Box Truck Loans

One or more commercial trucks can really improve your business. In fact, there are several types of trucks you might want to explore before you buy, such as vocational trucks (dump trucks, etc.), semi-trucks (18-wheelers, etc.) and of course, box trucks. 

True to its name, a box truck has a rectangular or cube-shaped cargo hold that’s separate from its cab. While you can use the compartment to ship and house all sorts of products, there’s a chance your average box truck will be more expensive than most consumer vehicles, in which case a loan might be necessary to fully finance it. 

What Types of Box Trucks Are Available?

When it comes to trucks, the cargo they can haul, and the roads they can handle, class is everything. For instance, there are 3 types of box trucks you can finance in Canada, each of which can be used for different purposes:

  • Light Duty (Classes 1, 2, 3) – Otherwise known as a “cutaway” or “high cube” van, the cab of a light duty box truck looks like a hybrid of a truck and a van. Normally, box trucks of this calibre can carry 1 – 3 rooms worth of items, making them perfect for maneuvering through tight urban areas or moving someone out of a small apartment (small and/or short hauls). A new light duty box truck will cost about $25,000 – $45,000, can carry 2 passengers and may feature a garage-style door, as well as a small cargo lift (also called a liftgate). 
  • Medium Duty (Classes 4, 5, 6) – With larger storage capabilities, medium duty box trucks can carry 3 – 5 rooms worth of cargo. They typically run on diesel fuel, have rolling doors, and can be outfitted with a slightly bigger liftgate. Most medium duty box trucks cost $35,000 – $90,000 new and can also carry 2 passengers comfortably. All these features make medium duty box trucks ideal for moving someone out of a condominium or larger apartment and businesses that handle moderately sized goods and supplies (moderate hauls).
  • Heavy Duty (Classes 7 & 8) – As the largest class, heavy duty box trucks can generally accommodate up to 3 passengers and have enough cargo space for 5 – 7 rooms worth of items. While prices can vary based on certain features, some new heavy duty box trucks can cost over $90,000. Although they may be more expensive, this makes any heavy duty truck a better option when you’re moving a houseful of things, driving longer distances, or transporting bulkier goods, such as appliances or mass amounts of food and/or beverages.

What Size Can Box Trucks Be?

Before you start looking for a truck loan, you should figure out which type of box truck you want. Since you don’t want to end up with a vehicle you’re unhappy with, you should start by researching all the different box truck brands, models, and financing sources near you.

One of the first features you research should be the size of box truck you need. For example, box trucks can come in a variety of cargo container sizes:

  • Light Duty Box Trucks = 12 – 14 feet in body length (400 – 500 cubic ft.)
  • Medium Duty Box Trucks = 16 – 18 feet in body length (800 – 900 cubic ft.)
  • Heavy Duty Trucks = 22 – 26 feet in body length (1,000 – 2,000 cubic ft.) 

Depending on what you plan to transport or what your business involves, you may want to check out several sizes of box truck prior to making your final decision. You may even want to customize your box truck with something other than a closed cargo container, such as a stake bed with removable rails or an adjustable flatbed with a winch. 

Looking for a loan to purchase a flatbed truck? Check this out.

What Type of Box Truck Should I Get?

Remember, the more research you do before you attempt to finance your box truck, the better. After all, there are several factors that can affect the overall cost, resale value, and reliability of your box truck, including but not limited to it’s:

  • Make & Price – The brand of truck you buy can impact its cost, future maintenance issues, and resale value. For example, a Ford or GMC may have a better design and price tag than some international models. However, foreign companies like Isuzu or Mitsubishi often produce more reliable box trucks.
  • Model & Mileage – How old your box truck is and how much it’s been driven should also be considered carefully. For instance, while a used box truck can be cheaper initially, it may require more immediate and extensive repairs, and have a lower resale value than a newer model with fewer kilometres on it.
  • Size & Fuel – As mentioned, the larger your box truck is, the more it can cost upfront. Additionally, larger trucks often run on diesel fuel, which can be pricier than regular gasoline, especially when you’re making long haul journeys. For short hauls, it may be cheaper to buy a light duty box truck with a smaller engine.  
  • Features & Attachments – Obviously, the features and customizations your box truck has can also have an impact. For instance, your box truck’s price, maintenance requirements and resale value may change if it has:
    • An automatic transmission (sometimes pricier than a manual)
    • An open or closed cargo hold
    • A refrigeration unit and/or panelling
    • Utility shelving or work stations
    • A fixed or adjustable bed
    • A more diverse infotainment system
    • Various equipment/attachments (crane, cement mixer, etc.)
    • A conventional cab configuration (the cab is behind the engine = better comfort and visibility for long hauls) 
    • A low-cab forward configuration (the cab is in front of the engine = better maneuverability and visibility for short hauls)

Worried your bad credit will affect your ability to qualify for a truck loan?

What Can a Box Truck Loan Cost?

It’s true that the overall price of your box truck can fluctuate based on a number of expected and unexpected factors. That said, there are ways of calculating how much your box truck loan will cost initially, so you’ll have an easier time adjusting your budget and figuring out whether your lender or dealership is right for you.

Here how much you could pay for the base cost of your box truck loan:

  • Let’s say you need to borrow $60,000 to purchase a medium duty box truck
  • Your lending source offers you a monthly repayment plan of 10 years 
  • They also charge you in interest rate of 7%
  • Your total loan amount = $60,000
  • Your monthly payment amount = $696.65
  • Interest you pay over 10 years = $23,598.11 
  • Sales tax you’re charged for your loan = $600
  • Your total loan cost is = $84,198.11

Here’s the same example, only now you offer a down payment of $10,000:

  • Your 7% interest rate, repayment period, and sales taxes remain the same
  • However, you now only need to take out a $50,000 box truck loan
  • Your total loan amount = $50,000
  • Your monthly payment amount = $580.54
  • Interest you pay over 10 years = $19,665.09 
  • Sales tax you’re charged = $600
  • Your total loan cost = $80,265.09

How to Qualify For an Affordable Box Truck Loan

As previously stated, these examples are just basic representations of what you could initially pay for a box truck loan and there are many factors that can change the cost. For instance, you may be charged a higher interest rate if you have:

  • A bad credit score (300 – 600)
  • A low monthly/yearly income
  • A history of missed/late payments and debt management problems
  • Recently been discharged from a consumer proposal or bankruptcy
  • An ongoing debt reduction procedure (debt settlement, bankruptcy, etc.)

Luckily, there are also a few things you can do to decrease your interest rate, such as:

  • Consolidate your existing debts (ideally those with higher interest first)
  • Avoid minimum, partial, or late payments (or missing them altogether)
  • Check your credit report for errors or signs of identity theft 
  • Wait until your credit score has improved to the good range (660 – 900)
  • Find a better or second source of income and start saving
  • Offer a large down payment (ideally 20% of the final asking price)
  • Trade-in your current truck (may result in a lower price for your next one)
  • Ask a stronger candidate to cosign your loan application 
  • Offer an asset your lender can use as collateral

The full cost of your box truck loan can also vary based on where you apply and what payment options your lending source offers. Unfortunately, not all lenders or dealerships accept trade-ins, collateral, or cosigners. Some private companies and truck dealers approve clients with bad credit but their interest rates and fees are usually higher. Be sure to ask your lender about their options, rates, and conditions before you apply. 

Where Can I Get a Box Truck Loan?

While your approval chances, loan amount, and interest rate can weigh heavily on your financial health, rest assured that there are several places where you can get a box truck loan that suits your preferences, including but not limited to:

  • Banks & Credit Unions – Most borrowers will go to their financial institution for a loan, because interest rates, loan amounts, and the security provided can be more appealing. However, not all banks or credit unions offer truck loans and approval restrictions can be tighter. 
  • Alternative Lenders – If your bank/union denies you due to a bad credit score or existing debt problems, there are plenty of alternative lenders that can offer you a smaller loan with easier approval restrictions. While these subprime sources are less regulated and often charge higher rates, you may be able to apply for:
  • A bad credit loan
  • An equipment loan (your truck acts as loan security) 
  • A secured loan (other collateral can be offered)
  • A guarantor loan (you need a cosigner) 
  • Dealerships & Manufacturers – If you want to explore your options or can’t find the right lender, there are lots of dealerships and truck companies that can offer you financing plans for select makes and models. You may even qualify for extra perks, such as add-ons and other features. However, some in-house financing sources may try to sell you a truck or loan deal that’s not worth the money. Always be careful and get your vehicle inspected by a qualified mechanic first.

Searching For a Box Truck Loan in Your Area?

Whether you’re looking to purchase one box truck or a whole fleet of them, Loans Canada can help you find the best lending sources and rates in your area or online. 

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