The decision between financing a new or used truck involves more than just the sticker price. Interest rates, lender options, loan terms and the total cost of ownership over the finance period all factor into which is genuinely better value for your business.
Finance Rates: New vs Used
New trucks attract the lowest interest rates — typically from 6.1 percent per annum for prime applicants. Used trucks attract slightly higher rates, with rates increasing based on the age of the truck. A two to five year old used truck might add 0.5 to 1.5 percent to the rate compared to new. A truck 10 to 15 years old could see rates 2 to 4 percent higher. The rate gap widens as the truck ages because lender security risk increases.
Lender Availability
New trucks have access to the full lender panel — all major specialist lenders, second-tier banks and manufacturer finance arms. Used trucks have a wider variation: most specialist lenders finance trucks up to 10 years old at standard terms, trucks 10 to 15 years old are assessed individually, and trucks older than 15 years require a specialist lender willing to consider older assets. Fewer lenders means less competition and potentially higher rates for older trucks.
Total Cost of Finance
A new truck at $180,000 financed over five years at 6.5 percent versus a used truck at $90,000 financed over five years at 8.5 percent — the used truck has lower monthly repayments but higher total interest as a percentage of purchase price. The new truck may also qualify for zero deposit, while the used truck may require a 10 to 20 percent deposit. Running the numbers across both scenarios with a broker is the most reliable way to compare.
Depreciation and Residual Risk
New trucks depreciate fastest in the first two to three years. If you choose a finance lease or hire purchase structure on a new truck, the residual or balloon payment at the end of the term will reflect this depreciation. Used trucks have already absorbed the steepest depreciation, so the residual risk is lower — but the maintenance and operating costs are typically higher.
Which Should You Choose?
New trucks make more sense if: you want the lowest rate and widest lender choice, you plan to keep the truck for 5-plus years, you want warranty coverage and lower maintenance risk, or you want to claim maximum depreciation benefits with your accountant's advice. Used trucks make more sense if: your startup capital is limited and a lower purchase price is the priority, you need a truck immediately and don't want to wait for new stock, or the specific make and model you need is only available used.
Overdrive Funding compares lenders for both new and used trucks across the full lender panel. Contact us for a free comparison of your specific truck options.