Finance or buy out right...

Discussion in 'Trucks and Trailers' started by coolmc11, Dec 7, 2007.

  1. coolmc11

    coolmc11 LawnSite Member
    Posts: 18

    I have a question here. Just took out a loan for starting business. Need help on what to do for a truck. Have about a $370 a month Loan payment. Need a truck. I want to spend about $17000 for truck. Should i Finance or buy the truck out right..I dont know if i should take on another payment....thanks
  2. maintenanceguy

    maintenanceguy LawnSite Member
    from NJ
    Posts: 156

    Nobody can answer that for you. Your situation isn't like anyone else's.

    On the one hand, always buy outright if you can. It's better to pay $17K for a truck than $23K with interest and fees.

    On the other hand, if spending the money now will make you too cash poor to be able to survive the first year, financing may be the better option even though it's more expensive in the long run.
  3. tthomass

    tthomass LawnSite Gold Member
    from N. VA
    Posts: 3,497

    If you get the truck finance it all the way! What you do is limit your risk and overhead etc.

    Example......$500 monthly payment vs $20,000 at once for a truck. You keep the money in the bank for you to use for you. Make out on a job pretty good, got some extra jingle? Write a check to the bank and label it as payment towards the principle (reduces interest paid) or pay off the truck all together. Great time is now.....end of the year. If you still owed $10,000 and could afford it, I'd pay it off. You look less profitable and pay less taxes at the end of the year.

    *Also goes for checks. Hold them if you can and deposit then in January. Then you have a year to decide what to do with the money. I am a nice chunk from fall jobs coming in soon. I've made a few purchases and I look like one poor business owner.......come January my account will more than double. I plan to purchase property or another truck in 2008 and I can then spend the money there once again looking less profitable and avoiding taxes. Food for thought.
  4. lifetree

    lifetree LawnSite Fanatic
    Posts: 5,370

    This is the choice that it basically comes down to ... and like he said, only you can make that decision !!
  5. topsites

    topsites LawnSite Fanatic
    Posts: 21,653

    I always buy all my vehicles outright, I don't believe in loans.
    Either I can afford it, or I can't.

    For me one part is the insurance, a loan requires nothing short of Full Coverage.
    I carry minimum liability on all of mine.
    I probably save 4-500 a year right there.
    Then the payments, no matter how I look at it there's a cost to it, even at 0% this crap costs.

    No sir, I save it then buy it, more money in the bank for me.

    Other notes: A perfect driving record helps even more.

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