Originally appeared in Fleet Owner

The myriad powertrain options available today further complicate the already complex truck specification process. The wrong decision, especially selecting the wrong powertrain, can impact profitability, so fleets should choose their financing sources carefully.

Choosing the right financing source can be an invaluable asset when it comes to helping fleet managers parse through all options to ensure each asset is optimally spec’d for its duty cycle, resulting in the lowest total cost of ownership.

Don’t let the lowest rates be your only consideration when choosing a financing source. The lowest rate does not always equate to the lowest cost.

Five questions to ask a potential truck financing source

1. Does the financing source understand the trucking industry?

Trucking is a vital part of the nation’s economy. Does the potential financing source understand the role of trucking in the broader economy? Does it understand the impact of downtime? Is it well-versed in trucking regulations, and does it know the technologies available, including powertrain options and advanced driver assistance systems?

2. Does the financing source understand your company?

Since no two trucking companies are alike, the right financing source will understand the ins and outs of your particular operation. The financing source needs more than a working knowledge of the duty cycles in which you operate, the areas in which you excel , and your challenges. Without a thorough understanding of your operation, the financing source cannot help you spec the vehicles properly and tailor a financing package that provides you with the lowest cost.

3. How long has the financing source interacted with the trucking industry?

Trucking is cyclical when it comes to both new trucks and used ones. You want to ensure the financing source you choose demonstrates commitment to trucking and will not exit the market at the first sign of trouble.

4. Does the finance source offer flexible financing options?

You want a financing source that will allow you to adjust asset life cycles—up or down—based on changing market conditions. In times of constrained supply, will you be able to extend asset life to keep operating? As newer technology comes on the market that could benefit your operation, will you be able to shorten an asset’s life cycle?

5. Is the finance source capable of performing a life cycle analysis?

Asset life cycles have a sweet spot for replacement, and the sweet spot varies based on duty cycle and application. Is the financing source able to use data analytics to determine what that sweet spot is so that your assets are replaced before they become inefficient and start costing you money?

You should evaluate potential financing sources carefully before choosing one that will be your strategic partner and help you successfully navigate the complexities of today’s trucking industry.