The Role of Down Payments in Semi-Truck Financing

While investing in a semi-truck can provide you with a business opportunity, the amount of investment required is significant. This is why most drivers opt for commercial truck financing to start or expand their fleet. 

If you have an interest in purchasing a new (or new-to-you) semi-truck, then there is a good chance you have thought about how much money you will need to make it happen. What is the purpose of a down payment in semi-truck financing? And how much of a down payment will you need? 

We have all of your answers — and more. 

What is a Down Payment on a Semi-Truck? 

The down payment on a semi-truck is an upfront cost that the buyer will give the lender in order to secure funding, showing that you are serious about your investment in the truck. This will allow the lender to reduce their risk in supplying you with a loan.

Rest assured that your down payment amount will be applied to the cost of the truck. As a result, you are financing less than you would be if you didn’t supply this portion. And, depending on the interest rate of your loan, this could potentially save you a ton of money. 

While no one wants to have to come up with a large sum payment, it does ultimately serve both parties in the transaction. Lenders have a reduced risk — and you will have less to finance and pay back.

How Much is a Down Payment? 

The amount of your down payment is going to vary based on a few factors. However, you can usually expect to put down about 10 to 30 percent of the truck’s value when financing. Most lenders will set the terms of their loan to include a specific down payment requirement. Let’s take a closer look at what may influence this amount. 

The Truck’s Value

Semi-trucks with a higher value will require larger loans. This will almost always result in a higher down payment. As mentioned, you can expect to pay a percentage of the truck’s value upfront. If that value is high, this payment will be also. 

Your Credit Score

Your credit score allows finance companies to gain an idea of just how big of a risk they are taking when agreeing to give you a loan to purchase your semi-truck. If you have a high credit score, you will be seen as a lower-risk client and will often have a lower down payment. 

Poor credit scores, on the other hand, are a red flag for lenders. To reduce their risk, you can almost always expect to be required to put down a higher down payment. Although this is not always an ideal situation, it does give you a greater chance to be able to purchase your truck and enhance your career. 

Who You Finance Your Semi-Truck With

Who you decide to finance your semi-truck with will also impact how much your down payment will be as well. Lenders are usually all comparable to one another, but there are a few that may offer you a lower down payment — or may require more. Each one will set its own terms when it comes to requiring these upfront funds. 

Secure Semi-Truck Financing with 10-4 Financing

At 10-4 Financing, we offer many different programs to get you in the semi-truck you have been seeking. And we are here to answer any questions you may have about the process along the way, too. 

Contact us today at (888) 908-7701. Or apply online!