When it’s time to check out heavy trucks for sale in Texas, you have a lot of work to do. First, you must consider all the pros and cons of buying vs leasing. Once you decide to purchase your vehicle you need to check into financing options. In fact, you may have a lot more choices than you realize and this can raise several questions or concerns. Here are 3 common questions (with answers) about borrowing money for your next commercial vehicle.
1. I have poor credit. Can I still buy a good vehicle?
Yes you can, but you must be very careful about who you do business with. Some companies are there to take advantage of you while others offer legitimate help. Here are some things which should raise a red flag:
* Special fees to ensure your application will be accepted.
* Unable to get a paper loan copy
* Special membership fees
* Too good to be true
When you shop heavy trucks for sale, make sure to check out your financing source with the Texas Better Business Bureau before you sign any papers or agree to terms.
2. How much money will I need to put down?
Down payment amounts can vary a great deal from lender to lender. This is why it’s very important to shop around. Many truck financing companies like to have a 10 percent down payment because you are less likely to default when you have a substantial investment in your loan. In other words, the more you put down, the less of a risk you are to the lender, so you will enjoy lower interest rates and better terms on average.
The bottom line: a reputable lender will tell you upfront how much down money you need. If not, there could be something wrong.
For poor credit, expect to pay larger down payments. There are programs for owner operators in which they can lease purchase, but this comes with several disadvantage. For instance:
* Long term commitments
* Low pay until the truck is paid for
* You are essentially working for the company and not yourself.
3. Are there specific risk factors lenders look for?
Here are six common risk factors, most truck lenders consider:
* Credit rating
* Length of time in business – new businesses are considered high risk.
* Age of truck – the older the truck the harder it is to obtain a loan.
* Owner operators – independent truckers are riskier than those working for a company.
* Cash reserves – this is a window into the health of your business.
* Who you buy from – checking out heavy trucks for sale from a Texas dealership is far less risky than buying from an individual.
