What's the first thing you ask when leasing a new fire truck? What's the rate?The rate is important but there are other things that are also important. This series will help you understand and ask about all the things that matter.
Why do I have to pay that?I have talked with departments who must pay every penny of interest even if they want to pay early. Other departments have to pay a huge fee to get a balance. For others, they can't pay off early until a certain date in the future which means they have to pay interest for money they don't really need.
How do these departments get into these and other similar situations?
Things that matter #2 - Terms and conditionsFinancing contracts are complex and wordy. And if you don't understand the terms and conditions of the contract you are signing, you may be surprised at what you agreed to do. There are some lenders out there that prey upon the inexperienced. You get hooked by a low rate but find out that you are liable for many other costs and charges.
SummaryRead the fine print. If you don't understand it, get someone who can. It's a smart decision that will protect your department. You'll save yourself a lot of potential grief later.
John R. Hill