| In today's economy, start up and seasoned businesses | | | | return the item in lieu of exercising the buyout option. A |
| have an unique opportunity to acquire an attractive | | | | repossession is different than an off lease because it |
| financing deal for semi trucks, big rigs and over the | | | | has arisen due to a default of the lessee for non |
| road, tractor trailer and sleeper cab trucks. | | | | payment terms or a violation of the terms of the lease. |
| The first option, for the buyer, is to visit their local | | | | Either way, the lender has taken these trucks back |
| dealer and find his truck there. This is great place to | | | | and/and now must recondition these trucks and either |
| start and obtain pertinent information that will be used | | | | sell these trucks or re-lease them. |
| later in the data gathering process. From there, it is | | | | The lender can either advertise their off lease and |
| recommended searching the internet and its mass | | | | repo inventories through their internal sales force, trade |
| volume of data that is available. The potential buyer | | | | journals such as truck paper, truck trader etc or utilize |
| can visit such sites as truck paper and truck trader etc | | | | outside professionals such as brokers to move their |
| to view thousands of listings of trucks available across | | | | inventories as quick as possible. Sometimes, as these |
| the United States. He is able to sort and sift through | | | | inventories either sit or whatever reasons aren't |
| this vast data and should be able to find a truck, in any | | | | moving, the lender will put these items up for auction. |
| city and/or state across the U.S, that meets his | | | | At the present time, the lenders have two different |
| acquisition requirements. | | | | types of financing portfolios to consider and must act |
| Once he has located a source of semi trucks available | | | | accordingly. Normal lending on new business deals still |
| to him, he is able to contact these sellers and negotiate | | | | require stringent lending practices based upon the |
| a deal that might be able to meet his needs. Once he | | | | credit markets and the risk/reward factors lenders |
| is agreed to a price and its particulars, his next hurdle is | | | | perceive out there in the financial markets. The second |
| to find adequate financing in today's complex lending | | | | type of portfolio, for the off lease and repos, require |
| world of this commodity. | | | | possibility a more lenient approach to liquidating their |
| Today, the semi truck, sleeper cab, over the road truck | | | | inventories prudently and recreating the income stream |
| financing arena has become much smaller. Lenders, in | | | | for the lenders. This will be discussed below. |
| the past, that use to finance this niche market have | | | | Today, some of the lenders in the financial market |
| either pulled their portfolio funds out of this area or | | | | have advertised personal credit qualifications as low |
| have modified its' lending requirements. It is not unheard | | | | as 500, prior bankruptcy rules amended or ignored, and |
| of today that a start up business must commit to a | | | | start up businesses welcome. Additionally, the front |
| down payment of between 10% - 30% of the | | | | money to commence a lease can start as low as first |
| acquisition cost of the truck to enter this market. | | | | payment only to whatever you might able to agree |
| The seasoned business with good credit might be | | | | upon. T |
| able to get in as little as one payment down plus | | | | The buyout clauses on these over the road trucks |
| documents fees but must have either A or B Credit. | | | | can range from a $1.00 buyout to 10% to 20%, Trac |
| Other seasoned businesses that don't meet these | | | | leases to possible fair market value buyouts. One |
| credit requirements, may be required to put up 10-30% | | | | should understand these clauses because they have |
| down or either put up additional collateral as their credit | | | | an impact on the passing of title. |
| scores fall below 600. | | | | These favorable financial arrangements by the |
| Most buyers don't enjoy these tightening financial | | | | lender has stimulated the buyers wants and needs to |
| requirements, are locked out of this market, and will | | | | either enter the trucking industry as an owner operator |
| start looking for alternatives that are available due to | | | | and/or possibility an expansion of a existing business. |
| market conditions. In addition to the market | | | | First Time buyers, whom were locked out of this |
| requirements of substantial monies due upfront, the | | | | market in the past, now has an unique opportunity to |
| conventional lender has modified his risk/reward factor | | | | earn more revenue by acquiring a truck for himself. |
| for the failure and possible repossession of these | | | | . |
| trucks. Therefore, the rate and/or interest factor that | | | | Other lenders that might have required up to 30% |
| the lender charges has gone up making it a bigger | | | | down in the past might accept as little as 3% down |
| challenge to complete the financing end once the want | | | | to acquire one of their repos and/or off |
| to be buyer locates his acquisition.... | | | | leases.....Additionally, some lenders may offer favorable |
| As the economy has weakened due to market | | | | monthly payment terms vs standard lending to acquire |
| conditions, conventional financing has changed as we | | | | their off lease and repos vs. the buyer looking to |
| know it. The lender has acquired another problem that | | | | acquire a truck at a dealership.. |
| makes their equation a little more complicated. In the | | | | For this article, potential deals for over the road trucks, |
| past year as the price of food has gone up, the real | | | | semi trucks and big rigs for the customers relate to |
| estate markets have taken a toll for the worse and | | | | the following manufacturers: Petebilt, Mack, Kenworth, |
| other world factors have caused the banks to be | | | | International, Freightliner, and Volvo. |
| more unstable, the trucking industry has become more | | | | In conclusion, this is a buyer's market for semi trucks, |
| volatile. As the increase of defaults on the payments | | | | big rigs and over the road trucks, sleeper cabs, tractor |
| of over the road trucks, semis etc have risen to all | | | | trailers etc. One should evaluate all the factors relating |
| time levels, the lenders have been taking back these | | | | to this acquisition including gas costs, air emissions, |
| trucks by the droves that are earmarked as | | | | environmental type requirements., buyout clauses |
| repossessions. | | | | acquisition costs and its related financing. |
| This has caused a problem with normal lending | | | | Additionally, there are two distinct financing markets |
| practices and trying to balance it with a non producing | | | | out there, one for the normal acquisition from the |
| income portfolio. If these lenders don't act swiftly and | | | | dealership and the possibility of acquiring a repo and |
| prudently, the combination of these two type of | | | | off lease from a lender at favorable market and |
| portfolios can be devastating to the lenders' bottom | | | | financing terms. As always it is advisable, if possible, to |
| line. A third factor to consider is the off lease truck. | | | | locate financing prior to truck shopping, it could save a |
| These trucks are being returned to the lender and | | | | lot of time and stress. |
| they must act accordingly with this third factor. | | | | Happy hunting for your semi truck, big rig truck, over |
| By definition, an off lease semi truck, over the road | | | | the road truck, sleeper cab acquisition and its related |
| truck, big rig etc has been returned to the lender as the | | | | financing... |
| lease has expired. The lessee has made a decision to | | | | |