Today's economic times have created havoc at all levels.
Whether you are financing or refinancing a house, going
food shopping or looking to finance a commercial truck or
automobile, times have changed. The lender and market
conditions have created a new market pertaining to
financing and its related costs.
With Lenders commencing new business deals and receiving
hords of repos back from customers, either voluntary or
not, the lenders'job to survive with today's economic
climate is more difficult than ever before. Additionally,
we are just starting to see the dealer/lenders come up with
new gas price saving promotions which we will discuss later
in this article.
Today, lenders must take back their repos back as quickly
as possible, recondition their inventories, and put them
back into the their revenue stream ASAP with extreme
caution. This is a very difficult task based upon today's
economic conditions and the price of oil going up every day.
Most lenders/dealers have broken away from traditional
lending practices and come up with ingenious promotion
tactics. Some have advertised as low as first payment only,
sixty months to repay, regardless of age of the truck, and
prior bankruptcies waived. Additionally, their credit score
requirements may start as low as 575 and start up
businesses are welcome.
The type of trucks we can consider here range from dump
trucks, garbage trucks, box trucks, water and vacuum
trucks, boom trucks, day cabs, semi trucks, concrete
trucks, etc, etc
For the consumer, this presents itself with an unique
opportunity, but with perils of potential problems. The
employee who never had a prior opportunity to enter the
finance market has changed at this junture. The start up
business can enter this market especially for a repo and
come away without a lot of investment risk. First payment
only deals were a pipe dream before, but today the economic
conditions have changed these factors. The lender giving
sixty months terms on all vehicles regardless of age
reduces the monthly payments and entices the buyer to the
financing arena. Favorable residual buyout clauses for
passing of title and other promotions have made this a
buyer's market.
With all these favorable buyer concessions, one thinks he
should be comfortable to enter this market but there are
many pitfalls to consider. The new game in town that is
getting everyone's attention is the price of oil and its
effect on gasoline prices. With the price of oil over $130
a barrell and possible thought of it reaching over $200 a
barrell may cause the buyer to reconsider its decision
making. The consumer, owner operator, the fleet owner has
to inject these factors into its decision making whether it
is a new truck or a repo. Additionally, with the concern
about global warming and the pressure for cleaner
emissions. the buyer is on the defensive to understand all
these variables.
Additionally, the consumer must understand his buying
patterns relating to buying diesel, where to buy it and how
to preserve his engine. Diesel fuel can sometimes vary from
one shipment to another or from one area to another.
Customers also switch from one fuel vendor to another and
suppliers sometimes change the fuel they are offering. The
three things that vary the most in diesel fuel are cetane,
weight and viscosity.
Today the balance between the finance costs of the truck
must be equally weighted with the gas expenses. These
components must be evaluated with the revenue curve to
ascertain a favorable outcome. This applies for the start
up as well as the seasoned business.
When commencing a deal today, it would be advisable to
consult an accountant and/or attorney to make sure you
understand the pros and cons of your investment in today's
economic climate......
----------------------------------------------------
J.M Luna has over thirty years in the financial field. He
has experience in accounting and taxes, leasing, and
commercial and hard asset money loans.U.S Corporate Capital
Leasing assists with the start up as well as seasoned
businesses.
http://www.cclgequipmentleasing.com/truckfinancing.htm
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