As a fleet owner, the vehicles you operate are the lifeblood of your business. Keeping them on the road and running smoothly is essential. One of the biggest operating costs for a commercial fleet is tyres. The average tyre only lasts around 20,000-30,000 kilometres before needing replacement. With frequent stops and heavy loads, fleets tend to experience even more rapid tyre wear.
Hence, having a tyre financing program in place can help you effectively manage this significant expense. Tyre financing is a loan option that allows fleet owners to finance the purchase of new tyres for their fleets over time through regular payments rather than paying the full amount upfront.
Read on to learn more about the role of finance in tyre industry and how it can benefit your transportation company.
Reduce Upfront Costs
The main role of finance in tyre industry is spreading out the cost of new tyres over time via a loan. Instead of paying the full replacement cost all at once from your pocket, you can apply for tyre financing from a provider and repay them through predictable monthly payments. This helps avoid large, unexpected hits to your operating budget.
Tyre financing provides funds upfront so you can purchase all the tyres you need without tapping heavily into working capital. This leaves you with more cash flow available to cover other operating costs and invest in additional equipment or drivers.
Customise Payment Plans
Not all fleet owners have the same budgetary needs. With tyre financing, you can customise a payment plan to fit your individual circumstances. Options may include:
- Length of loan term - Choose 12, 18, 24 or 36 months
- Down payment - Minimise initial outlay with a lower down payment
- Payment amounts - Select weekly, bi-weekly or monthly payments
Work with your tyre financing provider to create a schedule that gives you financial breathing room. This tyre finance impact is that it helps you get the tyres you require for continuous operation without breaking the bank.
Access Volume Discounts
When purchasing tyres in bulk for an entire fleet, you can qualify for substantial volume discounts from manufacturers and dealers. However, a lack of capital can make it difficult to pay for dozens or hundreds of tyres upfront to get better pricing.
Tyre financing provides you with the lump sum needed to take advantage of volume deals. Paying wholesale prices can result in considerable savings compared to buying a few tyres at a time at higher retail costs. With tyre financing, you gain the bargaining power of high-quantity orders without fronting all the money yourself.
Include Costs of Maintenance Services
Tyre financing can do more than just cover the cost of buying tyres. You can bundle the costs of tyre-related maintenance services into your package. This may include:
- Mounting and balancing
- Wheel alignments
- Tyre rotations
- Tire Pressure Monitoring System (TPMS) servicing
- Emergency road service
Rolling maintenance costs into your financing helps project and account for the full scope of expenses associated with running tyres. There are no surprises down the road when unexpected service needs arise.
Account for Multiple Locations
Managing tyres across a widespread fleet with vehicles in different cities or regions can prove challenging. Tyre financing gives you a central way to budget for and purchase tyres that takes the headache out of long-distance logistics.
Rather than arranging individual purchases from the same dealership, you can coordinate delivery and service across all your locations, simplifying the process considerably.
Avail Specialty Options for Specific Industries
Fleets in industries like mining, logging and waste management operate rigorous duty cycles on aggressive terrain. Tyres sustain substantial damage from sharp rocks, heavy debris and caustic chemicals.
Many tyre financing providers cater to the unique needs of these high-stress environments. They offer specialised offers designed to withstand punishment that comes with higher purchase costs as a result. Financing makes it possible to readily secure these heavy-duty tyres your extreme applications demand.
Why Work with a Specialised Lender
You may consider covering tyres under your general business loan or line of credit. However, specialised tyre sector funding providers offer distinct advantages tailored to your specific needs, including:
- Industry expertise to understand commercial fleet challenges
- Ability to structure flexible payment options
- Relationships with tyre manufacturers and dealers
- Streamlined application and approval process
- Potential for better rates through tyre-only financing
For the best financing experience, look for an established tyre sector funding institution that offers products related to tyres and fleet management. Their market knowledge and specialisation in this purchase category make the financing process smooth and simple.
How to Qualify for Tyre Financing
Qualifying for tyre sector funding largely depends on your business’s financial health. Financial institutions will review factors like:
- Time in operation: Minimum 1-2 years recommended
- Annual revenue: Minimum average of ₹25-50 lakhs
- Credit score: Minimum score varies, but 650+ is usually preferred
- Existing debt obligations and available cash flow
- Number of vehicles in the fleet
- On-time payment history with vendors
Note: It's important to note that qualification criteria can vary for each lender. Nothing is fixed, and requirements may differ on a case-by-case basis.
Having well-organised records will help demonstrate your business is a safe bet. Be ready to provide documentation like bank statements, tax returns, financial statements, owner information and vehicle titles.
Conclusion
Don’t let worn tyres disrupt your deliveries, waste fuel or put your drivers at risk. With tyre financing, you can outfit your entire fleet with fresh rubber on a manageable budget. Your vehicles will spend less downtime in the shop and more productive time on the road where they belong.
Explore financing options for your tyre needs today and keep an eye on the latest tyre financing trends. The right loan helps keep your wheels in motion while conserving your capital for other crucial business aspects. Your fleet is the backbone of your company. Invest wisely through strategic tyre financing to keep it performing at its best.
