What financing options exist for used commercial trucks and trailers?

There are more options for used commercial trucks and trailers than most owners realise. In Canada, you can usually finance a used unit almost the same way you’d finance new—terms, down payment, and documentation are what change.

Here’s a clear breakdown from a credit analyst’s perspective.

1. Equipment term loans (bank, BDC, and alternative lenders)

A term loan is the classic “truck loan” structure:

• A lender advances most of the purchase price of your used truck or trailer.
• You repay in fixed monthly payments over a set term (often 36–72 months, sometimes longer depending on age and mileage).
• The truck or trailer is the main collateral.

Banks and institutions like BDC offer equipment loans that can be used for new or used equipment, and some will even finance related costs (taxes, delivery, extras) on top of the purchase price.

Where this tends to fit best:

• You want full ownership from day one.
• You plan to run the truck for most of its useful life.
• Your credit and financials are strong enough for traditional underwriting.

If you want to ballpark payments before applying, you can plug numbers into Mehmi’s online finance calculator.

2. Equipment leases (finance / capital leases)

For many used highway units and vocational trucks, lenders will structure a lease instead of a straight loan:

• You make fixed monthly lease payments.
• The truck or trailer is titled to the lessor during the term.
• At the end, you typically have a small buyout (e.g., $10 or a small residual) if it’s a finance/capital lease.

In practice, these behave very similarly to loans, but can be more flexible for tax planning and for borrowers who want lower upfront costs. Canadian truck finance providers highlight leases as a way to spread cost, use the truck as collateral, and keep cash free for fuel, repairs, and insurance.

Typical features on used units:

• Terms often in the 48–60 month range, aligned with remaining useful life and mileage.
• Slightly higher down payment than new, especially for older trucks.
• Closer review of inspection reports and service history.

3. Lease-to-own / rent-to-own programs

Lease-to-own programs sit between a straight lease and a traditional loan:

• You operate the truck during the lease term.
• Part of each payment goes toward ownership.
• At the end, you buy out the unit for a small residual (often pre-agreed).

These can be handy for:

• First-time owner-operators.
• Drivers coming out of fleet jobs who don’t yet have strong business credit.
• Buyers with some credit challenges but solid driving and income history.

The trade-off is that total cost can be higher than a conventional A-credit loan, but it can be a realistic entry point into ownership.

4. Dealer or in-house used truck financing

Many Canadian dealers and truck groups have in-house finance desks or captive programs for both new and used trucks/trailers, and this is one of the two main “paths” BDC calls out for truck financing (through dealers vs. financial institutions).

Pros:

• Usually faster decisions and simplified paperwork at the point of sale.
• They understand truck values and can sometimes be flexible on structure.
• You may be able to roll in extras: warranty, maintenance, licensing, or minor reconditioning.

Cons:

• You’re tied to that dealer’s product and finance offer.
• Rates and fees may not always be as competitive as what a multi-lender broker can arrange.

At Mehmi, we’re in a hybrid position: we sell our own used Class 8 trucks and trailers and also work with 30+ Canadian lenders, so we can either finance units from our used inventory directly or shop your deal to outside lenders if that gets you better terms. If you’re unsure which path is best for your file, feel free to contact our credit analysts for guidance.

5. Private sale truck and trailer financing

If you’re buying a used truck or trailer from another owner or a small fleet (Kijiji, Facebook, word-of-mouth), many banks either won’t finance it or make the process cumbersome. That’s where alternative lenders and brokers come in:

• Specialized truck finance companies in Canada routinely fund private sale transactions as long as the documentation is clean (bill of sale, ID, proof of ownership, lien search, and usually a mechanical inspection).
• Terms and down payments depend heavily on age, mileage, and your credit, but the core structures (loan or lease) are the same.

This is a big part of what we handle at Mehmi—lining up lenders who are comfortable with private sales and making sure the paperwork protects both you and the lender.

6. Refinance & sale-leaseback of existing units

Once you’ve built some equity in your trucks and trailers, you can often use them to:

• Refinance at a better rate or longer term; or
• Enter a sale-leaseback, where a lender buys the unit from you and leases it back.

Because a paid-off truck is a business asset, it can be used as collateral for new financing, including working capital or additional equipment purchases.

This can make sense if:

• You want to lower monthly payments on older units to improve cash flow.
• You need capital to add another used truck or trailer to your fleet.
• You want to consolidate several older loans into a cleaner structure.

Mehmi does this under our refinancing & sale-leaseback solutions, often combining it with new financing so the overall fleet structure makes sense.

What lenders pay close attention to on used truck/trailer files

Regardless of the option you choose, underwriters will focus on:

• Age, mileage, and spec of the truck or trailer (and whether it’s a mainstream, remarketable brand).
• Inspection and condition reports (engine, transmission, brakes, frame, tires).
• Time in business and income history (bank statements, T1s/T2s, Notice of Assessment).
• Credit profile and past payment history on loans, leases, cards, and lines.
• Down payment and reserves—showing you have cash left after the deal closes.

If you’d like help deciding which route makes the most sense for your situation—loan vs lease, dealer vs broker, or whether refinancing part of your existing fleet could lower your overall payments—feel free to contact our credit analysts. We can walk through your scenario, run numbers through our financing & leasing programs, and help you structure a used truck or trailer deal that your cash flow can comfortably support.

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