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Truck Finance & Insurance
Q- How much will I have to put down?
A- Down payments vary depending on the buyer’s overall credit history. A seasoned owner operator can rely upon established credit history to reduce down payment requirements. Remember, a lower down payment will cause equity in the truck to build at a slower rate. Establish a desired trade cycle when purchasing to help you determine down payment requirements to achieve the trade equity you desire when it’s time to trade for your next truck.
Q- How long should I finance my truck?
A- Typically you can finance new units up to 60 months. Used models vary in months of repayment depending on the age of the truck. By selecting a lower term, fewer months of repayment, you can build equity faster due to the larger monthly payment. Longer terms, meaning more monthly payments, will create lower monthly payments. However, longer terms with lower monthly payments could effect your desired trade cycle.
Q- What could I expect my interest rate to be?
A- Interest rates are established on an individual basis and are largely effected by credit history, driving experience, home ownership and status of revolving debts. A first time buyer can expect to pay more interest than an experienced owner operator. Fleets that operator 10 or more power units could qualify for special financing.
Q- What insurance do I need to cover my truck?
A- If you have financed your truck, the finance company will require proof of physical damage insurance (comprehensive and collision) with their name and address shown as loss payee. Primary liability and non-trucking (bobtail) liability are not required coverages by the finance company, but are highly recommended for the truck owner’s protection.
Q- What is primary liability?
A- Primary liability insurance covers the truck owner’s financial responsibility when involved in an at-fault accident. Primary liability coverage is typically provided by the motor carrier while under their dispatch.
Q- What is non-trucking (bobtail) liability?
A- Non-trucking insurance covers the truck owner’s financial responsibility of an at-fault accident when not under dispatch by the motor carrier.
Q- Should I lease or purchase?
A- A lease is usually desirable for 1 of 2 reasons. One, when you only want to expense the monthly payment and not claim the unit as an asset. And, two, a lease typically has at least a 15% balloon payment at the end of the term providing a cheaper monthly payment. An owner operator looking to lease should consider their desired trade cycle. Equity in a leased unit will not build as fast due to the balloon payment.
Q- What is a TRAC Lease?
A- A TRAC Lease is a tax lease where the finance company retains the depreciation of the collateral and the customer expenses the monthly payments.
If you have any questions relating to truck finance and insurance please do not hesitate to contact us.
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