The truck you buy for your towing business is one of the most important cost considerations you face. With the high cost and quick depreciation of new trucks, buying a used tow truck may be your best bet. Below we discuss some factors to consider before completing the purchase.
5 tips for getting a used tow truck.
1. How do you plan to use the tow truck?
If you own a towing company, you will likely use the truck several times a day to tow stranded vehicles for your customers. You need a truck with a strong engine and high horsepower that manage such demands. Maybe you’re a farmer and you plan to use a tow truck only occasionally to move heavy equipment from one location to another. Knowing how you intend to use the truck before buying it will enable you to determine the features that it must have to meet your needs.
2. Establish a budget for your tow truck purchase.
Now that you understand what you need your tow truck to do and the features you need, the next step is to determine how much you have to spend on it. With that figure in mind, start by obtaining the balance for your savings and checking account to see if you have enough funds available to pay in cash. This is obviously the best scenario since you won’t need to pay a loan origination fee, interest, and other fees associated with obtaining a large equipment loan from a lender.
There’s nothing wrong with funding the purchase in full or in part using credit as long as you’re certain you have enough money to keep up with the monthly payments. If you do obtain a loan, paying more than the minimum monthly payment can help you save considerable interest charges as well as own the tow truck free and clear in a shorter time.
3. Start shopping.
It’s important to put a lot of time into research so you know the typical price paid for a tow truck of the same make, model, year, and general condition as the one that you would like to purchase. Try to strike a balance between shopping in person and looking at online and newspaper ads. Once you do find the tow truck you want to buy, let the seller know and put down a deposit to confirm your intent to follow up with a sale.
4. Sign a purchase agreement.
Don’t be afraid to attempt to negotiate for a better price or financing terms with the seller before agreeing to the transaction in writing. Sellers expect this and will likely be more willing to work with you than you think. Inspecting the vehicle before purchase is a good idea to avoid problems the seller may not have known about or fully disclosed. After reaching an agreement on price, sign the purchasing agreement and have the seller sign the title. You will need the signed title to transfer ownership of the tow truck from the seller to you.
5. Make sure your new tow truck has the right insurance.
Our team of tow truck insurance experts is here to help you locate, compare, and purchase insurance for your new tow truck. Please visit our frequently asked questions page to learn more about the services we offer. To get tow truck insurance, you can fill out our online quote form or call us. But if you’d rather chat with us online, you can message us on LiveChat.