The trucking and transport sector is under a lot of pressure from customer deadlines that seem to shorten every trip and costs that seem to increase every trip. You don’t need your working life to be made even more difficult when it comes to sourcing finance for a new truck purchase.
To simplify the process, we’re explaining the basics of what finance options are available and where you can source truck finance.
A number of commercial finance facilities are available for the purchase of a truck by a business:
- Truck Rent to Own
- Truck Leasing
- Chattel Mortgage for Trucks
- Commercial Hire Purchase (CHP) for Trucks
It is always recommended that you consult with your accountant about which is the best suited to your business structure.
Differences and Similarities
- Different approaches and treatment of GST, tax deductibility, accounting methods, depreciation.
- Not every element of every loan, ie repayment and interest, is fully tax deductible.
- Elements of the loan have GST applied and claimable at different stages.
- Different lenders will have varying guidelines dependent on the value of the truck.
- The ATO determines some aspects such as residual value of leasing and rent to own
- If structured correctly, all should include a fixed interest rate, fixed monthly repayment and fixed loan term.
- A balloon, residual or a buyback is usually an option.
Truck finance products are suited for:
- New and used truck purchases
- Trucks purchased from a dealer, private seller or at auction.
- Sole traders and owner operators.
- Businesses buying a truck for deliveries for their own operations.
- Small and medium specialised trucking businesses.
- Large fleet and transport operators.
- All types of trucks and trailers including Pantechs, agitators, crane trucks, curtainsiders, livestock haulers, car carriers, tippers and dump trucks, tilt-tray trucks, pallet trucks, refrigerated trucks and many more.
Sourcing Truck Finance
The basic options available to businesses to source a truck loan are do it yourself, ask your accountant to do it or use a finance broker. We cover the major pros and cons of each option.
- DIY: to get a range of quotes to compare you will want to commit time to approaching a number of banks and lenders, possibly have to go through at least some initial stages of an application process with each one just to get a quote. Are you prepared to give up that much of your valuable working time?
- Accountant: might be great at crunching the numbers and keeping you on track with your obligations but do they have the access to multiple banks and lenders to find you the cheapest truck loan? How are their negotiating skills when it comes to getting you the best interest rate?
- Finance Broker: has access to a wide range of banks and lenders so they have more choices so you are assured of getting a better deal. Highly skilled at negotiating and have the bargaining power to push home the advantage on your behalf.
Using a Truck Loan Calculator
For a rough ballpark estimate on a truck loan, you might like to use a truck loan calculator. We know where to access a truck loan calculator – please get in touch for details
We know finance brokers that specialise in truck finance. If you would like their contact details, please get in touch with us.