Get the best truck finance for your business and personal needs
Getting a truck can take care of all the heavy lifting and keep your business rolling forward. These heavy machines don’t always come cheap whether you want to start your business or you’re looking for the next addition to your vehicle fleet. If you need extra funds when you go shopping for any type of heavy vehicle, then truck finance might be your best answer.
How does truck finance work?
Truck finance involves getting a loan to buy a heavy vehicle. That means you can own the truck, drive it, and use it for your business without paying the full price. Instead, once you take out the loan, you pay for the truck in small instalments usually every month. You can choose the repayment period and the size of your monthly payments.
What types of trucks can you finance?
With truck finance, you can purchase a used or new vehicle of the following types:
- Trailers
- Delivery van
- Tow trucks
- Flatbed trucks
- Construction equipment
- Refrigerated trucks
- Other types of heavy vehicles
Which types of loans are available for truck finance?
There are many options available, whether you’re searching for truck finance in Gauteng, Eastern Cape, or any place in South Africa. The same also applies if you’re looking for dump truck financing or equipment financing. Here are your financing program options:
Instalment sales agreement
The lender pays the full cost of the truck, and you get to use the truck immediately. However, ownership of the truck is only transferred to you after you have made all the payments, including interest. The truck, therefore, serves as security for the loan.
Financial lease
The lender buys the truck, and you rent it from them. This rental agreement is for a specific period during which you make monthly payments to the lender. These monthly payments usually must add up to the full cost of the truck before you can own it. At the end of the rental period, you can return the truck, renew the contract, or pay the remaining amount to buy the truck.
Operational lease
In this case, the lender rents the truck to you, and you can use it for a time specified in the contract. You also make monthly payments to the lender, but they typically don’t add up to the full cost of the truck. After the contract ends, you won’t have the option to buy the truck, and the truck is expected to have residual value so that the lender can still profit by selling it. However, you can always renew the lease. You can also get truck maintenance as part of the financial service.
Commercial hire-purchase
You hire the truck from the lender, and you make fixed monthly payments for an agreed period. That means the lender owns the truck, but when the loan contract is over, and you have made all the necessary payments, you become the full owner of the truck.
Personal loan
This general-purpose loan can be used to buy a truck for your business. You’ll also be able to use the truck for personal errands if you choose. However, most personal loans are unsecured and might, therefore, have higher interest rates compared to other truck finance options.
How to compare your truck finance options
With so many truck finance options available, looking at the following factors can help you choose the best option for your situation:
- Interest rate: This is what the truck finance company charges you for the loan. You can choose a variable or fixed rate, but it’s always better to aim for a low interest loan.
- Repayment plan: Find out how much you’ll pay per instalment and how flexible these repayments will be. For example, can you make additional or early repayments? Is the repayment amount suitable for you?
- Truck fleet options: If you’re looking to buy more than one truck, check whether the lender will be able to provide fleet financing. Be sure to fully understand what the loan contract requires from you.
- Deposit/Balloon payment: Are you willing to pay a lump sum of money at the beginning (deposit) or end (balloon payment) of the loan contract? On the other hand, you might be searching for truck finance with no deposit in South Africa.
- Loan term: Find out how long the loan contract will last. While longer loan contracts have smaller monthly payments, you’ll have to pay more in interest. To reduce the total cost of your truck loan, and if you can afford it, choose a shorter loan contract.
- The total cost of the loan: Understand all the upfront and monthly charges you’ll have to pay, besides interest. That way, you’ll be able to calculate the total cost of the loan and see if you can afford it.
Use the truck finance loan calculator for your estimated monthly payments
Looking at the estimated monthly payments for your truck loan is also a good way to compare finance options. CompareLoans.co.za offers the truck finance loan repayment calculator as a free tool that shows the expected payment per month for each loan. Just enter your loan amount and term, click “Calculate Repayment” and the results will be made available.
Truck finance requirements
General requirements when applying for truck finance in South Africa are as follows:
- Permanently employed;
- 18 years and older;
- South African or International driving licence;
- Proof of income;
- South African ID/citizenship; and
- A good credit score.
How to apply for truck finance online
More specific requirements depend on the lender. If you check our comparison tables, we have featured vehicle finance options. After you have chosen your lender, you can start the application process via this page by clicking the “Go to Site” button. Once you have visited the lender’s website, you can start your online application by providing the lender with your personal information and documents.
Tips for choosing the right truck
There is a wide variety of useful heavy vehicles in South Africa, but you must choose the best type for your needs. Your choice, therefore, depends on the following:
- Reliability – Quality is a top priority. Choose a truck from a reliable brand that can give you value for your money over the period you use it. Avoid vehicles that might need a lot of servicing and maintenance.
- Capability – If you have heavy-duty needs, then you also need a heavy-duty truck.
- Features – Make sure the truck has the right features for the functions you want. Also, features that increase safety and ease-of-use are crucial. Think blind-spot monitoring and power steering.
Mistakes to avoid when choosing the best truck finance
- Choosing a truck finance option you can’t afford will make it difficult to pay the loan back. Use the truck finance calculator to figure out which monthly payments are affordable to you.
- Buying a truck without doing proper research means you can end up making a poor choice. Make sure the truck will perform enough for your needs and that it’s not expensive to maintain.
- Choosing the wrong truck loan means you’ll be stuck in an agreement that might not work for you. Compare truck financing companies using the factors outlined earlier for best results.
What are the advantages of truck finance?
- You can choose a personalised truck loan that allows you to get the type of heavy vehicle you want. For example, when buying a dump truck check for dump truck loan offers.
- Flexible repayment terms that suit your personal or business cash flow.
- You get the full benefits of using the truck without paying the full cash price at once.
- There might be tax benefits for your trucking company.
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