Wednesday, September 28, 2016

Great questions to ask when leasing a fire truck

Over the past couple of weeks, I talked about having trust with your fire truck financing partner, some questions to ask to learn if they know what they are doing, and also the questions you should not be asking because it shows you don't know what you are doing.


So, what are the great questions I've heard from fire departments?

Here are some of the best questions I've ever heard in my career:

  1. We have a payment budget of X dollars, how can we use that amount the best way?
  2. How much will it save us to have a shorter financing term within our budget rather than financing longer and plan on paying off early?
  3. What is the best time of the year to make our payments?
  4. We have X dollars for a down payment now and will have more next year when the truck finally delivers, so how can use that better?
  5. We have a loan that pays off in a few years, what can we do to incorporate that change in our budget?
  6. We estimate that our next large purchase will happen in X years from now, how should we structure our financing now to help make that purchase easier?

Why these are great questions

They are questions that will help your fire department dramatically.  When you are thinking this way, you will pay a lot less for financing (our research shows 22% less!), have more resources for your next truck or purchase, and will leave your fire department financially stronger in the future.

Summary

The difference between the "have" and "have not" fire departments is in the questions they ask.  And the information they receive in the answers to those questions.  And what they do with that information.  So, start asking the right question to build your department's financial future.

Stay safe!
John R. Hill
President
First Bankers

Wednesday, September 21, 2016

What questions to not ask when leasing a fire truck

Leasing a fire truck is something that most people don't do very often.

Over the past few weeks, we talked about finding a partner you trust and the questions to determine that trust.

So, when you find a fire truck leasing partner you trust, what should you ask them?

Here's the questions I hear from everyone:
  • What's the rate?
  • Can we prepay?  Is there a penalty?
  • What other fees do you charge?
 But those are questions that let the bank know you don't know what you are doing.

Because financing a fire truck is much more complex than those 3 questions.  Those questions work fine when financing a car or house where your options are very limited.

But financing a fire truck is more complex. There are more options - in fact, there are 7 instead of the 3 options for a car or house.

Summary

Financing a fire apparatus is more complex than financing a car or house.  And if you only ask the car or house questions, you will miss things.  Next week, I'll share the questions you should ask.

Stay safe!
John R. Hill
President
First Bankers

Wednesday, September 14, 2016

How to choose the right fire truck financing partner

Last week, I wrote about trust.  And how trust in the person who finances your fire truck will help you. A lot.

But what should you ask to find the best fire truck financing or leasing partner?

Remember, most fire trucks are financed for a long time.  So, that means you are choosing someone who will be in your life for many years.

Here are some questions to ask and see how you like their answers:

  1. How many fire trucks have you financed in your career?
  2. What can you share about the fire truck industry that I don't already know?
  3. What steps do you take to help me identify ways to lower my borrowing cost?
  4. Or avoid a common financing mistake?
  5. How will you finance this truck so we are financially stronger when we need to buy the next truck?
  6. How can you help me determine if the prepay discount offered by the manufacturer is a good deal?
  7. How much flexibility in options can you offer our department?
  8. How will you guide me in the cost and benefits of each potential option?
  9. How much do you know about government or volunteer fire department finances?
  10. Finally, what can you do that will be different from everyone else? 

Summary

These questions will help you differentiate potential partners.  You will get a good sense of who you can trust and is capable when you hear their answers.

Stay safe!
John R. Hill
President
First Bankers

Wednesday, September 7, 2016

Why bad fire truck financing happens

Why do fire departments get bad financing deals?

I've thought about that a lot lately as I've talked with a past customer of mine.

And I've come to the conclusion that trust is the issue that hurts fire departments most.

What I mean by this is that fire departments view their relationship with a banking firm as adversarial - a person who is trying to take things away.  They see the transaction as "zero-sum" - one person has to win and one person has to lose.  So, they withhold information and try to play the financing game against a professional.

Here's the problem with that thinking

Your relationship with your bank should be like your doctor.  You share what you are trying to do.  The bank (doctor) then should share their knowledge with you  based on their experience.  You will then have a win-win best experience.

Because, no matter how much you think you know, the banker always knows more.  They do this every day.  They see what happens down the road and how to avoid issues.

And, when you withhold information, the banker will have to guess or just make decisions for you.  And those guesses or decisions may not fit what you are trying to accomplish.  And you don't find out until later so you think the bank cheated you in some way. But, in fact, they just did not have all the information they needed.

Summary

When you finance a fire truck, find someone you trust.  And then share with them what you are trying to accomplish.  Just as you wouldn't withhold your medical concerns from a doctor and expect him to cure you, it's unreasonable to withhold information from a banker and then expect them to share some best options for you.

Stay safe! 
John R. Hill
President
First Bankers