Truck finance in New Zealand

The short answer

“Truck” covers a lot of ground in New Zealand. At one end is a small flat-deck or tipper that a car licence can drive, which someone might buy for a lifestyle block or for weekend work. At the other end is a heavy rigid or a truck and trailer unit, bought by a transport business, a contractor or an owner-driver.

Those two ends of the market are financed in different ways:

• A light truck for personal use is a vehicle loan. The lender looks at you: income, spending, other debts and your credit file.
• A truck for a business is business lending. The lender looks at the business, the contracts it has, the truck and the owner’s wider position.
• A heavy commercial truck is a different assessment again, usually handled by specialist asset finance lenders, and it is outside what a car-style referral can promise.

The rest of this page helps you work out which one you are, so you start in the right place.

What the law says about business-purpose credit

Consumer Protection explains that the Credit Contracts and Consumer Finance Act (CCCFA) is aimed at personal borrowing. Where credit is used for commercial or investment purposes, the contract is not a consumer credit contract, and the main protection that remains is against oppressive lender behaviour. Lenders may ask the borrower to declare the purpose.

Why this matters when you apply:

• Purpose is part of the application. Say truthfully whether the truck is for personal use or for a business.
• The checks can differ. The affordability inquiries a lender must make for consumer loans do not apply in the same way to business credit. That can mean a different process, and in some cases a stricter look at the business.
• Your protections can differ. Do not assume that rules that protect you on a car loan apply to a business truck loan.

If you are unsure which category you fall into, ask the lender before you sign, and read Consumer Protection’s page on the Act.

Light trucks for personal use

Some people want a truck for reasons that have nothing to do with a business: towing a horse float, carting firewood on a lifestyle block, moving a boat, or simply liking a flat-deck. If the main use is private, the loan is a personal one.

What a lender will usually think about:

• The size of the loan. Trucks cost more than most cars. A bigger loan means a higher income needed.
• The vehicle. Make, age, kilometres and condition. Unusual bodies or specialist builds can be harder to value and resell, and lenders are cautious about assets with a thin resale market.
• Whether the lender will take the vehicle type. Some lenders do not lend on trucks, or cap the weight or age they accept. Ask before you spend time on a particular truck.
• Your income and costs, as for any vehicle loan. Our low credit score page explains how a lender weighs a patchy file.

Fair Finance treats a personal-use light truck like any other vehicle loan. We cannot say whether a particular truck is eligible, because lenders decide case by case.

Trucks for business use

A truck bought for a business is usually secured against the truck itself, but the lender wants evidence that the business can pay for it. According to commercial brokers, that evidence tends to include:

• How long the business has traded.
• Financial records. Brokers say that for larger loans, lenders want historic accounts and sometimes forecasts. One New Zealand broker puts the point at roughly $150,000, above which lenders typically look at accounts, security, valuations and the owners’ wider financial position.
• Contracts. A start-up with a signed contract can be in a better position than one with only hopes.
• Deposit or equity. New businesses or limited credit history may be asked for more.
• The owner’s experience. In trucking, lenders may want to see that the person running the business has worked in the industry.
• Owner-drivers. Banks can be cautious about owner-drivers. A broker’s article describes non-bank lenders as more open, especially where the owner-driver has work from a large freight forwarder.

These are broker descriptions of the market, not rules. Each lender sets its own approach. If you are a sole trader or a small contractor, our page on business vehicle finance covers the documents lenders usually ask for.

Heavy commercial trucks are a different assessment

A heavy truck, a truck and trailer, or a fleet purchase is not a car loan with bigger numbers. The lending is assessed as business and asset finance, and the lender will want to understand:

• The asset. Age, make, body type, condition, valuation and how easily it can be resold. Brokers describe trucks from established suppliers as easier to place than less familiar makes, and unusual bodies as harder.
• The business. Turnover, profit, existing debt and how the truck will earn.
• The term. Brokers advise matching the loan to the economic life of the truck: a truck working double shifts wears out faster than a crane truck used a few days a week.
• Cash flow. Short terms that lower the interest rate can create cash flow problems, which one broker describes as mattering more than the rate itself.

We are a referral service for vehicle loans, and a heavy commercial truck purchase belongs with a business and asset finance specialist, who can structure the deal. We say this plainly because the sensible next step for a transport operator is a specialist adviser, an accountant and the lender’s own business lending team.

Licence classes: check before you buy

Whether you can legally drive the truck is part of the decision. The NZTA licensing guides say a full class 1 licence covers rigid vehicles up to 6,000 kg gross laden weight, and heavier rigid trucks need a class 2 licence. Combinations of a truck and a trailer have their own limits, and heavier combinations need higher classes.

Practical points:

• Check the weight rating of the exact truck. Do not rely on the seller’s description.
• Check the combination weight if you will tow a trailer.
• Do not borrow for a truck you cannot yet drive. Getting a class 2 licence takes time and money.
• Ask your insurer whether your licence class matches the policy.

Confirm the details on the NZTA website, because licence rules and temporary exemptions can change.

Road user charges and running costs

Diesel vehicles pay road user charges (RUC) by distance instead of fuel tax at the pump, and heavier vehicles pay according to their weight and configuration. NZTA publishes the rate tables. Work out the RUC for your truck’s weight and expected kilometres before you decide what loan you can carry.

The other running costs to count:

• Fuel, which on a heavy vehicle can be a large weekly cost.
• Insurance, including cover for goods and for use in a business.
• Servicing, tyres and certification.
• Downtime. A truck that is off the road is not earning.

A worked example (illustrative numbers only)

A small business owner is looking at a used light truck for $45,000, financed in full at an illustrative 12% a year.

Term	Weekly repayment	Total repaid
5 years	about $231	about $60,100
4 years	about $273	about $56,900

Add $200 a week for fuel, RUC, insurance and servicing and the five-year option costs roughly $430 a week before the truck earns a cent. If the truck brings in $700 a week of work after expenses, the numbers hold. If it brings in $450, they do not. Use your own figures in the repayment calculator. These numbers are invented to show the method.

Red flags

• A truck that needs a licence class you do not hold.
• A seller who cannot show the weight rating or the paperwork.
• Finance offered on a business truck with no written explanation of the purpose declaration.
• A balloon payment large enough to feel like a second loan.
• A term longer than the truck’s useful working life.
• Heavy commercial finance offered by anyone who has not asked about your business.

Cheaper or safer routes

• A smaller, older truck that does the job.
• Hire or lease for the first season, to learn the real running costs.
• A bigger deposit, by waiting and saving.
• An accountant’s view on whether to buy, lease or hire for your business. For tax and GST, start at the Inland Revenue website.

How Fair Finance helps

Fair Finance is a referral service, not a lender. For a light truck bought for personal use, you complete one application and we run one soft credit check, which does not affect your score, then refer you to a panel of approved New Zealand lenders. We cannot promise that any lender will take a particular truck or use, and nobody can promise approval. For a heavy commercial truck, talk to a business finance specialist. We are paid by the lender only if a loan settles, and that never changes your rate. You can start with the quick check.

Checklist

• Decide whether the truck is for personal use or for a business
• Check the weight rating against your licence class
• Work out RUC and running costs for your expected kilometres
• For a business truck, gather accounts, contracts and bank statements
• Ask the lender how it treats the type, age and weight of the truck
• Get the rate, fees, term and total repayment in writing
• Run a PPSR check on a used truck

General information only, not financial advice. Lending rules, licence rules and RUC rates change, so check the official pages below.

Sources

• Consumer Protection: Credit Contracts and Consumer Finance Act
• Consumer Protection: What lenders must do
• NZTA: Road user charges
• NZTA: Heavy vehicle road code, driver licensing system
• Finance New Zealand: Finance for trucks
• GVK Finance: Truck finance