First time Buyer

pearlpro · Jan 31, 2012

I just tried to buy a truck, Ive got good credit, good credit score, good job and contract, even Commercially financed Business Loan for 10 Months, Got turned down for the Loan, its frustrating when your ready to make this move and 2 months of credit reporting makes a difference. Im now entertaining other options I really dont want to go back to Penske and hand them buckets of cash...which I was doing....so who is a First time Buyers best freind ???

zorry · Feb 1, 2012

CASH . Cash. MORE CASH . Sorry, tried posting CASH only but 10 character minimum.

cableguymn · Feb 1, 2012

I am in the same boat. No one is in the mood to write a note on a commercial truck these days. I am going to keep running my 02 until someone says I can't.

zorry · Feb 1, 2012

Seriously, financing is very tough right now. I have been in trucking 30+ years. Have financed numerous trucks with never a late payment and have a credit score over 800. The place where I financed my last three trucks made me jump thru hoops that I could not imagine. I spent weeks talking to them. The biggest truck financing in the country approved me in 30 minutes. An expedider finance expert turn me down because I deserved the rate lower than he was willing to write. Your local bank and or credit union is the best place to start. Second place is family if you have someone that can afford to lose the money. If Uncle has 200,000 in the bank and he's willing to risk $20,000 on you, OK. Don't borrow against Mom's house. If you get hurt and lose the truck you don't need her at your breakfast table telling you every morning how miserable she is since You lost Her house. Again,the more cash, the better.

cableguymn · Feb 1, 2012

OP, do you have a down payment? Is it enough to by a 2-8 year old cargo van? If so, start with that and get rolling. bank everything you can.

Pay cash for the rig you want once you have enough in the bank to buy the truck AND operate for 4-6 months.

Sell the van and likely recover 50-75% of what you paid for it.

pearlpro · Feb 1, 2012

I planned on a Large downpayment but not half the truck value, I have Accident Insurance in case Im injured etc, its all good they advertise these FIRST TIME buyer plans, GET BACK TO BUSINESS PLANS its all BS....In three months Ill go to a DIFFERENT truck dealer and make a deal....Its ridiculous that the money is there to be earned but you cant buy the truck....Ill go back to a short vehicle lease until I have a deal this summer...Daimler, or Freightliner or ??? I dont think they have a plan its just a Lure to try and get you to apply then your turned down and your Credit rating gets dinged,,,,BSBSBS

zorry · Feb 1, 2012

Don't take this as an insult . If Frtlnr won't finance you then you are probably not as ready as you think you are. The problem may be expeditors are harder to get financed than your normal semi truck. I know two successful fleet owners that worked hard to finance equipment recently. They both were upset but finally got it done.

FinanceGuy · Feb 1, 2012

I noticed that many of you have posted that you are members of the OOIDA. Unfortunately, they will not finance expediter trucks even with Class 8 tractors pulling the boxes. I know the OOIDA finance program well because I started the finance program for the OOIDA in 2004. In fact, they still sent all applications to finance expediters to my office.

At Expediter Equipment Finance we do offer financing for first-time buyers. You will need a credit score above 600, have a 20% down payment, and it helps to be a homeowner. For straight trucks we administer a separate finance program for Expediter Services where we work closely with our lenders to get more trucks approved.

If you have a truck you would like to discuss give me a call at 800-481-0859.

zorry · Feb 1, 2012

Finance Guy may be who you need. Remember you need some reserve set back after your dp. Also, you can easily lose a few weeks getting out of your truck, getting to your new truck, leasing on,decals, qualcomm,etc. Insurance deposit,plates, etc and before you pull your first load you'll say where'd all my money go ?

Dynamite 1 · Feb 2, 2012

financeguy, you mention homeowner. you are not using home as part of the collateral for the loan are you. just interested in that comment. also, i know this is a broad ? due to the difference in peoples credit but can you post a general high/low interest rate you have been seeing. lastly, are your loans figured on simple interest or apr. thanks for the info.

pearlpro · Feb 2, 2012

Ive done a little more research and basically I need two more months of Credit history before they would consider me, I wouldnt put my Home On ANY loan today, Im a hard working guy but with the turmoil in the world, Iran, Oil prices etc, I would hate to see some Worse case scenario develop and lose my home...So Ill Rent for three months and then work towards the new vehicle, I may even buy a Used truck and build the warchest for another year and then have a trade in and Deposit. Im pretty confident in my employer and feel its a good place to stay, So well just keep working to a better future.

zorry · Feb 2, 2012

It'd be good to get some general answers to different scenerios. What should a first time buyer expect with a 600 score and 20% down ? My rule of thumb is there isn't enough profit to pay over 10% interest. This may be an outdated thought, I was fortunate enough to get my start in easier times. Also explain simple interest vs compound interest. A lot of experience people don't understand how things have changed since they bought their last unit.

FinanceGuy · Feb 3, 2012

For first-time buyers you should expect a lender to require a minimum credit score to be 600 up to 650 depending on the lender. Because you do not have any commerical credit from the lenders to review your personal credit is very important.

It is very common for down payment requests to be in the 20% to 25% range. The down payment is also very important to the lenders because they want to have some equity in the collateral and they want you to have some serious "skin in the game". They want to be sure that you cannot just walk away from a truck if you decide you don't want to do this anymore.

Many lenders (not all) require that you be a homeowner. They do not want to put a lien on your home!! There is belief among lenders that homeowners are more financially stable than those who are not, it's that simple.

You should expect to pay higher rates as a first-time buyer than what is offered to experienced owner-operators. Experienced O/Os have commercial credit history that a lender can review when making their financing decisions. First-time buyers have none. Rates will be in a range of 10% up to 15% for applicants with good to excellent credit. If you want better rates than what the commercial lenders are offering you will have to go to your own bank or credit union. Most will not finance commercial trucks but some will. I would not hurt to ask.

Thanks,

Steve aka Finance Guy

zorry · Feb 5, 2012

Steve, please explain compound vs simple interest.Pearlpro, if you were my kid I'd tell you don't buy new until you have a minimum of 20% down and can get under 10% apr. Used 33% or more down and 10% max interest. You're supposed to make money for yourself. Some first time buyers are spinning their wheels with all profits going to the finance company.