If you’re thinking of moving into trucking or buying your next truck, we have a slew of tips to help you make the right decision and avoid some of the most common pitfalls.
Determining your use case
Your company may depend on a truck in some ways, or it may be an integral component of it. You need a plan, just like any other company.
A curtain-sider is the best option if you're transporting items in cans or bottles.
If you're a removalist, a two-axle rigid with a hydraulic tail lift would be more appropriate. The range of vehicles you can purchase is limited if the truck you need serves a single purpose.
It helps you apply for loans more easily and might even be less expensive if you have a plan for both your truck and how it will produce money. A budget should include both the money coming in and the money going out.
Going green? Here’s what to consider
Trucks that are aerodynamic, have low tare weight, and better fuel economy to add value to your bottom line.
However, green trucks are becoming more and more affordable as the government adds incentives to buying green trucks and improves the infrastructure for electric and hydrogen vehicles in the future.
The State Revenue Office of Victoria outlines what kind of concessions you can take advantage of if you’re a primary producer or if you purchase a green vehicle.
Financing the right way
Because your truck will be used to generate profit, you need to consider commercial truck finance options.
You can finance your truck in a variety of ways to ensure optimal profitability. You have a choice between purchasing your truck outright and leasing it.
Hire purchases and chattel mortgages are the two most popular types of financing.
These are accessible to registered firms and function in the same way. You can recoup GST, interest, and depreciation for both products.
You can also finance the entire truck without making a down payment, or you can borrow more to pay the up-front expenditures, so your purchase won't affect your cash flow.
The major distinction between a chattel mortgage and a hire buy is ownership; under a chattel mortgage, your company immediately acquires ownership, whereas in a hire purchase, the truck belongs to your lender. It doesn’t affect how you use the truck day to day.
Buying second hand – what you need to know
If you are going to buy second hand, you should look for a truck that’s as new as possible.
They will have cheaper upfront costs but may cost more in repairs and maintenance as time goes on.
Although older trucks are less expensive, you will always pay more for servicing, repairs, and maintenance.
Your engine may require a thorough overhaul sooner rather than later because older vehicle parts may be more difficult to find.
You’ll also need to check your truck’s VIN against the Personal Properties Security Register and inspect the logbook and truck itself for wear and tear.
If you’re unsure about what steps to take when buying a second-hand truck, the Truck Buyer’s Guide by the Australian Government can help you with a step-by-step process to follow.
The information here is general in nature and not a substitute for the directions of a financial adviser.
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