In the current economic climate of rising prices, increasing interest rates, tight labour conditions and soaring inflation, cheap truck loans are THE business essential for operators. Reducing outgoings through lower interest rates and repayments with cheap truck loans can to some extent, fend off increases in other business expenses. The RBA has now acted in the past three consecutive months to lift interest rates by quite significant amounts and further rises are on the way.
Absolutely, the current economic landscape and the series of interest rate hikes by the RBA highlight the heightened importance of securing the most cost-effective truck loan. The era of historically low interest rates is gradually fading, and businesses need to adapt to this changing environment to ensure their financial stability and success.
As inflation and other factors contribute to rising costs, taking control of your financing can provide much-needed relief. By securing a cheaper truck loan, you can mitigate the impact of interest rate increases on your monthly repayments, thus freeing up resources for other critical aspects of your business operations.
Working with experts in truck finance can help you navigate this challenging period and identify the most suitable loan options that align with your financial goals and business needs. Their insights and industry connections can help you secure the best interest rates and loan structures, enabling you to make informed decisions and effectively manage your expenses.
In a time when external factors are driving up costs, taking control of your financing is a proactive step that can contribute to your business's long-term success and financial stability.
Price and Cost Increases Biting Hard
Those that thought 2 years of the pandemic were tough going, hello 2022. This year presents business operators with a complex set of economic circumstances which are resulting in cost rises which are biting hard.
The Fair Work Commission recently granted a significant rise in the minimum wage. This will see wages bills for those with employees receiving this pay rate increase. In addition changes to the superannuation guarantee may also bite hard on the bottom line. The SG has been increased to 10.5% and is now applicable to all wage earners. For businesses that pay ‘plus super’ this may be a significant cost increase.
Inflation has surged globally and both local and international factors are contributing to the increase in the Australian economy. Constrained supply and increased demand is pushing up prices in some sectors, especially for materials. Global supply chain issues continue to create problems and concerns in many industries.
General prices are on the up as can easily be seen with the weekly shop. The recurring flood events are seriously impacting agriculture and pushing up prices. These events may also be impacting business capacity in this sector and further effect the bottom line.
Another big hit ahead will be the withdrawal of the reduction on the fuel tax. This is due to expire in September and Federal Treasurer Jim Chalmers has indicated it won’t be extended. Energy prices also seem to be in an upward spiral and represent a major expense to business.
Rising interest rates will have varying impacts for business owners. Those with loans with a variable interest rate will be facing an increase. Owner operators and sole traders where personal and business income are closely linked may be facing an increase in mortgage payments.
Cheaper Truck Loan Options and Opportunities
Those needing to upgrade vehicles may be rethinking their plans in the current economic conditions. But with interest rates set to rise further in coming months that delay may end up costing in higher rates and repayments.
In the realm of truck loans, achieving more cost-effective options is certainly attainable. The primary determinant lies in partnering with a finance broker such as Jade Truck Loans to expertly source and secure the most suitable loan. Given the intricate landscape of the heavy vehicle finance sector, there exists a substantial range in interest rates for truck loans. To ensure you're making an informed decision, it's prudent to Compare Truck Loans & Finance Options From Major Lenders, enabling you to discern the best possible solution for your needs.
Lenders set their rates based on the cash rate where their funding is sourced in Australia. Lenders sourcing funding globally may be paying even higher rates. That impacts the rates they set. Having access to a more choices in lenders ups the ante when it comes to securing the cheapest rate.
That’s what Jade can offer. Our vast accreditations allow us the vast choice to secure the cheapest rate on offer to suit that particular customer at that particular point in time. Our lenders include those specialist non-bank lenders in the heavy vehicle and equipment sector that do not offer services directly to business. They operate through their selected brokers and we can provide access to what can be an extremely attractive truck loan market.
Those seeking to achieve a cheaper truck loan can look to a number of aspects in regard to the loan itself:-
- Where the repayment amount is key, consider reducing the truck loan amount required.
- The loan amount can be reduced by purchasing a less-expensive model or making a larger deposit.
- Repayments can also be reduced by varying the term of the truck loan or the balloon/residual. Some lenders will have their set rulings around what they will approve in these loan elements. Having a Jade consultant negotiating on your behalf can be a distinct advantage.
- Being offered the cheapest truck interest rate is key to the cheaper outcome. While our consultants will be sourcing the cheapest offer, business owners can address their credit rating to improve their prospects. This is of particular importance for SMEs and sole traders.
- Reviewing the truck loan products may also be relevant. Chattel Mortgage offers a lower rate than Leasing and Rent-to-Own and may be an attractive option to reduce the overall cost of the loan.
- In concert with aiming at a cheaper interest rate, consider the additional benefits available through current taxation measures such as temporary full expensing and Loss Carry Back. While these would not be realised until the 2022/23 tax return is submitted, it can represent a substantial benefit at that time.
Refinancing as a Workable Solution
If your existing truck loan is proving to be impractical within the current environment of price hikes and rising interest rates, considering refinancing might offer a viable solution. We have provided several informative articles on how Better Interest Rate Refinancing can effectively bolster businesses. Our experienced consultants are well-equipped to guide you through the array of available options, ensuring you make an informed decision that aligns seamlessly with your business objectives.
Inflation is forecast by the RBA to increase from the current 5.1% to possibly 7% in coming months. This means the cost and price pain is set to continue. Addressing achieving a cheaper truck loan now can ease the pressure of current price issues and set the business up over the full term of the loan.
Contact Jade Truck Loans on 1300 000 003 to discuss achieving cheap truck loans to support your business address rising prices.
DISCLAIMER: THIS INFORMATION IS ISSUED PURELY FOR THE PURPOSE OF GENERAL INFORMATION PROVISION. IT IS NOT TO BE TAKEN AS THE ONLY SOURCE OF INFORMATION FOR BASING FINANCIAL DECISION-MAKING. THOSE REQUIRING FINANCIAL GUIDANCE AND ADVICE SHOULD CONSULT WITH THEIR FINANCIAL CONSULTANT OR ADVISOR. NO LIABILITY IS ACCEPTED FOR ANY MISREPRESENTATION OF POLICIES, DATA OR ERRORS IN THIS CONTENT.
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