Fire Truck Help

Fire Truck Help

Low interest fire truck lease a bad deal?

How can it be possible for a department to get a 0% interest rate for their fire truck and it turns out to be a bad deal?

Let me share the story of fire department who learned that lesson.

A fire department replaced their first out engine 15 years ago and financed the purchase with a 0% loan for 25 years.

What seemed like a great deal at the time as turned into a nightmare for this department.

Today, 15 years later, the truck is requiring major repairs.  It may actually make sense to replace the truck rather than keep repairing it. It still functions as their first out truck and is becoming undependable.

The problem is that the department owes more on the truck than what it is worth today.  And the department has not saved any money for the truck because they have to dedicate so much money each year for repairs.

So to replace the truck, they have 1 of 2 choices:

  • Keep putting more and more money into repairs for a truck that is getting less dependable for the next 10 years, or
  • Sell the truck and write a check to payoff the loan and then finance the new truck without any down payment.

Key thought

Leasing a fire truck involves more than just a low rate.  The decision should be viewed as part of the department’s entire strategy and future plans.  Choose a leasing term that will help you into the future.

Otherwise, you may find yourself with the lowest rate but in a untenable financial position.