Personal loan or small business loan for new truck?

A place to discuss anything... except credit cards!
2 posts
s.jessica
Centurion Member
Centurion Member
 
Posts: 125
Joined: Wed Dec 05, 2012 12:47 pm
Location: Iowa

Personal loan or small business loan for new truck?

Postby s.jessica » Thu Jul 10, 2014 5:25 pm

I am looking at purchasing a new truck something around the size of a Ford F250 or Dodge Ram 2500. There's also something I've been looking at since my current job is kind of a dead end and I'm looking for something different. I have a friend who picks up cars with a flatbed trailer and delivers them. As I understand I don't need a CDL to pull a trailer hauling a single car, but the dispatcher he works through requires a registered business name, DOT number, commercial liability insurance and EIN. The way it works is maybe a small town used car dealer purchases a single car via an online auto auction, they would then contact the dispatcher for someone to haul the vehicle from say the auction in Kansas City, KS to their lot in South Dakota and would say what they are paying. Once the dealer purchases the vehicle they need to have it picked up quickly to avoid paying storage fees so they are happy to pay nicely to have someone pick it up and deliver it. In most cases they pay cash when the vehicle is unloaded. While I'm on the road, the dispatcher is looking for pick ups close to my delivery point and I can accept or decline depending on how much they pay and where the load is going. They try to have you back home for several days every other week for sure. The best part is I'm under no obligation to accept any loads from them and I can also find loads on my own.

On the flip side, the camper delivery business is booming and they are looking for people to pull new campers from the manufacturer to the dealer. This pays $1.25 a mile to start, but you go back empty. They lease your truck, I'm not sure how that all works but you operate under their business name and liability insurance. In this case you do need a CDL I think because the camper is heavier than a car trailer but I'm not sure what class. I know I'm not going to take a truck driving course and drive some big rig just to deliver campers.

My big question is the best way to apply for financing. All I would really need for right now is the truck, I don't pay employees or carry inventory. I've had people tell me I need to start the business first then present the bank with my business plan and take a small business loan. On the other hand I've seen loans advertised regardless of credit. Mostly I would just need a couple of pay stubs to verify my present employment. I'm just almost certain that a bank would tell me I don't need a Ram 2500 to drive to work.

I guess my big thing now is do I apply for a personal car loan or a business loan? Also do I need to register the truck in the business name? I never get to go anywhere so I thought if I could do some travelling and get paid to pick up loads on the way it could be just what I need.


rockyrock
Centurion Member
Centurion Member
 
Posts: 803
Joined: Thu Mar 21, 2013 6:06 am
Location: Ventura, CA

Postby rockyrock » Fri Jul 11, 2014 8:48 am

s.jessica wrote:
I'm just almost certain that a bank would tell me I don't need a Ram 2500 to drive to work.

I guess my big thing now is do I apply for a personal car loan or a business loan? Also do I need to register the truck in the business name? I never get to go anywhere so I thought if I could do some travelling and get paid to pick up loads on the way it could be just what I need.


This is way more complicated then I can fully go into right now but I'll share a few basics. First off >90% of the folks driving SuperDuty/Heavy Duty pickups have no reason to other than they like them. Banks don't care what you buy as long as you can pay them back. Most lenders will approve you for a loan amount and APR based on your credit worthiness and income. If those are sufficient they could care less what vehicle you purchase. If your credit score and/or income are on the lower end of the scale they might take a small interest in the vehicle but again it will be more in the direction of why are you looking to buy a $40k vehicle when your income is only $XXk per year.

The second part is even trickier but can save you a lot of money if you do it right. You definitely want the truck in the business name so you can write off most or all of the expenses to reduce your tax liability. Gas, tires, insurance, maint, even some or all of the payment depending on how you use it. The best part is you don't even have to be profitable the first few years to take advantage of this.

There really is much more to it so I would dig around. Your best bet is to find a savvy small business owner (or two) in your town. He or she will be able to give you the ins and outs better. A solid accountant is also helpful but can be costly so start with the small business owner.

Good luck!
American Express (2005): Premier Rewards Gold & Blue Cash Preferred
Chase: Freedom & UA Club USAA: Signature Visa & American Express
Discover it Bank of Hawaii Hawaiian Airlines WEMC Synchrony Sam's MC
Navy FCU Platinum Visa Citi Double Cash & AT&T Access MC



Return to “The Lounge”

Who is online

Users browsing this forum: No registered users and 0 guests