When you finance a fire truck, it's like an amatuer playing against a professional. Like you playing golf against Tiger Woods. You will lose. Most fire department makes at least one of five common financing mistakes. We'll look at each one in this series of articles.
Mistake #1 - Miss Key Financing Factors
If you call a bank and ask some variation of the question "What is your interest rate?", you're already on your way to making this very common mistake.
There are 7 Key Financing Factors that determine how much you pay to borrow money. When you ask this question, you are so focused on the 1 factor - the interest rate - that you will miss the other 6 factors.
And that can cost you plenty.
How do I know?
Well, every time I review financing offers, I usually find tens of thousands of dollars of wasted money. That is because I know to ask about all 7 factors and can compare all the factors equally among all the financing offers.
In fact, I can usually save twice as much money from analyzing the other 6 factors than finding the lowest interest rate.
It's not your fault
As I mentioned, you don't do this every day. You are an amateur and are talking to a professional (the banker) who does this every day. They know that if you are focusing on rate, you're missing the other factors.
Summary
The biggest and easiest way to waste money is to miss key financing factors. Learn all 7 factors and analyze them to get an apple to apple comparison.
Stay safe!
John R. Hill
Apparatus Budgeting Consultant
ENVIZION Financial
www.envizionfire.com
Wednesday, November 18, 2009
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