Factoring for car haulers: how it works, what it costs, and when to skip it.

How factoring works

• You deliver and invoice. The BOL signed at delivery and the rate confirmation go with the invoice.
• The factor buys the invoice. It pays you most of the amount now, often the same or next day.
• The broker pays the factor. A notice of assignment tells the broker that the factoring company now owns the right to be paid, so the payment goes to the factor instead of you.
• The factor keeps its fee and, if it held back a reserve, pays you the rest when the broker pays.

For car haulers the payer is usually a broker, but auction companies and dealerships that hire you directly can be factored too.

What it costs

Published rates, from factoring companies' own pages and trade press:

• 1.5% to 3.0% of the invoice (1st Commercial Credit), plus 1% for a fuel advance.
• 2.5% to 3.5% for most carriers, as low as 1% (OTR Solutions).
• Roughly 1% to 5% of the invoice across the market (FreightWaves, September 2026).

The rate depends on your volume, how creditworthy your brokers are, whether the factoring is recourse or not, and how fast you want the money.

On a real load: the $1,400 load in our worked example pays net 30 by ACH. Factored at 3%, it costs $42, which is part of why that load nets $542, not $584.

Factoring is a cost per load. Count it before you claim, not after.

Advance and reserve

The advance is the share of the invoice paid up front. A trucking factor's glossary puts most advances between 70% and 95%, with the rest held as a reserve until the broker pays; some factors advertise 100% with no reserve, minus their fee. Same-day or next-day funding is a common promise. Compare offers on what lands in your account and when, not on the headline rate.

Recourse or non-recourse

• Recourse: if the broker does not pay, you owe the advance back. Usually the cheaper rate.
• Non-recourse: the factor takes the loss if the broker cannot pay because of its credit. Read the contract: "non-recourse" usually covers a broker's insolvency, not a dispute over damage or a missing document.

When to skip factoring

• COD and instant pay. If the receiver pays at delivery or the broker pays instantly, there is no invoice to wait on and nothing to factor.
• Quick pay from the broker. Many brokers offer to pay early for a fee. Compare it with your factoring rate, load by load.
• A cash cushion. If you can carry 30 days of fuel and pay, every percent you do not give away is net profit.

Paperwork is what slows factoring down: factors ask for the signed BOL with every invoice, and a missing signature or an unclear damage note holds up the money. What goes on a car hauler BOL.

Payment terms in every net on loadez

On loadez the payment terms are a line in every load's net: 3% on ACH and net terms that you factor, 2% on quick pay, 0% on COD, cash and instant pay. So on Growth, a COD load and a net-30 load at the same rate rank differently on the board, as they should. The BOL and photos come back the minute the receiver signs, and on Starter and up the invoice is made from the same load. Pricing.

Common questions

How much does factoring cost for car haulers?

Factoring companies publish rates of about 1.5% to 3.5% of the invoice for most carriers, and trade press puts the market range at roughly 1% to 5%. On a $1,400 load, 3% is $42. The rate depends on volume, your brokers' credit, recourse or non-recourse, and funding speed.

What is the difference between recourse and non-recourse factoring?

With recourse factoring, you owe the advance back if the broker does not pay. With non-recourse, the factor takes the loss if the broker cannot pay because of its credit; it usually does not cover disputes over damage or missing documents. Recourse is usually cheaper.

Do car haulers need factoring?

Only for loads paid on net terms. COD and instant-pay loads leave no invoice to wait on, and many brokers offer quick pay for a fee. Factoring makes sense when waiting 30 days for payment would leave you short for fuel and pay, and its cost should be counted in every load's net before you claim it.