3 Options of Horse Trailer Financing with Bad Credit
Before buying a horse trailer, evaluate your financial capabilities first. Even used horse trailers can cost as much as $10.000 to $15.000. More often than not people don’t have or are not willing to put down that much cash at once, and that’s when financing comes in play.
Here you have 3 options of financing a horse trailer even if you’ve got a bad credit under your belt. Each of these options assumes you’ve already found a suitable trailer for sale for a reasonable price and just want it to be financed.
Option 1: Owner financing
This approach is often neglected by most people, yet it may sometimes work out. This option is viable only if you buy from a private owner. Dealerships are ultimately unlikely to approve such deal, because it is seen as highly risky business one for them. You need to talk the seller into an owner financing option. This means both, you and the seller, settle on a certain monthly payment.
In other words, you will transfer an agreed sum to the seller’s account each month. While the seller is a private person, he can’t check your credit score but he sure will become suspicious of why you turn to him and not the bank. That’s why most sellers will turn your offer down, and those who agree are likely to demand a large down payment and a few large monthly payments thereafter. Also expect to pay some premium to the agreed price.
- No third party involved
- No credit score required
- Large down payments are possible
- Price premium, fewer and larger payments
Option 2: Bank
Horse trailer is an asset, so you can get a loan from a banking institution to purchase it. Browse bank offers in your area for the best financing terms for your trailer-to-be. As this discussion is about horse trailer financing with a bad credit, don’t expect lenders to be too generous. For many banks bad credit will be a firm “no” on such deals, while with others you may be offered high interest rates. Like for cars or any similar assets, lending institutions prefer financing new vehicles as they are easier to sell in a default case. Used horse trailers can still be financed, just be ready to accept a significant down payment.
- Longer financing period
- Moderate interest rates
- Credit score is a major factor
- Large down payment is very likely
Option 3: Leasing
You may be fortunate enough to find a leasing institution that will agree on a deal. Though just like banks, leasing companies have a tendency to turn down customers with bad credit. Luckily, some large horse trailer dealers might agree on a leasing transaction with no third party involved. Such transactions are called rent-to-own deals. Individual dealers charge the highest interest due to the fact that all risk is borne by dealers themselves.
- No third party involved
- No down payment required
- Very high interest
- No ownership rights over the trailer
As you can see, for all three options the major drawback is that you have to accept higher than average interest rates. Unfortunately, that’s the reality of modern life – you can’t expect favorable terms with a low credit score. The positive side is that there are still ways to find financing for a horse trailer even with bad credit.