How to Finance a Tow Truck
Generally, a tow truck business can take quite a lot of effort and it’s often expensive to acquire the equipment needed to get the job done. There are a number of reasons why getting a new truck might be an attractive option; whether it’s to upgrade to a better model, or to expand your capabilities. No matter what your reason is, you’re likely to find that financing a truck can often help you to get the vehicle you need.
Why finance a tow truck?
Financing can provide a more manageable way for those without large budgets to cope with the outlay of a new vehicle – and this may help you to get your tow truck out to work sooner.
Instead of making one large payment, you’ll typically make smaller repayments on a regular basis until you’ve paid off the full cost of the truck (as well as a set amount of interest on top). This is one of the main reasons why financing has become such a popular option across the tow truck industry.
Options for tow truck financing
Purchasing a chattel mortgage (mortgages on a moveable item of property) when financing a tow truck may be a worthwhile idea. Typically, you’ll be able to take ownership of the truck, while your financier is likely to have a ‘mortgage’ over it until the loan (plus any balloon payment) is paid off.
In most cases, the truck itself will be used as collateral for the loan – so if you want to keep the vehicle, ensure that you make all your payments on time and in full.
Is tow truck financing right for you?
While getting a new piece of equipment by using financing options can often be useful for many tow truck businesses out there, you may be wondering whether or not it’s the right thing to do for your firm. Here are a few things that you may want to take into consideration before you decide to finance the truck you need:
How long do you need the truck?
In some instances, individuals may find that they won’t need to use their vehicle forever – but instead, for a certain amount of time. If this is the case for you (especially where short durations are necessary), you may want to consider leasing a tow truck. While you may not take ownership of the equipment, you’re likely to avoid long-term expenses.
Can you afford to commit to a financial agreement?
When financing, you will have to pay out a certain amount of cash each month until you’ve paid for the full cost of the vehicle. While this is may be a more helpful option than buying outright (especially for those with tighter budgets), you should ask yourself whether you’ll be able to make your payments month on month.
Do you have good credit?
Your credit score can often play a big role in your life when it comes to finances. The lower it is, the more likely you may to struggle to find finance– as it can often make it harder to get the loans you need. In turn, it may also mean that you’ll have to settle for a higher interest rate.
When does it make sense to finance or lease a truck?
Buying a truck outright, or leasing and financing the vehicle you need, can be big financial decision and as a result, should be considered carefully.
If your loan is structured (like a chattel mortgage), you’re likely to be the owner of the tow truck – but you’ll be required to make repayments until your loan is paid off for it not to be considered as collateral. On the other hand, leasing will allow you to use a vehicle without owning it.
If you’re unsure on what option will benefit you most, you may want to consider asking an expert (like an accountant) for the pros and cons of both. This way, you’ll be more likely to make an educated decision.
How to get the tow truck loan you need today
If you’ve been looking for a way to get the tow truck you need for your business without having to pay out the large, lump sum that can come with purchasing one outright; you’ve come to the right place.
So, why not get in touch with us today to find out how we could get you on your way to the tow truck of your dreams.
Disclaimer
This blog article does not necessarily reflect the opinion of the publisher or supplier. It is intended to provide general news and information only. While every care has been taken to ensure the accuracy of the information it contains, neither the publishers, supplier, authors nor their employees, can be held liable for any inaccuracies, errors or omission. Readers are advised to contact their financial adviser, broker or accountant before making any investment decisions and should not rely on this newsletter as a substitute for professional advice.
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