Here's Why You Should Finance a Semi Trailer

You can often get rock-bottom prices on semi trailers by paying cash, but even an inexpensive trailer costs more than most people can spend at once. Financing a semi trailer is similar to financing any other vehicle, and it enables you to pay for your trailer by putting it into service right away. Here are a few tips to help you get the best deal when you finance a trailer. If you have any other questions, visit Utility Trailer of Washington in Auburn, Mt. Vernon and Richland, Washington. We proudly serve truckers in both Washington and Alaska.

Make a Smart Buy

There’s nothing wrong with buying pre-owned, but you should find a truck that’s less than 10 years old with less than 700,000 miles on it. The vehicle will be collateral on the loan, and most lenders make their financing decisions partially on the condition of the vehicle. If it’s going to need frequent repairs, you will lose revenue while it’s being serviced. You don’t have to buy the most expensive rig on the market, but you need something that will be dependable and hold its value while you pay it off.

Review Your Credit Score

Your credit score is a numerical evaluation of your creditworthiness set by three independent credit bureaus. Good credit is important, but lenders are looking at other factors as well. If you have three or more years of experience as an owner/operator and an established revenue stream, lenders will generally consider you a lower risk. 

You will usually need a credit score of 660 or higher to secure financing, but many lenders will work with credit-challenged customers to find favorable rates. Financial institutions understand that many people have rough spots in their credit history and want to help you qualify. If your credit score is really low, you might require a cosigner.

Create an LLC or a Corporation

Your semi trailer is a business asset, and obtaining a commercial loan is a more detailed process than purchasing a personal vehicle. You should be prepared to make a down payment of at least 20% and expect to pay a higher interest rate. An established LLC status or corporation will make you a more qualified customer, and it will also protect your personal assets in the event of a business-related lawsuit.

Be sure to consult with an attorney to learn how to incorporate your business. You will also need to buy insurance for both your truck and your cargo, workers' compensation for you and your drivers and a general liability policy for the business.

To see our current inventory of trailers for sale, visit Utility Trailer of Washington in Auburn, Mt. Vernon and Richland, Washington. We also have mobile service locations in Alaska to serve you.