As of 2016, there were more than 500.000 registered trucks in Australia, in lines with NTI’s Guide to the Trucking Industry 2016. The number will continue to grow, as by 2030 the freight task of Australia is set to double. The trucking industry, thus, is a vital component of Australia’s welfare and it certainly is reassuring to see that it is subjected to continuous growth. Many people need to finance their trucks, since buying them with cash outright would leave unmanageable holes in their budgets.
Are there any things to keep in mind when seeking to finance a truck?
Yes, of course. As with anything else you would purchase, you must pay attention to some aspects before you dive headfirst into any offer. The process of financing a truck is fairly easy, but that does not validate recklessness in any way.
Here are the top 5 tips you must consider before financing your truck:
Look at your credit score
As you might know, bad credit score will affect any kind of loan and finance you might want to get, truck financing inclusively. You can still be viable for finance, but you will be paying higher interest rates. The vast majority of dealerships will give you your truck because they can repossess it with the most of ease if you don’t make the repayments.
Opt for short-term finance
Undoubtedly, this means that you will pay higher monthly rates for your truck. A longer term automatically means higher interest rates, and you want to steer clear of them. Keep the term as short as your budget allows it.
Try to pay a certain percentage down
Somewhere around 20% down payment is ideal. First of all, it will decrease the sum you have to pay monthly (workout your weekly/monthly repayments with our calculator). Second of all, you prevent the situation in which you will eventually pay for that car more than it is actually worth.
Pay expenses with cash
When we speak about expenses, we refer to documentation, taxes, registration and other extras that might appear. If these expenses are included in your financing, your loan will be increased. That can be unpleasant, to say the least.
Guaranteed auto-protection insurance (GAP)
This is a type of insurance that is meant to cover the difference between the book value of the car (the actual price) and the amount of money you still have to pay on your financing in case you crash the truck. It is very important since your insurer might pay just a certain amount of the price, leaving you to cover the rest with your own money.
According to the same Guide to the Trucking Industry, there are almost 41.100 businesses in this industry. The latter is expected with 3% from 2017 and over the course of five years, as presented by the Market Research Report concerning road freight transport in Australia. Do you plan on financing a truck? Can you add tips to this list from your own experience?