You’ve narrowed it down to two trucks.
Truck A is three years old.
It has 420,000 kilometres on it.
The asking price is:
$185,000.
Truck B is much newer.
Lower kilometres.
Newer technology.
The asking price is:
$275,000.
That’s a $90,000 difference.
So the used truck is obviously cheaper.
Isn’t it?
Not necessarily.
The purchase price is only one part of what the truck will cost your business.
For a transport operator around Rocklea looking at a new or used truck, the better question can be:
Which truck gives the business the better commercial result over the period we expect to own it?
That’s a very different question from:
Which truck has the lowest price?
Start With What the Truck Needs to Do
Before comparing prices, tell us why you’re buying.
Is this truck going to:
run interstate?
do local metropolitan deliveries?
pull heavy loads?
work five days a week?
work seven days a week?
replace another truck?
service a new contract?
be driven by you?
be driven by an employee?
The work matters.
A truck doing short local runs has a different operating life from one covering enormous distances every year.
Rocklea Transport Example
Imagine a Rocklea transport business has won additional distribution work.
The operator expects the truck to cover approximately:
180,000 kilometres per year.
They intend to keep it for five years.
They’re considering:
Truck A
Used
3 years old
420,000 kilometres
Purchase price:
$185,000
Truck B
Near-new
Very low kilometres
Purchase price:
$275,000
At first glance, Truck A saves:
$90,000.
But that’s where the analysis starts.
Not where it finishes.
What Will the Used Truck Look Like in Five Years?
Truck A already has:
420,000 kilometres.
Add:
180,000 kilometres × 5 years.
That’s another:
900,000 kilometres.
By the end of the planned ownership period, it could potentially have around:
1.32 million kilometres.
That doesn’t automatically make it a bad truck.
Plenty of commercial trucks work very high kilometres.
But maintenance, downtime, resale value and expected useful life need consideration.
Now Look at the Newer Truck
Truck B begins with very low kilometres.
After five years of similar work, it may have around:
900,000 kilometres.
Again, that’s substantial.
But the two trucks could be at very different points in their operating lives when the business is ready to replace them.
That can affect resale and replacement decisions.
Purchase Price Is Easy to See
This is why businesses often focus on it.
You can see:
$185,000
versus
$275,000.
The difference is obvious.
What you can’t see as easily are the next five years of:
repairs,
maintenance,
downtime,
fuel consumption,
resale value,
and lost work.
Those numbers can be just as important.
The Used Truck May Still Win
Let’s be clear.
I’m not saying:
buy new.
A well-maintained used truck at the right price can potentially be an excellent commercial purchase.
Maybe Truck A has:
a complete service history,
excellent maintenance,
the right specification,
recent major work completed,
and a realistic price.
It might be exactly the right truck.
We just shouldn’t choose it solely because the purchase price is lower.
Ask for the Service History
If you’re considering a used truck, understand what you’re buying.
Look at:
service records,
major repairs,
engine work,
transmission work,
brakes,
suspension,
tyres,
and other relevant maintenance.
If you’re not qualified to assess the truck yourself, consider obtaining an appropriate mechanical inspection.
Finance approval doesn’t mean the truck is mechanically good.
Those are separate questions.
A Lender Isn’t Your Mechanic
This is important.
A lender agreeing to finance a truck does not mean:
“The lender thinks this truck is mechanically excellent.”
The lender is making a finance decision.
You are making the purchase decision.
Do your own due diligence.
Kilometres Don’t Tell the Entire Story Either
A truck with 700,000 kilometres and excellent maintenance may potentially be a better purchase than another truck with 450,000 kilometres that has been poorly maintained.
Consider:
how it was used,
where it operated,
maintenance history,
and condition.
The odometer is one piece of information.
What About Warranty?
A newer truck may potentially have manufacturer or dealer warranty coverage depending on the vehicle and transaction.
A used truck may have less protection or none.
That doesn’t automatically justify paying $90,000 more.
But warranty can affect the financial risk of unexpected repairs.
Understand what is and isn’t covered.
Repairs Aren’t the Only Cost of a Breakdown
Imagine the used truck suffers a major failure.
Repair cost:
$18,000.
That’s painful.
But perhaps the truck is also off the road for ten days.
Now the business may lose:
revenue,
customer confidence,
or contract capacity.
Perhaps it needs to hire another truck.
The real cost can be substantially higher than the repair invoice.
Downtime Can Change the Decision
Suppose Truck A saves $90,000 upfront.
Over five years it has significantly more downtime than Truck B.
If every lost operating day costs the business substantial revenue, part of that initial saving disappears.
Again, that doesn’t mean the newer truck automatically wins.
It means downtime belongs in the comparison.
What if You Have Spare Trucks?
Now the calculation changes.
A fleet operator with:
15 trucks
and spare capacity
may be able to tolerate downtime differently from an owner-driver with one truck.
If an owner-driver’s truck stops, the revenue-producing asset may stop too.
Reliability can therefore have different value depending on the business.
Owner-Driver Example
You’re the driver.
You own one truck.
That truck produces your income.
A major mechanical failure doesn’t simply create a repair bill.
It can stop your revenue.
For an owner-driver, the commercial impact of reliability deserves particular attention.
Fleet Operator Example
Now imagine you operate 30 trucks.
You have workshop capability.
Parts arrangements.
Spare vehicles.
Experienced maintenance staff.
Buying used trucks may potentially fit your business model very well.
Same truck.
Different business.
Different decision.
What About Fuel?
A newer truck may potentially offer different fuel efficiency, depending on model, configuration and operating conditions.
Don’t assume the savings will be enormous.
Calculate them.
Suppose one truck saves:
3 litres per 100 kilometres.
At:
180,000 kilometres per year
that equals:
5,400 litres annually.
Multiply that by the expected diesel price.
Then multiply it across the ownership period.
Now fuel efficiency becomes a real number rather than a sales claim.
Specification Matters More Than “New”
The newer truck isn’t automatically better if it’s the wrong truck.
Maybe the used truck has:
the correct axle configuration,
better gearing,
the right sleeper,
appropriate towing capacity,
or equipment already fitted for the work.
The newer truck may require additional modifications.
Compare the truck you actually need.
Don’t Forget Fit-Out Costs
The purchase price may not be the final cost.
Perhaps the truck needs:
bullbar,
hydraulics,
PTO,
toolboxes,
communications equipment,
signage,
safety equipment,
body modifications,
or other fit-out.
Truck A may already have everything.
Truck B may need another:
$25,000
before it can start work.
Now the price gap changes.
Tell Us About the Complete Purchase
If you’re going to spend:
Truck: $240,000
Fit-out: $30,000
Additional equipment: $15,000
tell us at the beginning.
Don’t only say:
“The truck is $240,000.”
We need to understand the complete requirement and what parts may potentially be financeable.
What About GST?
Understand whether the advertised price includes GST and how the transaction is structured.
This becomes particularly important when comparing:
dealer purchases,
private sales,
and different advertised prices.
Don’t compare two trucks until you’re sure you’re comparing the actual acquisition cost.
Speak with your accountant or tax adviser about the tax treatment relevant to your business.
Finance Can Look Different on Older Trucks
The age of the truck can affect which lenders may consider the asset and the available finance term.
Suppose the cheaper truck is significantly older.
You may be expecting a long finance term.
But the lender may be comfortable with a shorter term.
Now the repayment difference between the two trucks may be smaller than you expected.
Don’t Compare Purchase Price Without Comparing Finance
Imagine:
Truck A costs $185,000
but the available term is shorter.
Truck B costs $275,000
but a longer term is available.
Truck A may still be cheaper overall.
But the monthly cashflow difference might not be anywhere near the $90,000 purchase-price difference suggests.
We need to look at the actual structure.
A Longer Term Isn’t Automatically Better
A lower monthly repayment looks attractive.
But extending the term can mean paying finance costs for longer.
It can also affect how much remains owing when you want to replace the truck.
Don’t simply choose:
the lowest repayment.
Consider the total structure.
Think About Replacement Value
Suppose you expect to sell the truck after four years.
What might it be worth?
Nobody can guarantee future resale value.
But thinking about the expected replacement cycle is still useful.
If you expect to change trucks regularly, the relationship between:
purchase price,
loan balance,
and future trade value
matters.
Negative Equity Can Make the Next Purchase Harder
Imagine four years from now.
The truck is worth:
$110,000.
But the finance payout is:
$145,000.
There’s a:
$35,000 shortfall.
Now that shortfall has to be dealt with when replacing the truck.
This is why today’s repayment shouldn’t be viewed in isolation.
What About a Balloon?
A balloon or residual may potentially reduce regular repayments.
But it leaves an amount outstanding at the end of the term.
That may fit a planned replacement strategy.
Or it may create a problem if the truck’s future value is substantially below the remaining balloon.
Understand the risk.
Don’t Set the Balloon Just to Reach a Repayment
This is important.
You say:
“I can only afford $4,000 per month.”
Someone increases the balloon until the repayment reaches $4,000.
Problem solved?
Not necessarily.
We’ve adjusted the timing of the debt.
We haven’t made it disappear.
The balloon needs to make sense in the overall structure.
Compare Total Cash Outflow
When comparing the trucks, consider:
deposit,
regular repayments,
balloon,
maintenance,
repairs,
fuel,
insurance,
fit-out,
downtime,
and expected resale.
You won’t predict every dollar perfectly.
You don’t need to.
Even approximate modelling can be much better than choosing based on sticker price.
What if the New Truck Is $150,000 More?
Now the decision becomes more significant.
Ask what you’re getting for the additional $150,000.
Lower operating cost?
More payload?
Better reliability?
Longer expected ownership?
Warranty?
Better resale?
Or simply:
it’s new?
The extra capital needs to do something for the business.
What if the Used Truck Is Half the Price?
Then used may be extremely attractive.
Especially if:
the truck is mechanically sound,
the specification is right,
the work doesn’t require enormous kilometres,
and the business can manage maintenance.
There is no universal answer.
What About a Demonstrator?
A demonstrator or near-new truck can sometimes sit between the two.
Lower acquisition cost than brand new.
Relatively low kilometres.
Potential warranty benefits depending on the vehicle.
Again, compare the complete transaction rather than the label.
What if the Truck Is Being Sold Privately?
As we covered in Wetherill Park, tell us.
A used private-sale truck can potentially require additional transaction checks.
Don’t choose a private-sale truck based solely on a cheaper price without considering:
finance,
inspection,
ownership,
existing security,
and settlement requirements.
What if It’s at Auction?
Same principle.
The apparent bargain only matters if:
the truck is suitable,
you can fund it,
and the complete acquisition cost still stacks up.
An auction bargain that needs $60,000 of immediate repairs isn’t necessarily a bargain.
Can I Finance a Used Truck With High Kilometres?
Potentially, depending on the lender, asset and applicant.
But don’t wait until after signing a contract to find out.
Send us:
year,
make,
model,
kilometres,
purchase price,
seller details,
and the intended use.
We can investigate the finance position around the actual truck.
What if I Want to Keep My Cash?
Tell us.
Perhaps Truck A is cheaper, but requires a larger contribution under the available finance structure.
Truck B may potentially have different finance options.
The decision isn’t simply:
which truck costs less?
It’s also:
what does each purchase do to the business’s cash position?
Cash After Settlement Matters
Let’s say the business has:
$120,000 cash.
Option A leaves:
$35,000.
Option B leaves:
$90,000.
That $55,000 difference may matter if customers take 45 days to pay.
This is exactly why our debtor-finance journey came before trucks.
Buying the asset is one thing.
Funding the business after buying it is another.
Don’t Put Yourself Into a Cashflow Crisis to Save Interest
Sometimes the owner wants to contribute as much cash as possible because:
“I hate paying interest.”
Fair enough.
But if that contribution leaves the business unable to fund:
fuel,
wages,
repairs,
and normal operating expenses,
the business may then need short-term working-capital finance.
That can defeat the purpose.
Consider the complete funding position.
What if I’m Replacing a Truck?
Then compare the new purchase with the truck you’re replacing.
What is the current truck costing?
Repairs?
Downtime?
Fuel?
Existing repayment?
What is its trade value?
What is the finance payout?
The replacement decision may look very different once all those numbers are visible.
What if I’m Adding a Truck?
Now we need to understand the additional revenue.
If the new truck costs:
$275,000
and creates:
$350,000 annual revenue,
that sounds strong.
But calculate the incremental profit after:
driver,
fuel,
maintenance,
finance,
insurance,
registration,
and other direct costs.
The truck needs to earn its place.
Rocklea Business Example
Imagine the Rocklea operator chooses Truck B.
It costs $90,000 more.
But after comparing:
expected maintenance,
fuel,
downtime,
finance structure,
ownership period,
and expected replacement value,
the business believes the additional investment makes commercial sense.
Fine.
Now imagine the numbers show Truck A can perform the same work reliably and the business has the maintenance capacity to manage it.
Then Truck A may be the smarter purchase.
The point isn’t:
new is better.
Or:
used is better.
The point is:
run the comparison.
Already Comparing Two Trucks?
Send Thrive Broking both advertisements.
Tell us:
which truck you prefer
how long you expect to keep it
how many kilometres you expect it to do
whether you’re replacing or expanding
how much cash you want to contribute
and
whether there’s a trade-in.
We can look at the finance implications of each purchase rather than discussing truck finance in the abstract.
You may discover the cheaper truck produces the better result.
You may discover the more expensive truck does.
The number on the windscreen tells you what it costs to buy the truck. It doesn’t tell you what the truck will cost your business to own and operate.