Your next truck: buy it outright or finance it?

Monday, 24 July 2017

Your next truck: buy it outright or finance it?

When deciding whether to buy or arrange finance for your next vehicle, the temptations of outright ownership are considerable: the truck is wholly yours end of story. But, to be completely realistic, it's just the beginning.

Firstly, an outright purchase can be a direct drain on your capital. Then there is the matter of depreciation: an immediate reduction in book value that can be considerable. Plus, of course the need for cash flow for maintenance, repairs and possible upgrades and add-ons to meet changing conditions and needs.

Considering the pros and cons

Certainly, when you buy outright, the vehicle is yours immediately without concern about repayments or interest and other charges. It also satisfies an inner preference for outright ownership of assets, whether business-related or personal. But there are several more important factors to consider before dipping into your business capital. 

First and foremost is the need to ensure enough money for the adequate cash flow needed to run your enterprise. This is especially critical for the typical smaller business. The bills come in thick and fast in a non-stop stream. You may also need cash reserves to invest in business efficiency and growth and to cover unexpected expenses. 

A common problem faced by many fleet owners who have purchased their vehicles outright is being hampered by lack of sufficient funds should they suddenly have to purchase another truck (or several) to meet increasing customer demands. Or to provide funds for other essential outgoings for rounding up new business to increase turnover and profits.

Finance as the preferred alternative

The right kind of finance, when specially tailored to your business needs, can offer a number of important benefits, typically the complete flexibility and freedom to ensure that day-to-day operating priorities are met without the hindrance of cash shortfalls.

There is no arguing that effective, well managed cash flow is a priority for any successful business. It makes life easier for all concerned, from management to drivers to support staff — and is especially critical for any enterprise in the early stages of growth and development.

Vehicle finance can remove the need to dip into capital and cash reserves — while acquiring your vehicle(s) immediately and putting them to income-producing work. At the same time, you may be able to structure your outgoings in a way that reduces their impact by spreading out payments on, say, a weekly, fortnightly or monthly basis, depending on your needs.

You will be able to select the term of your finance, the deposit you want to pay and fix the interest so you know exactly what your vehicle outgoings will be.

In most cases you may also be able to include other costs in your loan, such as on-roads, insurance, stamp duty, warranty and roadside assistance; other benefits include the freedom to make extra payments to reduce interest or loan term (conditions may apply) and possible tax deductibility of payments as a business expense (be sure to check with your tax consultant). 

How to choose the right finance

You need to be sure you are dealing with people who fully understand your industry, your priorities and can tailor finance solutions that meet your needs and grow your business. Which is precisely what the team at Hino Financial Services is all about.

Backed by the strength of Toyota Financial Services, Australia’s largest automotive financier, you’ll enjoy peace of mind plus the satisfaction of dealing with the people who understand Hino best. 

Whether you need to finance one vehicle or fifty, Hino Financial Services offers a range of flexible options to suit every business — such as a Hino Finance Leases, Hino Business Vehicle Loans or Hino Fleet Financing.

To discuss what finance options best suit your business, visit your nearest Hino dealer or call 1300 888 850.


Approved applicants only. Terms, conditions, fees and charges apply. A minimum loan term of 12 months applies. The maximum loan term will vary depending on the finance product selected and will be subject to Toyota Finance policy and procedure. You may be required to pay a deposit for capacity reasons. Additional interest charges will accrue if you select a balloon final payment option and early termination fees may apply if you elect to make additional repayments during the loan term. Hino Financial Services is a division of Toyota Finance Australia Limited ABN 48 002 435 181, AFSL and Australian Credit Licence 392536. 

The information on this website is of a general nature and for information only. Nothing on this website constitutes or should be considered to constitute legal, taxation or financial advice. Before making a decision about any of the products and services featured on this website, you should consult with your own independent legal, taxation and financial advisors, who can advise you about your personal circumstances.

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