Semi trailer finance is a business loan for a trailer, with the trailer as the security. Most operators use a chattel mortgage over five years. A new trailer for an established business sits around 7.5% to 9% p.a. At 8%, that is about $2,430 a month on $120K.
The short version
- Lenders price a trailer like a heavy truck. Most put them in the same group.
- Older trailers are easier to finance than older trucks. Several lenders take a trailer up to 30 years old at the end of the loan.
- The trailer can go on the same loan as the prime mover, or on its own.
- Owning a home gets you more lenders and a lower rate.
What it costs
Five-year chattel mortgages with no deposit. These rates are examples only, and lender fees are extra.
| The deal | Borrowed | Rate | Per month | Per week |
|---|---|---|---|---|
| New flat top or curtainsider | $120,000 | 8% | $2,433 | $562 |
| New refrigerated trailer | $200,000 | 8% | $4,055 | $936 |
| Same trailer, 30% balloon | $200,000 | 8% | $3,239 | $747 |
| New B-double set | $300,000 | 8.5% | $6,155 | $1,420 |
| Trailer 5 years old | $80,000 | 9% | $1,661 | $383 |
| Trailer 10 years old, private sale | $50,000 | 10.5% | $1,075 | $248 |
| Trailer 18 years old | $35,000 | 11.5% | $770 | $178 |
The balloon cuts the refrigerated trailer's repayment by about $820 a month. You then owe $60,000 at the end, and pay about $11,000 more in total. Our guide to balloon payments covers when that is worth it.
What moves your rate
The trailer's age
- New: around 7.5% to 9%.
- 5 to 9 years old: around 8.5% to 10%.
- 10 years and older: around 9.5% to 11%.
- Over 20 years old by the end of the loan: around 10% to 13%.
A private sale usually adds 0.25% to 1%.
How old it will be when the loan ends
This is where trailers differ from trucks. Most lenders cap a truck at 20 or 25 years old at the end of the loan. For a trailer, several go to 30 years. One even charges less for an old trailer than for an old truck.
There is a catch on bigger loans. At one lender, the 30-year limit only applies on loans up to $150K.
Your ABN
Two years of trading gets the best rates. On a new ABN, fewer than a third of our lenders will write it. Expect around 9% to 13%, and often a 15% to 20% deposit.
Owning a home
Without a home behind you, expect about 1% more on the same trailer. Several lenders also want 20% down.
With the prime mover or on its own
A trailer can go on the same loan as the prime mover, or on its own loan. If you are buying both, one loan means one application and one repayment. If you already have a truck loan, a separate trailer loan leaves that one alone.
A B-double set or a refrigerated trailer can push the loan over low doc limits. Many low doc loans stop at $250K. Above that, expect to give two years of financials.
What lenders want to see
The work
A lender wants to know the trailer has work to pay for it. A contract, a letter from the principal with your rate, or recent invoices all help. If you are adding a trailer to run more loads, show where the extra work comes from.
The paperwork
- Your ABN and GST registration.
- Recent BAS, or a letter from your accountant for low doc.
- Bank statements. At least one lender asks for them on every trailer.
- The trailer details: a dealer quote or invoice, or the seller's details for a private sale.
For a private sale, the lender will want the VIN, the registration and a PPSR check for any finance the seller still owes. An inspection report helps on an older trailer.
Tax on a financed trailer
Under a chattel mortgage, you own the trailer from day one. If the price includes GST, you claim it back on your next BAS. On a $200K refrigerated trailer, that is about $18,200. The interest in each repayment is deductible too, and you depreciate the trailer over its effective life. Check the details with your accountant before you sign.
Trailers are part of the asset finance we arrange for transport and logistics operators. For the truck, see prime mover finance. If you are starting out, see owner-driver truck finance. For more repayment numbers, see truck finance repayments.
If you have a trailer in mind, send us its details and how long you have been trading. 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.