Here's what happened to themA new president called because a truck payment was due in a couple of months and they don't have enough money for the payment. He called to lower the payment. But there was no relief because of the decisions the previous administration made.
When the fire department financed their truck, they made 3 crucial errors. Errors which will probably mean they will lose their truck in a couple of months.
Here's the mistake they madeThe mistake has 3 parts.
First, they did not properly plan for the truck. They had saved little money so they financed almost the entire purchase.
Second, they choose the longest financing term. So now, a couple of years later, they owe a lot of money on a truck that has depreciated in value and they have no wriggle room to extend the term to lower their payments today.
Finally, they never had a plan. They did not see beyond the excitement of a new truck. They did not put this purchase as part of a bigger overall operational and financial picture.
So, they now have a truck that is a couple of years old that they can't pay.
SummaryIt's easy to lost sight of the bigger picture in the excitement of a new truck. But I get calls like this often, where the consequences of a poor decision come home to roost.
P.S. Next week, I'll share why this department could not get relief from a lower interest rate
John R. Hill