How to Finance Your Trailer

The sticker price of a cargo trailer can often be high and not many people can afford to pay the full cost upfront. In fact, a majority of buyers opt for a financing package. However, financing a big-ticket purchase often requires careful planning along with the judicious use of various options. At Countryside Trailer Sales, we strive to make the financing process as simple as possible. In that spirit, we have crafted this brief guide with some of our top tips for financing a trailer so that you can get the rig you need as soon as possible. If you want more information or want to explore our wide selection of cargo and utility trailers for sale, head over to our dealership in Spring, Texas.

Establish a Budget

Your first step is to determine how much you can afford to spend. This accomplishes two goals. First, it helps you avoid models that are beyond your price point since you'll eliminate them from your search at the start. Second, it helps you avoid unnecessarily skipping features or models that you can afford. By setting a realistic maximum spending amount, you will be able to get the highest quality trailer that you can afford.

Know that your loan terms may range anywhere from a few years up to ten years, so bear in mind how your finances may change over time. You’ll also want to factor in additional costs, like aftermarket accessories, maintenance needs, and storage rental fees. Budgeting for these now will help you figure out what you can spend without putting yourself into debt or being unable to afford to use your unit once you have bought it.

Consider the Down Payment

You’ll typically need to put down at least 10% of the total cost of a trailer when you purchase it. Some places may require as much as 20% of the total cost upfront. Do your research to determine what your local options are in this regard. If you can pay more upfront, then you’ll have to pay less over time due to lower interest rates.

Check Your Credit Score

Your credit score will significantly impact the amount of money you can obtain in a loan. The higher your credit score is, the better, so do whatever you can to improve yours and get it over 700, if possible. You'll want to think about whether you’d like to obtain an unsecured loan or a secured loan. Unsecured loans mean that the company cannot repossess your trailer if you fail to pay it, but they tend to have higher rates. Secured loans make use of your purchase as collateral, so it can be repossessed to make up for a default on the loan. However, the interest rates are lower, and borrow rates can be higher.

Where to Look For a Loan

You can get your trailer financed from several sources. Banks, credit unions, and dealerships are all excellent places to look. Here at Countryside Trailer Sales, we provide our customers with a finance department to help them get the funds they need for buying a trailer. Just talk to our staff if you’d like to know more.

You can also apply for a loan at any bank that offers one, even if you don’t have a savings or checking account with that particular establishment. Choosing a bank that you already use, however, can make your interest rate lower. You may have anywhere from one to several years to pay back your loan, and amounts are somewhere between a few and several thousand dollars. Rates vary depending on credit score and the size of the loan.

Nonprofit lending institutions like credit unions are an excellent choice for anyone who needs a loan and has bad credit. You’ll receive a secured loan when you use a credit union, requiring you to put up your trailer as collateral. Credit unions usually offer you higher loan amounts at lower rates compared to banks.

Consider the Long-Term Value

When you finance your trailer, you are going to end up paying interest fees. Be careful about the models you consider so that you don't end up paying way more than the unit is worth. New trailers have a high depreciation rate at the start of ownership that gradually evens out over time. If you buy a brand-new and expensive model with a very long-term loan, you could end up paying a huge amount in interest that will be much more than the trailer is worth. As you explore the market, stick with what you can afford in the long-term, and make the largest down payment that you can.

We hope that this trailer financing guide was helpful. To learn more about our incredible financing options, get in touch with us at Countryside Trailer Sales in Spring, TX. Our knowledgeable staff is always available to answer questions and help you determine which models and financing packages are right for you. We welcome all our patrons visiting us from The Woodlands and Houston, so stop by today!