| Financing a new fire truck ranks among the | | | | If you answered "No" to all or most of these |
| largest financial decisions that most fire | | | | questions, it may make sense to borrow money |
| departments will make. It can be gut-wrenching to | | | | for your new truck. You may be losing buying |
| know what financial choice is right for your | | | | power by waiting to save and buy your truck and |
| department. | | | | will never catch up. You may not have adequate |
| This article will provide you with 5 Key questions | | | | cash reserves in place if you spend all your |
| to determine if financing is the right financial | | | | savings on a new truck (in other words, truck rich |
| method to purchase your fire truck or not. | | | | but cash poor). You have the correct mindset to |
| Each of the following 5 Key questions can be | | | | borrow funds. |
| answered with a Yes or No. | | | | What are my alternatives? |
| | | | Frequently, your answers will not provide a clear |
| 1. Do you have enough money saved to pay cash | | | | direction. Some departments may have both |
| for the truck? | | | | "Yeses" and "No's". In those cases, pay particular |
| 2. After paying for the truck, will you have at | | | | attention to your remaining cash reserves (if |
| least 6 months of revenue still in savings? | | | | paying cash for your truck) and your comfort |
| 3. Will you be paying earning a higher interest rate | | | | level. These are the vital components of your |
| on your loan than earning on your savings? | | | | financial and emotional readiness in committing to |
| 4. Have you saved funds for all your other | | | | a new fire truck loan. |
| upcoming future major purchases? | | | | If you don't feel your answers provide a clear |
| 5. Are you uncomfortable in committing your self | | | | financial picture of your readiness to finance a |
| to payments for the loan period? | | | | new fire truck, it may make sense to |
| What do your answers tell you about your | | | | aggressively pursue other financial sources to |
| readiness to borrow money for your new fire | | | | purchase your new fire trucks. Become serious |
| truck? | | | | about seeking grants or approaching the major |
| If you answered "Yes" to all or most of these | | | | stakeholders in your department about donating |
| questions, it makes sense to pay cash for the | | | | funds to buy a new truck. |
| truck. You have taken several steps to have a | | | | In summary |
| stable and solid financial condition. Namely, you | | | | In summary, understand the effects of borrowing |
| have been saving for the truck, you will maintain | | | | or not borrowing has on your financial condition |
| an adequate "rainy day" fund, using your funds to | | | | and psyche as you analyze your financing |
| buy a truck will be more economical than | | | | alternatives. By doing so, you'll leave yourself in a |
| borrowing money, you have prepared for your | | | | solid financial condition and will be comfortable with |
| next major purchase(s), and you'll sleep better at | | | | your decision. |
| night not being in debt. | | | | |
