Indeed, there are requirements to meet before you can qualify to lease a box truck, and these requirements and documents needed to lease a box truck will vary from one company to another. Box truck leasing involves obtaining a truck temporarily from a company for an agreed period.
While the truck does not belong to you before the lease term has ended, you get the option of buying the truck directly depending on a prearranged price. Since box truck leasing companies are concerned with getting their trucks back after the leasing period, there are restrictions that will come with the terms of your box truck leases.
Have it in mind that box truck leasing companies have very strict limitations on mileage, carriers to work with, and other factors that may in many ways influence your profit as an independent truck operator. Owing to that, you must take adequate care when dealing with any company and make sure to find one that is the right fit for you.
Requirements to Lease a Box Truck
Just as was noted above, certain requirements will determine if you qualify for a box truck lease. These factors include;
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Credit Score
Agreeably, most lease programs will carry out a credit check because it’s very necessary. You will most often need a credit score of at least 600 to get the best box truck rates. Note that the lower your score, the more you will have to pay on fees and deposits.
In some cases, a very low credit score will warrant your truck leasing application to be denied. You also have to understand that your credit score can be negatively affected if you keep applying erratically to any and every company that advertises box truck leasing.
What happens when you apply erratically is that you get hard inquiries on your report. According to experts, each hard inquiry can knock you out about 10 points. Applying to as little as 4 places is enough to drop your score massively and negatively.
Also, note that working with dealerships will also affect your credit score. When you “apply” or check if you can get financed for a box truck, these dealers will most often send your information around to any bank or company they think you can get approved at. Have it in mind that this will also lead to many unnecessary and credit-damaging hard inquiries.
Owing to that, it’s pertinent you get conversant with both your credit score and also understand what box truck financing companies can offer you at your current credit rating before you ding your score. Invest in carrying out detailed research to make sure you are making the right choices for your business.
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Truck Insurance
Note that before you can get approved or even obtain your box truck lease, you will be expected to have box truck insurance. In the United States, most commercial truck lenders will want you to have adequate box truck insurance.
Have it in mind that your box truck and business are valuable assets, and you wouldn’t want to be under-insured and liable for the potentially massive repair and legal bills. Most often, box truck lenders will ask that you obtain the following coverage:
- Liability coverage
- Physical damage coverage
- Bobtail coverage for non-trucking use
- Cargo and storage coverage that covers what you’re hauling
If, for instance, you own a fleet of box trucks and have employees driving for you, you will also be expected to prove you have workers’ compensation. Ensure to reach out to your local business insurance agent for more details especially since most of these financing institutions will not allow you to finalize the deal without having the right type of insurance.
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Current Ability to Pay
Aside from the fact that some of these companies will ask for a down payment, note that you will be expected to prove your current income by showing copies of your last few paychecks. Also, note that you will likely have to prove your time in Business with a CDL License.
Most often, 3+ Years is preferred. You will also need to prove that you have been living at the same address for two years. Note that there are companies that can help you get approved for truck financing without harming your credit.
These companies make it possible for you to see your rates without any damage to your credit or commitment from you. You only have to visit the website and look for a link to a participating bank where you can apply online. If not, call the company and find out the process for pre-approval.
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Driver’s License
To lease a box truck, your driver’s license will have to be valid in the state where you plan to register your leased box truck. While you might not need a commercial driving license to drive a box truck, most companies or lenders will want to see a standard, Class C, driver’s license.
This license is more or less sufficient to operate a standard box truck anywhere in the United States. If you are bothered that your box truck may fall into the Class B category, then consider asking for the weight of the truck and check with your local DMV to obtain more information concerning Class B licensing.
Note that a good number of box truck operators do not need a Class B vehicle. The requirements needed to lease a box truck will vary from one place to another.
However, once you succeed in picking out a box truck that meets all the requirements and you have the proper insurance in place, you may not have to do much other than finalize your funding. Ensure to reach out to your finance specialist to understand your requirements and finalize your application.