buying decison

[rwarrenh]

can anyone explain in plain english the pros & cons. of buying a unit thru a dealership or attaching it to a 2nd mortgage

Buying it through dealership-you don't make it-you can't pay?-dealership gets truck back-
Buying it through home equity loan-you don't make it-you can't pay?-you loose your house-

Neither is a good thing-both damage credit if you can't make it-
You decide-

[teacel]

I think if you do a second mortgage, you don't get the title till you pay the house off.

[Arky]

Actually, I know it is possible to do this with a personal vehicle, not sure, but I think it would be the same with the cmv.

What happens is your bank attaches the note to your home mortgage, using equity in your home as collateral. The vehicle loan is seperated in that you make a seperate payment on it and when it is paid for, you will get the title.

The advantage to this with personal vehicles is that the interest paid on the vehicle loan is tax deductible because it is attached to the home loan. Ask your banker or accountant for the details, I know it works, but don't know the specifics. This is not an advantage to the cmv since the interest would be deductible anyway. The only advantage I see for the cmv is that you can access the equity in your home to finance the cmv purchase.

Although this is possible, I agree with the others that it is not advisable to do this as you are risking your home. Also, if you incorporate or form an LLC to avoid potential liability, this ties your home into the corp. and would make it fair game in the even of a lawsuit.

[ROADRUNNER]

I wouldn't buy anything right now. The diesel price is sky high and business is very slow. :angry:

[Hillbilly]

This will open a can of worms, but you have hit on the 1 saving grace, of a good lease/purchase deal(of which there are VERY few), and that is the "walk away" clause. As mentioned, high fuel cost & erratic freight makes any equipment additions risky, but the extra cost of the lease/purchase is offset with the ability to just turn it in, if things get upside down on you. In a "good" lease/purchase, the payment will be 10 to 15% higher, and cost of puchase, at the end will be 10 to 15% higher, but you don't have it hanging over your head, if things go south, on you. At any rate, GOOD LUCK![/b]

[Jimbo]

Hillbilly and Roadrunner,

Don't think of this as a bad time to buy equipment, but rather a good time to hunt for "Bargains".

Someone who has had enough of this wild world of trucking, and truck ownership, would be more willing to give you a better price, especially when they have a lack of interested buyers because of the reasons you mention.

Those deals are not going to be easier to find, but they will be greater in number, giving you a higher chance of finding one.

Look what Lee Iacocca (Spelling?) did with Chrysler years ago. Everybody figured they were done for, but Lee saw a bargain priced company opp., and went for it. After a moderate amount of years, he sold what he had in the company, pocketing millions.

Always look for the positive chances in a negative situation.

[nitestar]

You may consider what I did.
I went to my bank and arranged a lease for my truck.
They bought it.
( I found the truck) and I leased it for a given amount of time for a fixed value on the truck.
My lease has no mileage penalty in it.
I have their name on the title and it is a hammer to use if someone gives you crap. No one can take what you don't own.
Second, when the original lease was due to expire I re-leased it for a lesser fixed amount. Works for me and ALL tax deductible.
This is the last time I will lease it. I will buy it for next to nothing when the current lease is up. probably for less than $1000.

As Jimbo said this may be a great time to look for bargins

Don't forget to do a business plan for you financial partner. This sometimes is all that is needed to swing the deal and of course a copy of the lease from the carrier you will be going with.
Their lawyers can and will let you know if you are looking down the barrel of failure.