Fire Truck Financing: The 1st must-answer question

Last week, we talked about how bad decisions are made when the two key answers are not discovered. We'll look at the 1st answer today.

1. What is the best way to finance this truck?

This question and its answer starts long before you are ready to borrow money. It should start about the time you are starting the process of designing and bidding a truck specification.

A high-quality answer includes analysis of:

1. Should you finance the truck (or get a grant or pay cash)?
2. What terms are available? Will those terms allow a payment you can afford?
3. Should you pay a down payment on the truck? (Do you have enough savings?)
4. What other major purchases will be necessary during the repayment period?

When you have analyzed these issues, you'll have the answer to the best way to finance your truck. And you'll be a more knowledgeable borrower and borrow at lower rates because you'll be controlling the process.

Summary
Start early to figure out the best plan to financially pay for a new truck. These plans should start about the time you are starting the truck buying process. By asking key questions, you'll get a high-quality answer.


Stay safe!

John R. Hill
Apparatus Budgeting Consultant
ENVIZION Financial
www.envizionfire.com

Fire Truck Financing: The 2 must-answer questions

There are 2 answers that you must have to make financing your truck the best experience possible. What happens that goes wrong? What are the answers you need?

Mistakes happen because most fire departments mix up the the questions and they get jumbled answers. So they use bad information to make critical decisions.

The 2 answers are:

1. What is the best way to finance this truck?
2. Who is the best person to finance this truck?

How this decision gets jumbled.
Most departments call around and ask for the "best rate" or "best deal" from a handful of banks and then choose based on this limited analysis.

So, the department is forced to accept whatever terms are offered and who to finance is chosen based upon the "best deal".

So, what is the way to avoid mistakes? How should these answers be discovered?
We'll look at both of these answers over the next two weeks.


Stay safe!

John R. Hill
Apparatus Budgeting Consultant
ENVIZION Financial
www.envizionfire.com

Fire Truck Financing: How bad decisions are made - Part 2

Bad financial decisions don't just happen, they are born and nurtured by people. People like you. Last week, we looked a 3 traits that become the cause of bad financial decisions. This week will look at 2 more.

Trait #4 - Not trusting the authority

When you finance a fire truck, you are doing something that most people lack the experience to do well. So, it seems essential to have and trust someone with the experience to help you.

A common mistake is to select an authority that you don't trust. If this is the case, find someone else! Lacking a trustworthy, knowledgeable person on your team (even if not part of your department) will help create bad decisions.

Trait #5 - Not financing as part of the big picture

It's hard enough to figure out the best way to finance this truck without adding the extra work of setting the stage for the next truck purchase. Yet, failing to create a big picture plan to buy this and your next trucks is the beginning of the next financing mistake.

It's key to think about what trucks will be made during the term and planning accordingly.

Summary
Bad decisions don't just happen, they are created by actions or inactions and decisions or lack of decisions.


Stay safe!

John R. Hill
Apparatus Budgeting Consultant
ENVIZION Financial
www.envizionfire.com

Fire Truck Financing: How bad decisions are made

The problem with bad financial decisions is that you never know how bad the decision is until much later. We'll look at some common traits about how bad financial decisions get made.

Trait #1 - Not starting soon enough
It's normal to want to put off the boring or scary decisions. It's fun to engineer and design a truck on paper and it's not fun to figure out how to pay for it. So, what happens is that financial decisions are made later and only to support the fun decisions to buy the truck. So what happens is that the truck may be too expensive relative to the budget and your department becomes truck-rich but cash-poor.

Trait #2 - Bidding for information
This is a very common occurrence. I see bids all the time that have a very loose request for financing proposals and then also include a statement asking for any better ideas.

Just as you don't bid a truck that way, you shouldn't bid for financing that way. You leave yourself open to many tricks and games from people that have learned how to win bids - not provide the best financing option for you. Learn what you want before you bid and make your bid a quality request for proposals - not a way to collect information and knowledge.

Trait #3 - Being too focused
This is the opposite problem to the second trait. Sometimes, departments get so focused on 1 thing - the lowest interest rate, the date of the first payment, how many years, as some examples - that they miss the opportunity to learn and develop a better financing choice. Be assertive in gathering information and ideas to help you understand what borrowing will cost you.

Summary
We'll look at the final 2 traits that cause bad financial decisions next week.


Stay safe!

John R. Hill
Apparatus Budgeting Consultant
ENVIZION Financial
www.envizionfire.com