You can finance your first truck on a new ABN. Most lenders want a contract or a letter from the principal, clean credit and a 10% to 20% deposit. If you own a home, expect a rate around 13% to 16% to start. It comes down to around 8% to 10% once you have traded for two years.
The short version
- The contract letter matters most. It shows the truck has work to pay for it.
- Owning a home matters a lot. Without one, far fewer lenders will take a new ABN.
- A $250K used truck with 15% down is about $4,835 a month over five years at 13%. That is about $1,120 a week.
- After two years of on-time repayments, you can refinance or upgrade at a lower rate.
The contract letter
A new ABN has no trading history, so the lender wants to know where the money will come from. The contract letter tells them.
Ask the principal to put these in writing:
- Who the work is for.
- Your rate, per week, per hour or per load.
- How long the work runs.
- That you will be on as an owner-driver, in your own truck.
Lenders put the weekly repayment next to the weekly income in the letter. The smaller the repayment is next to the income, the easier the approval.
Get the letter before you apply. Without one, approval is much harder.
What else lenders check
Your driving history
Lenders want to see you have done this work before. Have your work history ready: who you drove for, what you drove and for how long.
Your credit
With no business history, your personal credit file carries the deal. Clean credit means more lenders. Past defaults do not rule you out, but you will have fewer lenders and pay a higher rate.
Your deposit
On a new ABN, expect to put down 10% to 20%. A trade-in counts. Our article on truck finance deposits has more.
Whether you own a home
This makes a big difference on a new ABN. Some lenders only take a new ABN if you own property. Without it, you have fewer lenders, a higher rate and usually a 20% deposit.
The truck
A newer truck is easier to finance. Lenders check how old it will be when the loan ends. Most cap that at 15 to 20 years.
Prime movers cost more. Many lenders add about 1% to the rate for one, and some will not finance a prime mover on a new ABN at all.
What it costs
Five-year chattel mortgages, 15% deposit, no balloon, for a home owner. The 13% column is a new ABN. The 9% column is the same truck once you have traded for two years. The rates are examples, not quotes, and lender fees are extra.
| Truck price | Borrowed | New ABN, 13% | After two years, 9% |
|---|---|---|---|
| $150K | $127,500 | $2,901 a month | $2,647 a month |
| $250K | $212,500 | $4,835 a month | $4,411 a month |
| $400K | $340,000 | $7,736 a month | $7,058 a month |
On the $250K truck, the new ABN costs about $420 a month more. That is about $25,400 over five years.
Balloons are harder to get on a new ABN. Lenders want the loan paid down faster than the truck loses value. For more numbers, see truck finance repayments.
What to send
Send these together and you get an answer faster:
- Your ABN, and your GST registration if you have it.
- The contract letter.
- Your driver's licence.
- Your work history.
- The truck details: a dealer quote or invoice, or the seller's details for a private sale.
- Bank statements, if you have been trading for a few months.
- A 12-month cash flow forecast. Some lenders ask for one on a new ABN.
After two years
Pay your first truck loan on time. Lodge your BAS on time. Keep your business and personal banking separate.
At two years, lenders treat you as an established operator. You can usually get a lower rate, low-doc loans and often no deposit on the next truck. That is when many owner-drivers refinance or trade up. Our guide to prime mover finance covers the next truck.
Truck loans are a type of asset finance. We arrange them for transport and logistics operators. For other gear on a new ABN, see equipment finance with a new ABN.
If you have a contract lined up and a truck in mind, send us the contract letter and the truck details. We will tell you which lenders will write it and what it should cost. Start an application. It takes under a minute, and most enquiries get a response within four business hours.