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Banks won’t finance older trucks

Discussion in 'Financing' started by 4seasons, Nov 3, 2018.

  1. 4seasons

    4seasons Member

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    I’m looking for a triaxle dump. in my experience, which is only a couple different banks. They set a 10 year limit on age of the trucks they are willing to finance. Even if I went with a more expensive 6 or 7 year old truck, the bank gave me a 9 percent interest rate which is much higher than any of my 1 tons, excavators, skids etc. And this was an “equipment finance bank”. I have an 800 credit score. I’d appreciate any possible leads on reasonable banks that will finance an older $30k truck or either a newer truck on a longer term length.
     
  2. Wes J

    Wes J Senior Member

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    Do you have farmers where you are? If so, find out where they do their banking. The entire farming world revolves around borrowed money and old equipment.
     
  3. ianjoub

    ianjoub Senior Member

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    With an 800 credit score, you should be able to get an unsecured loan for $30k. You should also be able to get a home equity line of credit. Perhaps the banks just feel you are too far extended where you are right now?
     
  4. 4seasons

    4seasons Member

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    Yes, I think so. I already have a 35k unsecured credit line but I need it for my operating expenses every spring and pay it down throughout the year. I keep myself fairly broke at all times. It’s either that or become fairly well established around retirement time. Only way to do excavation is to get a delorean and go back to get your dad to start an excavation business in 1979. Home equity would work, but I would save the cash before I collateralize my house against a 25 yr old truck.
     
    Last edited: Nov 3, 2018
  5. John C.

    John C. Senior Member

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    Put yourself in the banker's position. I'm supposed to loan you X amount of dollars on a ten year old used truck that has three quarters of a million miles or more on the odometer, with original or maybe once rebuilt engine and drive train, with dubious maintenance records, mixed brand tires and amounts of wear and you are going to put any driver in it that I have no insight or control over and you want a cheap interest rate.

    What you might consider instead is a talk with your insurance agent and put together a coverage plan that would make the banker feel better that his money is protected. Even using the truck as collateral is a non-starter. The only place where used trucks ten years or older change hands in a liquidation sale is an auction. The banker only has to make a quick check on the Ritchie Bros. auction site to see what kind of return that might bring.
     
  6. old-iron-habit

    old-iron-habit Senior Member

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    I am with you. I like a warm bed at times.
     
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  7. ianjoub

    ianjoub Senior Member

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    ^^^^^^^^^^^^^

    I agree as well. I owe nothing to anyone.

    I have lots of people with less than me tell me how I am doing it wrong. I should leverage myself, or use other people's money to make more for myself. NO THANKS. If I can't buy it in cash, it can wait.
     
  8. LowBoy

    LowBoy Senior Member

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    Owner, Iron Mountain Iron & Equipment (Transport)
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    This subject kinda hits home for me right now, in real time. I run older trucks because I choose to for various reasons. One, for the ease/simplicity of repairs, another for the freedom from spying with ELD's, among others. Plus it's cool.

    I just replaced the original engine in this thing this past June with an upgraded 3406B Cat from the OEM 3406A PCTA and it's been a great improvement in fuel economy, power, oil consumption is zero compared to the old motor. Now...4 months into it, she's starting to use coolant on me all of a sudden and it ain't going on the ground. Just kick me in the teeth and get it over with.

    Been talking to Cat about a Platinum Kit rebuild with a 4 year warranty, and they're talking $28,000.00 for the basics. You know they will find more to add to it if you let them. I can do it all myself, and probably will end up that way. Still gonna be 12k-14k in parts. I've been through some circumstances that'd curl your hair in the last 24 months that I've tolerated from a wreck that wasn't my fault that set me upside down financially, and it's a drug dealer that caused it so forget about any reimbursement ever happening; His insurance company is a bunch of scumbags and won't admit fault even though I had 2 off duty police officers watch the accident in real time. That 110K I lost in revenue, the 42K invested in that truck that was totaled, the 30K I had to pull out of the sky to keep going for 4 months while rebuilding this truck to get back in business, etc...it's been a real treat living with all that wondering what's next.

    Been trying to secure funding to do a complete overhaul so I can have that peace of mind warranty for 4 years, but I see the handwriting on the wall. I'll be yanking the head off, fixing whatever it is that's causing compression in the coolant system and slapping it back together and just live life. Too bad it has to be this way, but they just don't get it, these banks. My bank will fund it but they want my first born, my right arm, my wallet and an ankle bracelet for 3 years attached to me.

    They just asked me for proof of what I've invested in it to make it worth the $22k I'm looking for, so I guess I'll just sit here and go through all the receipts and add up the parts and pieces and show them that, plus another title to another truck, and do it in the long run. They don't make it easy to just walk in and sit down and get it done like they used to. And my credit is perfect. Gets pretty discouraging sometimes. Not like I'm scratching around for work either, I'm always flat out busy all the time. If I could get through a full year without a stinking setback, tragedy, or mishap that I didn't cause, maybe I could accumulate the funds to do it all myself. But the forces that be won't allow me to, they continue to test my endurance. I got plenty...but it's running thin after all these years.

    That's my pet peeve for the day. Forget banks....pay cash. Be self-sufficient and learn to stay that way because when you NEED it, it ain't there in most cases.
     
    Spud_Monkey likes this.
  9. ianjoub

    ianjoub Senior Member

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    Things are getting back to the way they were 40 years ago. The only way you can borrow $$$ from a bank is to prove first that you don't need it.

    Of course, I read somewhere: Neither a borrower or a lender be.
     
    LowBoy likes this.
  10. LowBoy

    LowBoy Senior Member

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    Here here...I am in total agreement with ALL of that my friend. The borrower is the slave to the lender.

    I have been Mr. Nice Guy here recently in the last month. One fellow in particular contacted me and needed $130.00 (seems like such a miniscule amount to be needing really,) so I Walmart'ed him $200.00 and told him to do the best he can to get it back, even if $50.00 at a time. So far, no attempt has been made for reimbursement. Meanwhile, I go hunting down people if I owe them a dime. Just shows some people's integrity that way really fast.
     
    old-iron-habit likes this.
  11. ianjoub

    ianjoub Senior Member

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    If he heads the other way every time he sees you, it will be the best $200 you ever spent!
     
    Silveroddo, old-iron-habit and LowBoy like this.
  12. 4seasons

    4seasons Member

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    Buying new is by far the best/easiest way to finance. The obvious problem here is cost. You have to have the work load for new stuff. Cat financing was the best finance experience I’ve had. For a triaxle though, the difference between the 30k truck I need and 140k new one, is far too big of a gap to make that leap.
     
    td25c likes this.
  13. td25c

    td25c Senior Member

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    That's a huge gap in the numbers . I like easy decisions .:)

    You find a good loan officer and first thing they want to look at is a " Financial Statement " .

    Your assets , income & liabilities all out on the table where they can lay a slide rule down on it and say " yes this will work " :) . Or " Hell no don't do this !" :eek:

    Its not so much what your looking at buying … It's more about protecting a customer and helping them make a good decision based off numbers from the Financial Statement .

    It's all about the money ! :D
     
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  14. JPLUMMER

    JPLUMMER Member

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    We do not have any age restrictions on the trucks we will finance. However, we do look at the mileage on the truck. Typically we will finance Class 8 trucks with up to 750,000 miles. If the mileage is over that we would require documentation of a recent overhaul.
     
  15. John C.

    John C. Senior Member

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    So would it matter who did the overhaul and what they did to the asset? Does there have to be a warranty on that work?
     
  16. JPLUMMER

    JPLUMMER Member

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    We just need to be able to see an invoice showing the overhaul parts and labor performed at a mechanics shop. Warranty helps but not necessary. The more detailed the invoice the better.
     
  17. old-iron-habit

    old-iron-habit Senior Member

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    Out of curiosity, with excellent credit, what is the ballpark interest rate on both new and used trucks now.
     
  18. Shimmy1

    Shimmy1 Senior Member

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    I realize that you have to draw a line in the sand, but I would take exception to the fact that you will finance a truck that is showing 748,579 on the clock, but not 752,689 unless it's been rebuilt. I'm maybe assuming too much here, but a truck with 650k can sh1t the bed just as fast as a truck with 900k, both having original engines. My opinion, I'd much rather spend my money on a '96 through '02, and plan on overhauling the engine in the next few years than take a chance on a 600k truck that more than likely is going to require an overhaul as well in a couple years, plus the added aggravation of emissions troubles and lost time in the shop.

    Just an observation.
     
    Last edited: Dec 29, 2018
  19. John C.

    John C. Senior Member

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    Credit rating is the most important factor on loaning money. Most any financier will look at that and then weigh the condition factors of the asset before they loan money against it. The biggest line in the sand for trucks that I've personally seen is when they reach a million miles. The market value is small and the risk of big dollar repairs can be pretty high. Loan officers might be pretty nervous about that.

    The issues I've seen for "overhauls" is that if there were no warranty, all that was done was maintenance to keep the truck on the road. In other words what was the truck worth with a component that prevented the truck from being used? Who is going to repair that component should it fail while the truck is still being paid for? If the truck can't be used, are the payments still going to be made? This still circles back to the credit rating. Most anything can be financed if the bottom line of the borrower is large enough.
     
  20. farmerlund

    farmerlund Senior Member

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    Our local banks and credit unions loan money for older trucks and equipment all the time. They don't have a higher interest rate or any special restrictions. Rates are around 5.7%-7% depending on the customer or the lender.
    I agree with Shimmy, a 7 year old truck with 500k can cost you as much a 20 year old one with 900K. They all eat your wallet at some point. LOL
     
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