Car buying trip

The front end of my 1999 Mercury Grand Marquis started making some strange noises last week. A trip to my buddy the mechanic revealed about $1000 worth of repairs would be required. Hmm... I have a ten year old car with 125,000 miles on it... the auto industry is in crisis. I figured it might be a good time to go down to the local car dealer. I found a great little Ford Focus for $10,000. When I tried to buy the car, the salesman told me "they like to see 30% down". I asked what the interest rate was going to be. They had about three different people sit down with me and try to talk about payments. I insisted I wanted to know what the hell the interest rate was. Finally somebody told me what the interest rate was 10%. I walked out. One of the reasons why I have really good credit is because I try to avoid over-paying for stuff!

On my way home from the Ford dealer, I saw Toyota had 0% financing signs in the windows. I know I won't be able to get one of their cars for $10,000, but I'll get that back when I go to trade it in.

For those of you that are interested, I was offered $400 for my old Mercury!

US Bank: "No loans for owner operators."

Got a call from Therese at Capital West. She said that unless a company has five or more trucks in their fleet, they will not loan money to any long haul trucker. Doesn't matter if your credit score is perfect. Doesn't matter if you've always paid your loans on time. Doesn't matter if you have a contract to haul cars. She said that the underwriters at US Bank are concerned that if a loan goes south, anybody with fewer than five trucks will be hard to find in the event they need to repo the truck.

If you do have more than five trucks, here is what you should expect to provide for a loan of $200,000:

Two years tax returns.
Personal financial statement.
Proof of home ownership.
Last 3 month's bank statements.
At least 10,000 average balance in your main banking account.

I asked what sort of interest someone with a perfect truck payment history could expect, with five year's prior experience in the industry. She said around 11.8%, but that was on a lease deal.

The freeze in Florida.

Talked to a customer yesterday who said that the auction in Ocoee, Florida was laying off 80 workers. He said the auction's business was down 69%.

Truck Finance Update 3

Was up at Tec Equipment in Portland and spoke briefly with Duane Zeigel, one of the auto transport sales reps. He says he's getting some deals done through Volvo credit, and has been able to get financing for customers with FICO scores below 700.

Truck Finance Update Part 2

Just spoke with Benny Dean at North East Auto Truck Brokers. He's telling me guidelines from lenders are tightening up. If you've got a 670 FICO, then you might be able to get an 8.5% rate. If you've got less than perfect credit, you're looking at anywhere from 10-14%.

There is money out there available, but you're going to pay more for it.

I call B.S.

Nov. 7: Ford’s CEO Alan Mulally discusses his company’s financial report on CNBC. During the interview, he says that Ford has adjusted output to sales.

Nov. 6: I talked with someone at Hansen and Adkins in California who said that the main freight they're hauling these days is for Ford.... to new storage lots they're leasing for the Ford XLT Lariat Crew Cabs nobody is buying.

Truck Finance Update: Tougher, but Possible.

11/08/08 Update to the Update
If your business really demands additional equipment, you might want to check out the re-marketing departments of the major finance companies. One Cottrell dealer I spoke with recently told me that finance companies are dumping equipment on the market, possibly in hopes of taking part in a government bailout plan. A 2006 truck and trailer which would ordinarily sell for around $200,000 was recently sold for $116,000 by the finance company who had to repossess it. The truck had 300,000 miles on it! The guy who owned that truck before you probably didn't have the money to keep up with the maintenance on it either. You could buy a truck that has serious issues relating from deferred maintenance.

I was talking with Mark Mecklem at Boydstun the other day about truck finance issues in the current economic climate. Mark says that there is no doubt that conditions are more challenging, but they're still finding ways to get deals done.

He says that slower unit sales are not necessarily directly related to a financing slow-down. In many cases, it's simply a matter of a trucking company deciding to delay purchasing new equipment until they get enough business to justify the investment.

Mark says that some finance companies like GE Capital have tightened their lending guidelines and raised interest rates, but this isn't something that is industry-wide.

On the whole, what lenders are looking for is the following:

Decent FICO scores, not necessarily perfect. For people with less than perfect scores, loans are still. possible by cross-collaterizing the deal, i.e., lien against an existing asset like a truck.

Previous experience in the industry

A history of making truck payments on time

And even if all of this doesn't line up exactly, there are so-called "hard-money" lenders who will take a look at a deal and listen. If you've got the business to justify the investment, they just might be willing to make a loan. After all-- if they're not lending money, they're not making money.

Bottom line: if you really need a new truck and you've got the business to support the investment, don't sit on the sidelines thinking you can't buy a truck. The deals that need to get done will probably get done.

EZ Grip Car Hauler Strap w/ Swivel Hooks

New kind of ratchet wheel strap with double-sided tread grabbers. Features 5/8 inch diameter swivel J hooks for fast, secure operation.