You might be looking at a $160,000 cab chassis.
But you’re not actually buying a $160,000 working truck.
It still needs a body.
Maybe it needs a crane. Hydraulics. Toolboxes. A tipper body. Refrigeration. A hook-lift. A tray. Specialist equipment.
By the time the truck is ready to earn money, the real investment could be substantially higher than the price sitting on the truck dealer’s invoice.
For businesses in Wagga Wagga buying a truck that needs to be built or fitted for a particular job, this is something worth discussing before the cab chassis is financed.
Because the finance conversation should be about the truck you’re actually putting to work.
What Are You Really Buying?
Consider a business buying a cab chassis that will eventually become a crane truck.
There may be separate costs for:
cab chassis
truck body
crane
hydraulics
PTO
stabilisers
toolboxes
safety equipment
electrical work
cameras or other technology
engineering or compliance work
other specialised fit-out
The truck dealer might supply one component.
A body builder supplies another.
The crane could come from another supplier again.
If you tell your broker only about the chassis, we’re seeing only part of the transaction.
Start With the Finished Truck
I prefer to work backwards.
Instead of beginning with:
“I’m buying this cab chassis.”
Tell us:
“I’m building a truck to do this job.”
What does the finished vehicle need to do?
Will it carry freight?
Lift equipment?
Transport refrigerated products?
Tip materials?
Carry tools and machinery?
Perform waste or recycling work?
Operate as a service vehicle?
The answer helps us understand what is being built and what the total funding requirement is likely to be.
Can the Body and Equipment Be Included in the Truck Finance?
Depending on the lender, asset and transaction, they potentially can.
Truck finance doesn’t necessarily have to stop at the cab chassis.
Some lenders can consider the truck together with eligible bodies, trailers and ancillary equipment.
That can include equipment such as cranes, hydraulics and refrigeration systems.
The important part is telling us about the complete build early.
If we know from the beginning that a $160,000 chassis is ultimately becoming a $280,000 working truck, we can consider the proposed transaction on that basis.
That’s very different from arranging the chassis finance and discovering afterwards that another $120,000 still needs to be funded.
What If the Truck and Body Come From Different Suppliers?
That’s common.
You might purchase the chassis from a truck dealer in one location and have it delivered to a body builder somewhere else.
The body builder then completes the vehicle before it is ready to work.
That creates a transaction involving more than one supplier and potentially more than one invoice.
It doesn’t automatically mean every component needs a completely unrelated finance arrangement.
Depending on the lender and structure, the complete build may potentially be considered together.
But it needs to be set up properly.
Settlement May Not Happen All at Once
A cab chassis and body aren’t always ready at the same time.
The truck dealer may need payment for the chassis before the body builder has completed the fit-out.
That can mean settlement needs to occur in stages.
For example, the chassis may be settled first, followed by the body or other eligible equipment once the work has been completed and the required documentation is available.
The exact process depends on the lender and transaction.
This is another reason not to leave the finance discussion until the truck is sitting at the body builder.
If staged payments are going to be required, we want to understand that at the beginning.
A Tipper Isn’t Just a Cab Chassis
Take a tipper as an example.
The cab chassis might be suitable for dozens of different uses.
It’s the body, hydraulics and associated equipment that turn it into the productive asset the business actually needs.
The same principle applies to other specialised trucks.
A refrigerated rigid needs the appropriate body and refrigeration equipment.
A crane truck needs the crane and associated fit-out.
A service truck might require substantial storage, toolboxes, power equipment and other modifications.
A hook-lift truck isn’t complete without the equipment that allows it to perform that work.
When those components represent a significant part of the total purchase, they shouldn’t be an afterthought in the funding plan.
Get Proper Quotes Before the Build Starts
If several suppliers are involved, good documentation becomes important.
We need to understand:
Who is supplying what?
What does each component cost?
When is each payment required?
When will the build be completed?
What will the finished truck consist of?
A detailed body-builder quote is much more useful than an estimate saying “fit-out approximately $80,000”.
If the specification changes during the build, tell us.
A material difference between what was originally approved and what ultimately appears on the invoice can create problems when you’re trying to settle the transaction.
What If the Final Build Costs More Than Expected?
Custom builds can change.
You may decide to upgrade the crane.
Additional fabrication might be required.
The body specification could change.
Something that wasn’t included in the original quote may become necessary.
This is why it’s worth allowing for the realistic finished cost before finalising the funding plan.
If a project originally expected to cost $250,000 becomes a $290,000 build, the extra $40,000 still needs to come from somewhere.
Don’t assume that because finance has been approved for the original transaction, every later addition is automatically covered.
Talk to us before making substantial changes to the build.
What If You Already Own the Chassis?
That’s a different transaction again.
Perhaps you already own a suitable truck and want to add a new body, crane, refrigeration unit or another significant piece of equipment.
Finance may still be worth investigating for an eligible major fit-out or upgrade, depending on the circumstances and lender.
You don’t necessarily have to be purchasing a completely new truck for there to be a finance conversation.
The important thing is understanding what is being added, what it costs and what the completed vehicle will be used for.
Should You Pay for the Fit-Out From Cash?
You might have enough money to pay the body builder yourself.
That doesn’t automatically mean you should finance it.
And it doesn’t automatically mean you should use cash.
Look at what the business needs its cash for.
While the truck is being built, you may also need money for:
wages
fuel
insurance
registration
deposits
stock or materials
other vehicles
operating expenses
tax obligations
unexpected costs
A truck that costs substantially more by the time it is ready for work can consume a large amount of working capital.
The decision is whether retaining that cash in the business justifies the cost of financing eligible components of the build.
When Will the Truck Actually Start Earning?
This question matters with custom builds.
Finance commitments can begin before the completed truck starts generating revenue.
If a chassis is purchased now but the body won’t be finished for several months, understand that timing.
When is the truck expected to be operational?
Is it being built for an existing contract?
Is the business replacing another truck?
Will the current truck remain working until the new one is ready?
Will there be a period where the business is carrying costs on both?
The finance structure should be considered alongside the build timeline, not just the purchase price.
What Happens to the Existing Truck?
If the new truck is replacing another vehicle, establish what you’re doing with the old one.
Will it be traded?
Sold privately?
Kept as a backup?
Moved to another driver?
If finance is still owing, obtain the payout.
The existing truck may have equity that can contribute towards the new build.
Alternatively, there may be a shortfall that needs to be considered.
Again, we want to know this before finalising the new transaction.
Don’t Build a $300,000 Truck Around a $160,000 Finance Conversation
This is really the point.
A business owner can become focused on negotiating the cab chassis because that’s the first invoice in front of them.
But if the business needs another $140,000 of body and equipment before that chassis can earn a dollar, the $300,000 finished asset is the real commercial decision.
That’s the number we should be discussing.
It allows us to consider:
the total investment,
the business’s contribution,
the proposed finance,
the suppliers,
the build timeline,
the expected work,
and the finished asset.
Tell Us About the Build Before You Order It
If you’re buying a standard truck that’s ready to drive away, the transaction may be relatively straightforward.
If you’re building a specialised working truck, tell us the whole plan.
Send us the chassis quote.
Send us the body quote.
Tell us about the crane, refrigeration, hydraulics or other equipment.
Tell us when each supplier expects to be paid.
And tell us what the completed truck is going to do for the business.
Then we can investigate finance based on the transaction you’re actually undertaking rather than discovering half the funding requirement after the chassis has already been purchased.
Building a Working Truck in Wagga Wagga?
Thrive Broking assists businesses in Wagga Wagga and surrounding regional areas with finance for eligible trucks, trailers, bodies and commercial equipment.
If you’re purchasing a cab chassis that still needs substantial work before it can start earning, talk to us about the complete build.
The truck dealer’s invoice may only be the beginning.
What matters is what it will cost to put the finished truck on the road and ready to work.