Highway tractor financing and Highway tractor trailer financing is a more specialized form of lending that is typically provided through leasing companies. That being said, banks and other secondary debt lenders can also have loan programs to accommodate this type of transportation equipment financing requirement.
Because of the large volume of highway tractors in use today, there is a strong need for both new and used highway tractor financing facilities. For used equipment, the rates and loan or lease terms are going to be highly related to the age, condition, and mileage of the unit. Most used highway tractor lease financing commitments will require a down payment of at least 10%. This can vary among leasing companies between Canada and the U.S. as well.
For new highway tractors, there is more sources of financing available as many of the major manufacturers will have their own financing programs to offer potential buyers with some manufacturers providing both loan and lease programs to choose from.
One of the big decisions to be made with respect to new highway tractor financing is a loan or leasing option. Leasing can provide the added flexibility of going into an operating lease versus a capital lease which works very similar to a loan. For some truck drivers and trucking companies, the operating lease option is more preferred in that at the end of the leasing term they can turn back the truck to the financing company without any further obligation. This equipment financing strategy is based on the borrower or lessees assessment of the future wear and tear associated with its truck fleet and its set up for doing long term repairs as required. Some companies prefer the operating lease so that they are always using equipment that is five years old or less, while others are prepared to finance through a loan or capital lease with the intent of owning the asset at the end of the loan or lease payments and maintaining it over a longer period of time.
If you have a highway tractor financing need, I suggest that you give us a call so we can quickly assess you requirements and discuss the best financing options and loan or lease structures that could best meet your needs.
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