Being a truck enthusiast, you might be fancying the idea of owning one of these versatile vehicles. However, purchasing a new truck involves significant expenses. Well, you already know the mounting prices of sophisticated pickup trucks in the US. Still, you have ways around managing these expenses without financially stressing yourself.
Whether you go for long-term financing for your vehicle, take loans, or take up a secondary job, you have plenty of ways to finance a new truck. Let’s explore the various ways through which you can afford a new truck.
How to afford a new truck: Diesel or Petrol
Financing the vehicle
With a good credit score, it’s logical to approach credit unions, commercial banks, and financing companies. With loan terms as long as ten years, you would have manageable monthly installments. However, opting for a longer tenure would ultimately involve massive compound interest.
A calculated approach will help you decide the tenure, depending on your monthly income. Making a hefty down payment can significantly reduce the installments. Be prepared to shell out around $715 as the average financing price per month for a new truck.
Since dealership financing involves higher interest rates and additional charges, this should be your last resort.
Get a loan from your acquaintances
In case a poor credit score happens to be an issue, you might reach out to your acquaintances, particularly relatives or friends for a loan. This option would be the most feasible one, provided you make them timely payments.
It also makes sense to reach out to someone who can spare money to help you with a larger down payment. A sizable down payment will also slash the interest rate.
Get it on lease
Currently, around 30% of new vehicle owners get them on lease. Although leasing is not too common for trucks, like SUVs, an increasing number of owners are choosing this method.
With a lease, you can get a new truck at less than $715 a month (installment for financing). With leases, you can get it at around $430 a month.
One of the strategic benefits of leasing the vehicle is that price drops or depreciation won’t bother you. Simply make the payments as per the schedule and follow up the maintenance schedule for repairs.
Truck owners can also breathe easy when they lease the vehicle, as they won’t have to fork out the massive down payment. Once you start using the truck, simply take time over the years to arrange adequate funds to purchase it.
Use the truck for your business
Whether you opt for financing or leasing, using the truck for your business will help you earn an adequate amount to manage the monthly payments. Many drivers buy these trucks by utilizing them in their business.
Using your truck primarily for commercial purposes will enable you to claim the vehicle as a business expense. Since trucks are eligible to become transportation equipment, one can get a complete bonus depreciation benefit in the first year. This implies that you can deduct the vehicle’s overall price from your business profits.
Bank on special discounts and offers
Dealers often roll out alluring offers and discounts on new trucks. Try to bank on these special offers to help you curtail costs. After all, dealers offer special discounts as they benefit from warranty and vehicle financing. Even after-sales services fetch them good margins.
Paying the entire amount in cash often enables truck owners to make the most of the discounts. Besides, the manufacturer also offers good deals from time to time. With adequate knowledge on the manufacturer’s discount, components, and pricing, affording the truck would be easier.
Go for an affordable truck
While luxury pickup trucks can be too hot to purchase, you still have several affordable options. There are several pickup trucks to choose from in terms of customer satisfaction and reliability rating. The Toyota Tacoma, for instance, comes at around $25,630. Overlooking the expensive models like the Ford F-450, it would be wise to settle with something less than $30,000.
Whether you decide to finance or lease the truck, the monthly installments would be lower. For instance, you can get a Ram 1500 Classic or a Ford Ranger under $30,000. Even the Chevrolet Colorado, GMC Canyon, or the Nissan Frontier comes in the $25,000-$30,000 range.
Refinance your existing truck
If you currently own a truck, how about refinancing the vehicle to purchase a new one? Although you can cover the markup rate up, you get breathing time to manage the expenses. Particularly, if managing the installments turn out to be challenging, refinancing the old truck remains an option.
With lower monthly installments and better rates of interest, you can ease up the financial burden. However, your eligibility depends on the condition of your existing truck, credit score, and loan amount.
Come up with a savings plan after considering your financial priorities. Many people manage to save adequately per month to acquire sufficient money to purchase new trucks. Alternatively, you need to arrange the down payment at least.
Once you get a price estimate, it would be convenient for you to come up with a monthly savings plan. Accordingly, you can put the amount aside from your income and purchase the truck. Also, consider the expenses you need to bear for maintenance and fuel.
How do you know if you can afford a new truck?
Firstly, evaluate your purchasing power to determine whether or not you can afford a new truck. The equation must involve your current income, and the associated costs for leasing, financing, and paying out cash. In case you want to settle with monthly installments, factor the cost in along with other household expenses. Now deduct the cost from your income and figure out whether you have adequate savings at your disposal to manage emergencies.
You already know how much you need to shell out while you get the truck financed or on lease. Now consider whether you can consistently pay the installment for the next five to ten years, depending on the loan tenure. This amount would vary, depending on how much the pickup truck would cost. This way, you can easily decide whether or not you can afford a new truck.
What is the cheapest month to buy a truck?
October happens to be the cheapest month to purchase a pickup truck. The dealerships try to have new cars on board as the year-end approaches. They try to get rid of the existing vehicles, which enable buyers to negotiate prices up to 8%. Hence, October would be the right time for owners to purchase small cars and pickup trucks.
For good discounts, check out the prices between May and September as well. However, avoid purchasing new pickup trucks between January and April. Particularly, the discounts are as low as 5.7% in February.
What is a good down payment for a pickup truck?
Shelling out a large down payment would significantly lower your monthly installments and interest rate. As a thumb rule, new truck owners should make at least 20% down payment for the vehicle. Remember, these vehicles depreciate rapidly. So, making a paltry down payment means you would owe a larger amount on the loan than what your pickup truck is actually worth. Again, unfortunate incidents such as accidents might result in the truck getting totaled. In these cases, you would be at a complete loss.
So, try to pay more than 20% of the value of the pickup truck as a down payment.
Are new trucks worth It?
If you can manage the cost, purchasing a new pickup truck would be an intelligible decision. Besides, the owners reserve the liberty to select the desired specifications. For instance, you can pick a truck with a unique color, or opt for leather seats rather than cloth ones.
Rather than settling for a used vehicle, purchasing a new one involves certain strategic advantages. When you go for a used one, you never get to know how intensely the previous owner cared for the vehicle. Purchasing a new vehicle would eliminate these hassles.
However, if you’re financially not confident to afford a new truck and maintain it, purchasing one wouldn’t be wise. Besides, you need to consider the price depreciation if you use it excessively. For instance, a Ford F-150 loses $14,349 of its value in just one year after you purchase it for $50,154! This is as much as a 28% value deduction. Therefore, if you are low on budget, purchasing a used truck makes sense.
Should you buy a used truck or a new truck?
Considering the strategic benefits of purchasing a new truck, it makes sense to go for the same. You will benefit from the warranty. In case of any glitch, you won’t be forking out the repair or replacement expenses from your pocket. Moreover, you will acquire the vehicle in perfect operational condition, as the manufacturers want you to. Purchasing a used vehicle involves the risk of undetected technical issues.
New trucks have a clear edge over their used counterparts, prioritizing reliability and performance. Moreover, you have other advantages like integrating the newest technologies in new trucks. This would deliver you better mileage and performance. Most importantly, new pickup trucks come with uncompromised safety features & keep you or your family secure when they take a ride.
Well, it’s natural to wonder how so many middle-class families are owning pickup trucks for commercial purposes or personal use. Now you know how you too can purchase one of these new vehicles. While purchasing a used truck remains an option, it’s not as trustable as purchasing a brand-new one. Once you weigh your purchasing capacity and maintenance costs, you can easily afford a new one!
Scan through the latest models and pricing to get an idea of the down payment, if necessary. Leasing continues to be the best way out, considering the seamless cost-management.