Can REIL Help Your Business Purchase a New Vehicle?
- August 27, 2019
- By Aidan Dwyer
Having a commercial vehicle is common in many industries. In some, it is an absolute necessity. Depending on the industry, commercial vehicles can be used for almost anything and everything. For example, transporting goods to a point of sale, moving equipment to aid in a job or project, or simply to transport people. No matter what you use a commercial vehicle for, there are a few things that all trucks have in common that consumers should be aware of.Â
What Most Trucks Have in Common
First off, there is the price factor. Commercial vehicles can be an expensive investment for your business. The most common commercial van on the road today is the Ford Transit. Currently, the MSRP for a ford transit is just under $25,000. However, the final price that you pay will most likely be much higher due to costs associated with specializing the vehicle to suit your needs.Â
Similarly, another popular commercial pickup truck on the market today is the Ford F-150. The MSRP for a new F-150 is right around $28,500. Nonetheless, this is most likely not going to be the final price you will pay either. If you are in the transportation business, new semi-trucks can be extremely expensive, ranging anywhere from $80,000 to $150,000. No matter what type of vehicle your business needs, it is going to be a very large investment that can quickly eat up the capital that your business has on hand.
The second factor that each commercial vehicle has in common is the depreciation value. On average, vehicles depreciate about 10% within the first month that they are bought.Â This is depending on how often you use the vehicle, which could be a lot more. This means that the new shiny truck that you just bought will only be worth a fraction of what you paid for it in a matter of months. Despite the obvious downside of depreciation, it may be necessary for your business to purchase vehicles because of the nature of the work that you do. Purchasing a new vehicle can be a very costly investment, however, there are a few financing options out there to ease the burden.
One option you might consider is equipment financing. Equipment financing allows you to purchase new equipment by putting up 50% of the purchase price. You can use equipment financing to place a lien against your companyâ€™s already owned trucks and transport.Â This enables business owners the ability to recoup up to 50% of the initial purchase price. Equipment financing generally has short terms. The terms typically lastÂ 8-18 months, and generally take about 2 weeks to fund. To qualify for equipment financing, you must have been in business for at least one year and have a credit score of at least 650.
Another option to consider is a Business Line of Credit. Letâ€™s say that you have recently purchased a new truck. The financing for the truck has left a large gap in your business’s monthly cash flow. Sometimes, unexpected expenses may come up that you are not necessarily prepared to pay for. A truck may break down, or the cost of gas may inflate. A line of credit is a flexible financing option that can help you to pay off these expenses as they come up. A line of credit works similar to a credit card in which you only pay off what you spend. This is perfect for business managers who know how to manage money well and don’t want to hurt their business as unexpected costs come up.
A REIL ConclusionÂ
A commercial vehicle is a tool of your trade just like any other piece of equipment that you use. Trucks are necessary to get jobs done. Yet you don’t want to let the purchase of a new commercial vehicle impact your bottom line. Here at REIL Capital, we are business owners just like you. We understand the importance of having a reliable commercial vehicle. We have custom-tailored financing options to help you get the vehicle you need. If you want to see how we can help you purchase your next vehicle, fill out our commitment free application today.Â Â