The business of being a trucker is still a viable profession in today’s economy. Professional truckers often make a capital investment to purchase brand-new tractor trailers. One thing is certain: the cost of new or used tractor trailers have not decreased in the last few years. If you recently visited a showroom filled with brand-new tractor trailers, you are probably wondering how to successfully finance your future purchase. Here are a few helpful hints to help you to successfully finance a semi-truck or trucks.
Things You'll Need
- Credit score
- Down payment
Best Financing Options
Stop. Slow down! You’ve just found the semi-truck of your dreams at the local truck dealership and the salesman has just assured you that you can easily qualify for excellent financing from the credit company that underwrites the loans from his dealership. In fact, he’s walking you to the credit manager’s desk.
Be aware that on-site financing options may not come with the best rates and terms for you and your situation. The rates offered by the truck dealership may be the best rates and terms that they can offer, but these rates and terms are probably not the best rates and terms that your local bank or credit union can offer you for the same purchase.
Are You Credit Worthy?
Know you credit score…Most institutions, today, prefer a credit score above 720 to offer you the best rates and terms for most loans. Even if you have a high debt/income ratio, with a credit score above, 720 you can still qualify for the loan. But what if your credit score is lower than the ideal 720? Will you be able to afford an increase in the rate and term of this purchase?
It is advisable to do your homework before you decide to make a major purchase. To begin:
o get a copy of your credit report from each of the three credit reporting agencies.
o review your credit report
o understand what appears on your credit report and if you don’t, ask a professional for help in understanding your report.
o If inaccurate information is on your report, request the reporting agency to remove this information.
Remember: The higher your credit score the lower your overall rates and terms. After viewing your credit report and the cost of the semi-truck, calculate the monthly payment and normal upkeep to ensure that you can afford the purchase.
Speak to a reputable insurance agent that can provide you with the best insurance at reasonable rates. You will not be able to complete the purchase without insurance. Before you complete the purchase, make sure to include the monthly cost of insuring your new semi-truck with your other monthly payments.
Read and understand the entire contract before signing. Ask questions and make sure that you thoroughly understand everything about the contract before signing.
Leasing versus Buying
Know the advantages of leasing a semi-truck rather than buying a semi-truck. Typically, it is a cheaper initial down-payment and monthly payments to lease a vehicle rather than to buy it. Check with your tax professional to see if leasing would be better for you financially than an outright purchase.
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