Used truck finance can be arranged directly through a bank or through a truck finance broker. The better option depends on the business, the truck being purchased, the documentation available and how closely the application fits the lender's criteria.
A bank assesses the application against its own commercial vehicle finance products and lending policy. A broker can compare lenders with different requirements around used truck age, kilometres, ABN history, low doc applications, private sales and credit profile.
The Asset Finance Shop (TAFS) is a specialised asset finance broker with access to more than 80 bank and non-bank lenders. TAFS uses an internal credit team to assess applications before making a formal lender submission.
For businesses buying a used truck, lender selection can be particularly important because the age, condition, purchase method and value of the vehicle can all affect which finance options are available.
This guide compares using a truck finance broker with applying directly for a bank truck loan when purchasing a used commercial vehicle in Australia.
Either can be suitable.
A bank can make sense for an established business with strong financials, a straightforward truck purchase and an existing banking relationship.
A truck finance broker can be useful when you want to compare multiple lenders or when the transaction involves factors such as:
The key difference is lender access.
When you apply directly to a bank, that bank assesses the transaction against its own credit and asset criteria.
When you use a broker, the application can be assessed across lenders with different requirements before the formal application is made.
|
Factor |
Bank Direct |
Truck Finance Broker |
|
Lenders considered |
One bank |
Multiple lenders |
|
Used truck criteria |
Bank's own policy |
Can compare different lender policies |
|
Older trucks |
Depends on bank requirements |
Can compare lenders that consider different vehicle ages |
|
Higher kilometres |
Depends on bank requirements |
Can compare options based on truck age, condition and value |
|
Private sales |
Depends on policy |
Available through selected lenders |
|
Auctions |
Depends on policy |
Available through selected lenders |
|
New ABNs |
Depends on bank criteria |
Can compare lenders that consider newer businesses |
|
Low doc finance |
Depends on bank |
Available through selected lenders |
|
Credit issues |
One credit policy |
Can compare lenders with different criteria |
|
Initial credit assessment |
Depends on provider |
TAFS starts with a soft credit check |
|
Application support |
Direct with bank |
Broker manages lender application |
|
Settlement support |
Managed by bank |
Broker coordinates lender, buyer and seller |
Neither option is automatically better.
The right choice depends on the business and the truck.
When you approach a bank directly, the bank assesses the truck finance application using its own lending criteria.
The bank may consider:
If the application meets the bank's requirements, the bank can provide a commercial vehicle loan or asset finance structure.
For an established business with strong financial information and a truck that fits the bank's asset criteria, applying directly can be straightforward.
The limitation is that you are assessing one lender's option.
If the bank is not comfortable with the truck's age, the business's documentation or another part of the transaction, you may need to look elsewhere.
A truck finance broker assesses the business and proposed truck purchase before determining which lenders may suit the transaction.
At TAFS, the assessment can include:
The internal credit team can then compare the application against suitable lender criteria.
TAFS has access to more than 80 lenders, including bank and non-bank options.
Once a suitable option has been selected, the formal application is made to that lender.
A new truck generally gives lenders a straightforward asset to assess.
Used trucks can vary significantly.
Two trucks with the same purchase price might have completely different lender options because of differences in:
Lenders can also have different maximum asset ages at the end of the finance term.
For example, one lender might be comfortable financing a particular used prime mover over five years while another may offer a shorter term because of the truck's age.
This is why used truck finance is not only about finding the lowest advertised interest rate.
The lender first needs to be comfortable financing the truck itself.
The lender assesses both the business and the vehicle.
The year of manufacture can affect:
Older does not automatically mean unfinanceable.
It may simply change which lenders and structures are available.
Kilometres help the lender understand how heavily the truck has already been used.
A higher-kilometre truck may still be financeable when its value and condition support the transaction.
The lender will consider whether the price appears reasonable for the asset.
A truck purchased materially above market value may require additional explanation or valuation.
The lender may consider:
Some transactions may require an inspection.
Established truck brands with a clear resale market can be easier for a lender to value.
Specialised vehicles can also be financed, but the lender may need additional information about the asset and its intended use.
The lender needs to understand what the truck will do.
This might include:
The truck should make sense for the work and expected business income.
It can be.
A bank may suit a business that has:
Even in that situation, it can still be worth comparing the complete finance structure.
Look at:
The bank rate is only one part of the decision.
A broker can be particularly useful when the used truck transaction needs more lender flexibility.
That may include:
Different lenders have different policies around vehicle age.
A broker can compare those criteria before deciding where the application should be submitted.
Higher kilometres do not automatically prevent truck finance.
The available options will depend on the vehicle, its condition, purchase price and lender.
Private-sale finance requires additional seller and vehicle checks.
Selected lenders are comfortable with these transactions.
Auction purchases often have short settlement timeframes.
Having the finance position assessed before bidding can help.
Selected lenders can consider newer businesses where the applicant has relevant industry experience and a clear source of work.
Selected lenders can assess commercial vehicle finance using alternative documentation instead of complete financial statements.
Lenders have different approaches to previous credit issues.
A broker can assess the circumstances before selecting a lender.
Yes. Older trucks can be financed through selected lenders.
The lender may assess:
The available finance term may become shorter as the truck gets older.
This matters because the term affects the repayment.
A shorter term means the principal is repaid faster, which can increase the regular payment.
When comparing an older truck with a newer one, consider both the purchase price and the finance structure.
No.
A lower purchase price can reduce the amount being borrowed, but the lender still needs to be comfortable with the truck as security.
For example, a very old prime mover might cost considerably less than a newer vehicle but have:
Buying used can be a strong commercial decision, but price should be considered alongside condition and remaining working life.
Before committing to a used truck, consider:
The cheapest truck on the day is not necessarily the lowest-cost truck to own.
Finance repayments should be considered alongside maintenance and operating costs.
Yes.
Used prime mover finance is available through selected lenders.
A lender may consider:
For an owner-operator, the lender may also want to understand the work source and how the truck will generate income.
Yes.
Used rigid trucks can be financed for purposes including:
The lender assesses the business and truck in the same way as other commercial vehicle finance applications.
The body type can also affect value and lender assessment.
Yes.
Used tipper finance can be available for:
The lender may consider both the truck and body.
The work available to the business can also support the application.
Yes.
Selected lenders finance used trucks purchased privately.
Private-sale truck finance can require additional checks compared with a dealer purchase.
These can include:
The aim is to confirm that the seller owns the truck and that the lender will receive suitable security over the asset.
TAFS can coordinate these requirements between the buyer, seller and lender.
Yes.
Selected lenders consider auction purchases.
Before bidding, it can help to complete an initial finance assessment.
This can give you an idea of:
Final approval will depend on the truck actually purchased.
When setting your bidding limit, also consider:
The hammer price is not always the complete cost of getting the truck on the road.
Potentially.
Selected lenders consider used truck finance for newer businesses.
Where trading history is limited, the lender may consider:
A used truck can reduce the amount a new owner-operator needs to borrow compared with purchasing new.
The lender will still want confidence that the vehicle is suitable for the work and that the business can manage both the repayment and operating expenses.
Yes.
Sole traders can apply for commercial vehicle finance.
The lender may assess:
Complete financial statements are not always required.
Selected low doc lenders can use alternative supporting information depending on the application.
Low doc truck finance allows eligible businesses to apply without always supplying complete financial statements and tax returns.
Instead, the lender may use:
Low doc does not mean no assessment.
The lender still needs to understand the business, income and proposed transaction.
Potentially.
Previous credit issues do not automatically rule out every lender.
The available options will depend on factors such as:
Different lenders can assess these circumstances differently.
TAFS reviews the credit position before making the formal lender submission. TAFS starts with a soft credit check and internal assessment before submitting one formal application to the selected lender.
Not through the TAFS process.
TAFS begins with a soft credit check and internal credit assessment.
The scenario is reviewed before the formal lender application is made.
Once the business selects a suitable option, the formal application is submitted to the chosen lender.
This is different from making separate applications to several lenders without knowing whether their policies suit the truck or business.
The main truck finance structure TAFS arranges is a chattel mortgage.
Under a chattel mortgage:
A balloon payment leaves an agreed amount until the end of the finance term.
This can reduce regular repayments but creates a larger final amount.
The business may be able to claim eligible GST, interest and depreciation amounts depending on its circumstances. Speak with your accountant regarding the tax treatment that applies.
Not every application requires a deposit.
The lender may consider:
A deposit can:
A trade-in may also provide equity toward the purchase.
Using a large deposit should still be considered against the amount of working capital the business needs after settlement.
Yes.
If you are replacing an existing truck, its trade-in value can potentially contribute toward the new purchase.
Where there is existing finance, the current facility may need to be paid out first.
For example:
Trade-in value: $70,000
Existing loan payout: $40,000
Potential remaining equity: $30,000
That remaining equity may contribute toward the replacement truck, subject to the final transaction.
The actual figures will depend on the dealer offer and existing finance balance.
The documents depend on the business and lender.
For an initial assessment, you may need:
Depending on the application, the lender may also request:
Once the truck has been selected, you may need:
You do not necessarily need the final truck invoice before beginning the initial finance assessment.
A dealer transaction is generally more straightforward because the dealer provides formal vehicle and sale information.
A bank can suit the purchase where:
A broker can still be useful where the buyer wants to compare:
A private sale can make lender selection more important because lenders have different approaches to these transactions.
The lender may need to verify:
A broker can identify lenders that consider private sales before the formal application is made.
The older the truck, the more important the lender's asset criteria can become.
A bank may still finance the truck if it falls within its policy.
A broker can compare lenders with different rules around:
The best lender for a three-year-old truck may not be the best lender for a fifteen-year-old truck.
When comparing truck financing, look at the entire structure.
Consider:
A lower monthly repayment does not automatically mean cheaper finance.
It may come from:
The right structure should make sense for both the truck and the business.
TAFS can arrange approvals in as little as 24 hours for straightforward applications once the required information is available.
Used truck applications can take longer when they involve:
Approval and settlement are also different stages.
A lender may approve the business quickly but still need to complete vehicle or seller checks before settlement.
TAFS reviews:
The initial assessment begins with a soft credit check that leaves no mark on the applicant's credit file.
The TAFS credit team assesses the application and identifies suitable lender options.
TAFS has access to more than 80 bank and non-bank lenders.
The application can be assessed based on:
Before proceeding, review:
The formal application is submitted to the selected lender.
TAFS coordinates the lender requirements and settlement with the dealer, private seller or other approved seller.
Ask:
Ask:
It depends on the business and truck.
A bank can suit an established business purchasing a used truck that fits the bank's criteria.
A truck finance broker can be useful when you want to compare several lenders or when the truck is older, purchased privately, bought at auction or requires a more tailored finance assessment.
A broker can compare lenders with different vehicle age and condition requirements.
This can provide more options than relying on one lender's asset policy.
Not necessarily.
The available rate and overall cost depend on the business, truck, finance term, deposit, balloon and lender.
Compare the complete finance structure rather than assuming one type of provider is always cheaper.
Yes.
Banks provide finance for eligible used commercial vehicles that meet their credit and asset requirements.
Yes.
TAFS can compare suitable lenders for used truck purchases. Truck age, kilometres, condition and market value will affect the available options.
Potentially.
Selected lenders finance older trucks, although the vehicle's age can affect the available lender, term and deposit.
Potentially.
Kilometres are one part of the vehicle assessment. The lender can also consider age, condition, purchase price and market value.
Yes.
Selected lenders provide private-sale truck finance. Additional seller, ownership and vehicle checks are generally required before settlement.
Yes.
Selected lenders consider auction purchases. Pre-approval may also be available before bidding.
Potentially.
Selected lenders consider newer businesses based on factors such as industry experience, expected work, bank statements, credit position and the truck being purchased.
Yes.
Sole traders can apply for commercial vehicle finance, including low doc options through selected lenders.
Not always.
Selected lenders provide low doc truck finance using alternative supporting information such as bank statements, ABN details, business activity and industry experience.
No.
TAFS begins with a soft credit check and internal assessment before making one formal application to the selected lender.
Straightforward applications can be approved in as little as 24 hours once the required information has been provided.
Private-sale transactions, older trucks, valuations and more complex applications can take longer.
Buying used can be a practical way to put the right truck into the business without taking on the cost of a brand-new vehicle.
The important part is finding finance that suits both the business and the truck.
TAFS can assess the vehicle age, kilometres, seller, ABN history, documentation and overall application before comparing suitable truck finance options through access to more than 80 lenders.
Contact The Asset Finance Shop or apply online at www.tafs.com.au.
The Asset Finance Shop (TAFS) is a commercial asset finance brokerage based in Sydney.
Information on this page is general in nature and doesn't take your personal circumstances into account. Speak to a TAFS broker for options tailored to your business, and to your accountant regarding tax treatment.