wish to own the semi-truck outright and have more control over their vehicle.
Step 2: Understand Your Credit History
One of the most important factors lenders consider when evaluating a commercial truck loan is your credit history.
Before you apply for financing, it’s essential to understand your credit history and score.
Your minimum credit score will determine the interest rate, loan terms, and the amount of funding you qualify for. A higher credit score will generally lead to better loan terms and a lower interest rate. On the other hand, a lower credit score can limit your options and may result in higher interest rates.
Even if you have poor credit, don’t worry. At Mission Financial Services, we understand that only some have perfect credit. We provide financing options to truck drivers and small trucking business owners, even if they have no or bad credit.
Step 3: Get Pre-Approval For Your Commercial Vehicle
Once you’ve decided whether to lease or buy your truck and understand your credit history, it’s time to get pre-approved for your commercial vehicle loan. This process involves submitting a loan application to a lender.
The lender will then review your application and determine if you qualify for financing. At Mission Financial Services, we make it easy for you to get pre-approved by offering an online credit application that you can fill out from your home or office.
Step 4: Choose Your Older Truck
When choosing a second-hand commercial vehicle, looking for a few key factors is essential to ensure you’re making a sound investment. Here are some things to consider:
- Age and condition: While you may be looking for an older truck, you still want to ensure it’s in good condition and well-maintained. Inspect the vehicle thoroughly, checking for signs of wear and tear.
- Mileage: High mileage can be an indicator of potential future repair costs. Make sure to factor in the mileage when considering the overall cost of the truck.
- History: Check the truck’s history report to see if it has been involved in any accidents or has had any major repairs.
- Purpose: Consider the truck’s intended use and ensure it meets the necessary specifications and requirements for the job.
Considering these factors, you can make an informed decision when choosing an older commercial truck that meets your needs and budget.
Step 5: Start The Financing Process
Once you have decided on the older truck you want to purchase and have received pre-approval, it’s time to start the used truck financing process. This step involves providing all necessary details about the vehicle to Mission Financial Services, including:
- Make and model
- Purchase price
Our team will then review the application and all related documentation, such as the truck’s title and registration, to ensure everything is in order. Once we’ve confirmed everything is in place, we’ll provide the funding necessary to purchase the older truck.
Work With A Commercial Truck Financing Company That Understands You
Financing a used semi-truck can be a wise investment for many owner-operators and small fleet owners. By following the five steps we outlined, you can get pre-approved for financing older commercial trucks, choose the right vehicles for your needs, and start the financing process with confidence.
And remember, Mission Financial Services is here to help. So why wait? Apply for financing and take the first step towards owning your used semi-truck.