Partnering with the right financing source, whether you are purchasing or leasing your assets, is as important as ensuring you are spec’ing your assets properly for their intended duty cycle and getting the lowest total cost of operation.
But how do you know which financing source is right for you? Surprisingly, the one with the lowest rates might not actually be your best bet.
Here are some things you should look for when evaluating financing sources for your next round of asset procurement.
1. Industry knowledge
Does the financing source understand the ins and outs of trucking? Are they keeping up with the latest technological developments? Can they assist with vehicle spec’ing? Are they familiar with the residual value implications of certain add-on items?
2. Understanding of your company’s business
Not only does your finance source need to understand the trucking industry, but they also need to understand the intricacies of your business. No two fleets are exactly alike and without fully understanding how your fleet operates, its strengths, its challenges, and its unique duty cycles, a potential lender may not put together the right program that will allow you to get the most out of your assets.
3. Longevity
How long has the company been financing commercial vehicles? You need someone that understands the cyclical nature of both the new and used truck markets and who will still be around during years of low build rates. You need a company committed to the trucking industry and will be there in good and bad times—and even the ugly times.
4. Flexible financing options
Does the potential financing source allow you to adjust asset life cycles either up or down based on changing market conditions? This can be a very important quality. Think about today’s environment where even if you wanted a new truck, you couldn’t get one because of material shortages delaying new vehicle production. If you could not extend the life cycle of an existing asset, would you have to turn away business?
5. Lifecycle analysis
There is a perfect time to replace each truck in your fleet. Can the potential lender help you figure out what that is so that you are operating assets at maximum efficiency and replacing them before they become inefficient?
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When determining who to partner with to finance your assets, make sure you know how various sources stack up against these five criteria. Taking the time to evaluate each financing source based on these five attributes will ensure you make the best financing decision.
Patrick Gaskins, senior vice president of Corcentric Fleet Solutions, oversees both sales and operations for Corcentric’s fleet offerings. Over the past 10 years, Gaskins has grown the fleet services area of Corcentric’s business by implementing a best-in-class asset management database and a data-driven approach to providing Corcentric clients with visibility into all areas of their fleet spend. He joined Corcentric in 2010, bringing over 30 years of experience as a financial services professional in the transportation industry. Gaskins leads a team of industry experts who work with a supply base of over 160 manufacturers to help the country’s largest fleets manage all aspects of their fleet operations and fleet-related spend.
Gakins earned his BBA in Finance from the University of Miami, FL, and his CTP certification from the National Private Truck Council.
