Heavy rainfall on ground already sodden from record rainfall in 2022 has caused yet again another major flood situation for many Australians. The effects on many individuals and business operators is devastating. While State and federal governments have offered assistance, many businesses may have a range of needs and queries that are not specifically addressed. We appreciate that some operators will be concerned on many fronts and from our perspective, specifically the finance front. We provide vital information re business finance support for truck operators with vehicles written-off or with disruptions to business operations due to VIC, TAS and NSW floods.
Damage to Trucks Under Finance
When dealing with damaged vehicles currently under finance, operators should adhere to a prescribed process. This applies to various forms of secured finance such as Chattel Mortgage, Lease, Rent to Own, and Commercial Hire Purchase. It's imperative that insurance is procured for the assets, safeguarding against unexpected events like flood damage. To better understand How Chattel Truck Mortgage Loan Works, it's essential to be well-versed in the insurance coverage aspect within the context of secured financing.
- When trucks are damaged due to flood or any other event, the first call should be to the insurer.
- Insurers will have their own processes and procedures for dealing with claims and will advise what to do next.
- The vehicle may need to be inspected by an assessor who will make the decision if the vehicle is a write-off or reparable.
- When assessed as a write-off, the insurer proceeds to processes the pay-out.
- The lender that holds the truck as security against finance will be due the total amount of outstanding on the finance.
- Any additional funds in excess of what is due to the lender should be paid to the operator.
Amidst the surge in flood-related claims, a swift approach to contacting your insurer can expedite the process and hasten monetary disbursements, facilitating the acquisition of replacement trucks. It's a prudent move to store insurance policy details for trucks and other significant assets in your phone for easy access in such emergencies.
Irrespective of the condition of a truck under finance, the loan repayments remain obligatory. If a business encounters difficulty in meeting these payments due to flooding or other circumstances, it's advisable to promptly engage with the lender. Communicating the situation and discussing possible solutions is crucial.
Failing to notify the lender and make repayments can lead to loan default. This, in turn, can negatively impact the business's credit profile, potentially affecting future finance applications. Lenders assess the credit profile, and the offered interest rate might be contingent on the credit score. Maintaining open communication with the lender is essential to safeguard both the financial health of the business and its creditworthiness.
Finance for Replacement Vehicles
Getting the business operational after a flood will be a high priority. Where the written-off truck is the core of the operation and the major source of income such as for transport operators and especially sole traders, acquiring replacement vehicles is critical to the overall operation.
Insurance will cover the amount as agreed in the policy. This may or may not cover the full replacement cost of new vehicles. Finance may be required to acquire new trucks. The time lag for insurance pay-outs should also be considered. This will be advised by the insurer. During large-scale flood events such as are being experienced in VIC and NSW currently, there can be many claims and delays could be anticipated.
We can provide swift assistance for operators to replace trucks with new finance. To speed up the process of replacing written-off vehicles, operators can contact us to arrange pre-approved truck finance as a matter of urgency. This can be handled over the phone and via email as we fully understand the circumstances which may be experienced in flood events.
Our consultants, specializing in Commercial Vehicle Finance, will handle the quote sourcing and on acceptance, will process the application to the approvals stage. So operators need only make the one call to us, not ring around multiple lenders. With the finance approved, operators can proceed to immediately place the order for a new truck.
The liability of the existing truck finance may appear on the business balance sheet until such time as the insurance claim is finalised. Our consultants can discuss this with lenders on behalf of customers to ensure the situation does not negatively impact the new loan application and offer.
If the insurance pay-out is received prior to finalising the finance and purchase of the new truck, and the business chooses to direct any monies coming to it as a deposit on the truck, the Jade Truck loans consultant can amend the finance to a lesser loan amount prior to finalisation.
We’re here to assist and support and address any concerns and questions, so feel free to reach out.
Business Finance Support
In addition to truck loans, we can provide support through a range of business finance facilities to support operators that have business operations impacted by flood. This may come through a number of circumstances including:- damage to roads and major infrastructure making it impossible to continue transport work in the area; damage to the agricultural sector in many regions may mean loss of work for operators in the sector until the producers have produce to head to market; and in many other ways.
If business income is interrupted due to flood, speak with us about the options available to support the business through this period.
Contact Jade Truck Loans on 1300 000 003 to discuss support for truck operators impacted by VIC and NSW floods.
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.