- January 23, 2024
- Posted by: Sergey Grushetskiy
- Categories: Equipment Financing, Semi Truck Financing
Ideally, you would want the financing rates to be low and in your favor when investing in a semi-truck. This would ensure that you were paying less for your truck while having extra funds to take care of your business needs.
But how do you know when it is a good time to buy a truck? How do market conditions impact semi-truck financing rates? And do other factors play a role in financing? Let’s take a look.
When is the Best Time to Buy a Semi-Truck?
If you are looking to purchase a new truck that is last year’s model, the best time to do this is in the late fall through mid-winter. Say, November through January or February. The reason for this is that manufacturers are busy producing the new models — and they are going to need the old ones gone so they have the space.
Many who opt for used semi-trucks are often left wondering when the best time is to buy since they aren’t worried about the newer models being released. Truth is, the same time of year is a great option since it is when the dealerships are clearing their lots.
Of course, if you can secure the right financing, any time may be a great time to invest in your new semi.
How Market Conditions Impact Your Semi-Truck Financing
Simply put, the market conditions are going to play a role in your interest rates — just as they do anything you finance. Higher interest rates can significantly increase the overall amount you will end up paying for your semi-truck. And lower interest rates will save you money.
Interest rates are impacted by market conditions. The best way to see what the going rates are is to reach out to a few lenders. This will give you an idea of what you can expect your total cost to be.
Other Factors That Impact Semi-Truck Financing
While the market can influence the interest rates that lenders are offering, they are not the only factors that impact this rate.
The Loan Terms
It can be tempting to extend the loan term so that your monthly payments are more affordable. Unfortunately, doing so often results in greater interest rates. Keep this in mind when financing your semi-truck.
If you can swing a shorter loan term, try it. You may just end up paying less for your truck in the long run.
Your Credit Score
Credit scores are used by lenders to determine your risk level. If you have a high amount of outstanding debt, missed payments, late payments, and so forth, your credit score will go down.
Depending on how low it goes will determine which loans you will qualify for — as well as the financing rate.
Lower credit scores will almost always lead to higher interest rates. Therefore if you can take steps to boost your score before buying your semi-truck, this could be quite beneficial.
Your Down Payment Amount
A greater down payment means that you are financing less. This can often impact your interest rate, overall payment, and even the approval for the loan.
Although down payments are very important, even large down payments can still lead to high financing rates if you have poor credit. In this situation, putting money down may be required to secure the loan in the first place.
Learn More About Financing Semi-Trucks
Investing in a semi-truck for your business can be overwhelming — especially if you do not know where to turn. With the help of 10-4 Financing, our experts can help you find the right truck at the best rate for you.
Learn more about what we have to offer. Contact us today!