Equipment Financing for Trucking Companies: Trucks, Trailers and Reefer Units
How trucking companies finance Class 8 trucks, dry van trailers, flatbeds, and refrigerated units. Understanding equipment financing as the core product for trucking growth.
Equipment financing is the lifeblood of trucking. A new Class 8 truck runs $150,000-$200,000. A dry van trailer costs $35,000-$55,000. A refrigerated trailer with a functioning reefer unit can hit $75,000-$100,000. Few trucking companies can write those checks from operating cash flow.
Understanding how equipment financing works — and how to get the best terms — directly affects your profitability and growth capacity.
Trucking Equipment Costs in 2026
Current market pricing for common trucking equipment:
| Equipment Type | New Price Range | Used Price Range | Useful Life |
|---|---|---|---|
| Class 8 Sleeper (Freightliner, Kenworth, Peterbilt) | $165,000-$200,000 | $60,000-$120,000 | 10-15 years/1M miles |
| Class 8 Day Cab | $140,000-$170,000 | $45,000-$90,000 | 10-15 years/1M miles |
| Dry Van Trailer (53') | $38,000-$55,000 | $12,000-$28,000 | 10-20 years |
| Flatbed Trailer | $35,000-$50,000 | $10,000-$25,000 | 15-25 years |
| Refrigerated Trailer | $65,000-$85,000 | $25,000-$50,000 | 10-15 years |
| Reefer Unit (Carrier, Thermo King) | $25,000-$40,000 | $8,000-$20,000 | 8-12 years |
| Tank Trailer | $80,000-$150,000 | $30,000-$70,000 | 20-30 years |
How Equipment Financing Works
Equipment financing uses the equipment itself as collateral. This secured structure means:
- Lower rates — Typically 7-12% for qualified borrowers vs. 12-25% for unsecured loans
- Higher approval rates — Collateral reduces lender risk
- Longer terms — 3-7 years matched to equipment useful life
- Lower down payments — 10-20% typical vs. 20-30% for unsecured
- Title transfer on payoff — Lender holds title until loan is paid
Loan vs. Lease
Equipment loans build equity — you own the truck when paid off. Leases may have lower payments but often cost more long-term and include mileage/condition restrictions. For most trucking companies, loans are the better choice.
New vs. Used: The Financing Difference
Financing terms vary significantly between new and used equipment:
| Factor | New Equipment | Used Equipment |
|---|---|---|
| Interest Rates | 7-10% typical | 9-14% typical |
| Term Length | Up to 7 years | Usually 3-5 years |
| Down Payment | 10-15% | 15-25% |
| Approval Speed | Often faster | May require inspection |
| Age Limits | N/A | Usually 10 years or under |
| Mileage Limits | N/A | Typically under 500,000-750,000 miles |
| Warranty Impact | Manufacturer warranty included | Varies; extended warranties available |
Used trucks can make financial sense despite higher rates. A 3-year-old truck at $100,000 with a 12% rate may cost less than a new truck at $175,000 with an 8% rate — especially if you can handle maintenance in-house.
Financing Requirements by Equipment Type
Different equipment types have different financing considerations:
Class 8 Trucks: The core asset. Most lenders have extensive experience and competitive programs. New trucks from major manufacturers (Freightliner, Kenworth, Peterbilt, Volvo, Mack) finance most easily. Used trucks require age and mileage within lender limits — typically under 10 years and under 750,000 miles.
Dry Van Trailers: Long useful life makes these attractive to finance. 53-foot trailers from Wabash, Great Dane, or Utility finance easily. Used trailers often finance with less scrutiny than used trucks.
Refrigerated Trailers and Reefer Units: More complex because they combine trailer and refrigeration unit. The reefer unit has a shorter useful life than the trailer. Some lenders require the reefer unit to be financed separately or evaluate combined value carefully.
Reefer Financing Tip
When financing a reefer trailer, ensure the loan term does not exceed the refrigeration unit useful life. A 7-year loan on a trailer with a 5-year-old reefer unit creates risk of owing money on equipment that needs replacement.
Real-World Scenario: First Fleet Expansion
The situation: An owner-operator with one paid-off truck has been in business 2 years, generating $180,000 annually. Secured a dedicated freight contract that requires a second truck.
Equipment need: One Class 8 sleeper truck. Considering new ($175,000) vs. used 2-year-old ($115,000).
The financing: Applied for equipment financing on a 2-year-old Freightliner Cascadia with 180,000 miles.
Terms received: $115,000 financed at 10.5% over 5 years. Down payment: $15,000 (13%). Monthly payment: $2,475.
Why used won: Monthly payment on new truck at 8% over 6 years would have been $2,795 ($320/month more). Over 5 years, the used truck costs approximately $148,500 total vs. $168,600 for new over 6 years. The savings offset higher maintenance costs on the used unit.
Key factors: Strong personal credit (710), two years of clean operating history, paid-off existing equipment, and a signed contract demonstrating the revenue to support the new truck.
This scenario illustrates a common decision framework. Your optimal choice depends on your mechanical capabilities, risk tolerance, and specific equipment options.
Down Payment Strategies
Minimizing down payment preserves working capital but increases monthly payments and total interest:
- 10% down — Best for strong credits; maximizes cash preservation
- 15-20% down — Standard range; balances cash preservation and payment size
- 25%+ down — May be required for newer businesses or weaker credit; reduces rate
- Trade-in value — Existing equipment value can serve as down payment
- Progress payments — Some dealers accept deposits while equipment is ordered
Dealer Financing vs. Independent Lenders
Truck dealers offer financing, but it is not always the best deal:
| Factor | Dealer Financing | Independent Lender |
|---|---|---|
| Convenience | One-stop; handles everything | Separate application process |
| Rates | Varies; may mark up for profit | Often more competitive |
| Negotiation Leverage | Bundled; harder to separate | Clear equipment vs. financing negotiation |
| Speed | Often faster | Usually 2-5 days for approval |
| Flexibility | May require their financing for discounts | Finance any equipment from any source |
| Used Equipment | Limited to their inventory | Finance private sales or auction purchases |
Always Get Outside Quotes
Even if you plan to use dealer financing, get quotes from independent lenders first. Knowing market rates gives you negotiating leverage, and sometimes dealer financing beats the alternatives.
Owner-Operator vs. Fleet Financing
Financing requirements differ based on your scale:
- Owner-operators (1-2 trucks) — Personal credit dominates; expect 15-20% down; 2+ years experience preferred
- Small fleets (3-10 trucks) — Business financials matter more; may get fleet discounts; 10-15% down possible
- Mid-size fleets (11-50 trucks) — Commercial underwriting; master agreements for ongoing purchases; best rates available
- Large fleets (50+ trucks) — Corporate financing; bond market access; may bypass traditional equipment lenders
What Equipment Lenders Evaluate
Beyond standard credit metrics, equipment lenders for trucking assess:
- Operating authority age — How long have you held your MC number?
- Safety record — CSA scores, out-of-service rates, accidents
- Existing equipment — What do you currently own and owe?
- Equipment being financed — Age, mileage, condition, manufacturer
- Use case — How will the equipment be used? High-mile OTR vs. local delivery?
- Insurance adequacy — Sufficient coverage for the financed equipment
Common Equipment Financing Mistakes
Avoid these patterns:
- Overbuying — Financing more truck than your freight supports
- Ignoring total cost — Focusing on monthly payment instead of total interest paid
- Skipping inspection — Not getting used equipment inspected before financing
- Mismatched terms — 7-year loan on equipment that will need replacement in 4 years
- Dealer-only quotes — Not shopping rates from independent lenders
- Balloon payments — Lower monthly payments but large sum due at end; creates refinance risk
The Upside-Down Trap
Owing more than equipment is worth (being "upside-down") limits your flexibility. If the truck breaks down or freight rates drop, you cannot sell without bringing cash to close. Keep loan balances aligned with equipment value.
Equipment financing is how most trucking companies grow. Understanding your options, shopping rates, and matching terms to equipment useful life keeps your cost of capital manageable and your fleet expanding.
Ready to explore equipment financing for your next truck or trailer? Liminal connects trucking companies with equipment lenders who understand the industry. The matching process is free, takes 2 minutes, and does not affect your credit.
Ready to explore your options?
See what financing you qualify for in minutes — no impact to your credit score.
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Read more →Important Disclosure
Not Financial Advice: The information provided in this article is for general informational purposes only and does not constitute financial, legal, or professional advice. You should consult with qualified professionals before making any financial decisions.
No Guarantee of Financing: Liminal Lending Co. is a business loan marketplace that connects borrowers with third-party lenders. We are not a lender and do not make credit decisions. Submitting an application does not guarantee approval or funding. Loan terms, rates, and availability vary by lender and are subject to borrower qualifications and lender criteria.
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Rate Information: Rates, terms, and fees mentioned in this article are estimates based on publicly available information and may not reflect current market conditions or specific lender offers. Actual rates depend on creditworthiness, business financials, and lender policies.
Information May Change: Financial markets, lending regulations, and economic conditions are subject to rapid change. While we strive to keep our content accurate and up-to-date, information in this article may become outdated. Always verify current rates, terms, program availability, and regulatory requirements with lenders and official sources before making financial decisions.