Dump Truck Financing in AMERICA
Utilization of many forms of dump trucks are the foundation of any typical construction site and so many other industries today. Whatever the project, whatever the workload, you will find dump trucks doing the hard work in every state in the country. Although, State regulates the size and body of a Dump truck for their state and construction work, financing however today can be complex, with several options available to make the best dump truck brands affordable for your business productivity and size load will determine the type each businesses will need. However, whichever dump truck you are looking at, it is a significant investment, which is why before thinking about finance, it is important to understand the truck options available and which is right for you.
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The Dump Truck Market Today
As with any vehicle, when it comes to buying a dump truck you have a wide choice of models, shapes and sizes. Engine and chassis from manufacturers like Freightliner, Peterbilt and Kenworth with engines and transmission from Caterpillar, Cummins and Volvo are the most common brand of dump truck manufacturers in the country, but they are not the only ones. Peterbilt, Mack, Caterpillar (for oversized and off-road dump trucks) and International Trucks also offer a quality line up, with Volvo and Western Star Trucks making inroads into market share.
Whichever brand of truck is your preference, the range of sizes and load space on offer mean you really need to understand your business needs before choosing. Size and weight capacity vary considerably, and also influence the cost too. For instance, a Cat 797F is the biggest dump truck in the world, and costs $5 million, but away from the extremes with an average cost of around $200,000, it is the medium duty dump truck that is by far the most popular.
It is easy to see why, they offer versatility and a number of axle layouts and loadings to suit any application, with a dump mounted directly to the truck frame offer simplicity and reliability for long-term service while minimizing maintenance costs. Whether you need modified bodies with hydraulic tailgates or other options, all the major manufacturers provide a standard truck that has the size to fit easily even in tighter locations and the capacity to deal with most requirements.
A super dump truck takes the same basic concept and construction and adds a trailing axle, stretching the bed length possible and increasing capacity. Super Dumps can be rated at up to 80,000 pounds. Other options for increasing the load over a standard dump truck are trailer options, which can also improve maneuverability by placing the dump lifter onto a sperate trailer. With two and three axle options, load capacity can be increased significantly, although these trucks are more unstable with the dump lifted, and so are not ideal for applications where the truck will be used on uneven ground.
So far, we have looked at lifting dump trucks, however, bottom dump trucks are an option in all configurations. Here the load bed opens like a clamshell, dropping the load down below the truck rather than behind. Similarly, for certain applications having the load bed tip to the side can be beneficial, and a side dump truck is the ideal solution. Here the load bed is raised by hydraulics as with the standard truck, but lifts from the side to dump load the load next to the vehicle.
In most cases a standard truck is the ideal solution, but if you do have specialized needs, choosing the right option can save significantly in operational costs down the line. Having decided on a truck, financing it is the next hurdle.
Dump Truck Financing in America
There are a couple of options when it comes to dump truck finance, which is right for you will depend on your use and financial approach.
What is Dump Truck Loans?
At its basic level, dump truck financing allows you to borrow the lump sum capital needed to purchase the vehicle, with the loan then being repaid over set period of time, including any interest charged. The rate of interest is influenced by a number of factors, depending on the vehicle use, credit profile, personal and business, and presiding age and mileage of the dump truck. Throughout the loan term period, the dump truck serves as collateral on the loan, in a similar way to most vehicle finance you are familiar with.
In general, loans are available up to 120% of the resale value of the truck, usually with a maximum of $500,000. Loans are taken over between two and six years, depending on the age of the truck, load size, case and the choice of dump truck based on the workload, with interest rates typically lower than normal on new dump trucks, which can be financed through dealer’s captive manufacturing financing, however, alternative business loans for used outside the dealership can be achieved tremendously cheap for well-established sand and gravel, construction or trucking companies. Competitive rates for used is not the same as brand new dump trucks. The precise rates will depend on current factors such as personal credit, time in business and the amount being financed.
These kinds of loans are available from banks and specialized alternative business lenders, and they offer a straightforward way to finance a dump truck through private seller or independent used truck dealers. However, there are a number of other options available if you choose to buy a new one.
Dump truck financing can come in many form depending on the lender, age of the truck and credit profile from Equipment Finance Agreement to dollar buyout end-lease agreement or simple the true lease where you have huge balloon payment in exchange for lower finance amount and lower monthly payment. Most leases will stipulate what the balloon payment will be upfront to avoid surprise at the end of the term. Down payment will also be based on the credit, size of the financed amount, time in business and age of the vehicle. Most truck financing will require first and last payments cover first payment and maybe security deposit which could be refundable.
What is Dump Truck Leasing?
The first option is dump truck leasing, which has some advantages. Leasing provides the required dump truck in exchange for monthly lease payments determined by the type of truck, the miles and use it is expected to be used for, and the length of the lease with specific balloon payment at the end of the term to make it affordable monthly payment. There are advantages to this for businesses, as the lease cost often includes maintenance provision, warranty and at the end of the lease, you can simply move to return and lease the latest vehicle, so never have to worry about your equipment becoming obsolete. Lease payments also tend to be less than basic loan repayments, due to higher down payment requirements and higher balloon residual due at the end of the lease term, thus, lowering monthly capital outlay, which can be important for owner operators.
The biggest issue with leasing commercial trucks for many is that they never own the vehicle outright. At the end of the lease, the leasing company simply takes the vehicle back upon payment of a balloon or refinance the residual with a new longer term. In some circumstances you may have the option of purchasing the vehicle at the end of these, but that requires another large investment. While you can continue leasing with a brand-new dump truck as the initial lease expires, so always have the latest technology in the truck, however it also means that the payments never end. To keep a truck, you must always pay the lease payments. With a financing approach, when the loan is repaid, there are no more payments to make.
Other than dollar buyout leases, other leases will require not only bigger down payment than just typical financing, equipment or truck leasing requires down payment with some specified balloon payment that the lessee must pay to own the truck at the end of the term or simply return and lease another one which will start the cycle again including additional down payment or capital outlay.
The right dump truck for you?
Either way, no matter what type of financing, some dump trucks retains its resale value thus allowing you to benefit for having ownership and ownership that you can use to trade-in older ones you have in your fleet to minimize capital outlay and reduce capital to be financed and taxed. Most trade-ins are non-taxable.
Whatever your needs are, there is a huge choice of dump trucks available to meet them your business needs, and with a variety of lenders and leasing options, there is just as much choice for finance as well. Before buying any dump truck, it is important to establish how it will be used, as this not only determines the best truck to buy, but also shows which is the best finance option too. Not only utilization, but how long will this truck sit when the job is done or will this be used throughout from one project to another.
Renting might be beneficial if the work is short but having lower monthly payment could outweigh the rental cost. Buying used can have advantages as well as disadvantages in owning a dump truck. It’s your job to do your homework before investing in suck heavy and expensive assets that not only cost to buy but cost to operate from additional insurance, driver and other liabilities that involved in operating a heavy machinery. Consider your options not just from the asset itself but from the financing and the type of options you’d like to take on when purchasing a new dump truck.