Home
Contact Us
I receive many phone calls from fire departments throughout the country whose applications for grants have been denied. They feel that they are out of options, badly in need of acquiring replacement or additional apparatus, and do not know where to turn. Municipal financing is a choice that should be seriously considered. Often, potential buyers will tell me that their board officers will not allow their departments to secure an apparatus loan. However, financing the purchase can be a prudent decision when faced with the choice of not having the proper equipment to protect the lives and property of a community versus making an expenditure over a period of time. Utilizing a reputable lender, the process can be uncomplicated and rewarding. There are several key aspects in making a successful lease-purchase.
Before a department selects a particular apparatus, they should identify a reliable municipal lending institution. Most fire apparatus dealers should be able to assist you in identifying a trustworthy lender. This lender should discuss your department's plans, comfort level and other topics related to your financial situation. There are several ways to structure a loan. The lender will assist you in determining the best terms, payment options and interest rates available to you. A knowledgeable loan specialist will ensure that you receive tax-exempt financing meeting all IRS requirements. Additionally, in order for the invoicing, department of motor vehicle documentation, and proof of insurance to be processed in a timely manner, they should be familiar with your vendor's requirements.
Once your department has chosen a lender, you will need to provide them with organized financial statements, to include profit and loss reports, annual budgets, and a balance sheet listing your assets such as bank accounts, real estate and equipment. Most banks will require three to five years of financial information in determining how much your department will be able to borrow. As part of their service, an experienced loan broker will assist you in preparing these documents should you not have them readily available. Once the loan documents have been prepared, lenders require them to be reviewed by your attorney in order to protect the interests of your community. When the documents have been approved and signed, your department will be ready to give a payment authorization to the bank so that the funds will be disbursed to the vendor. You can then take delivery of your apparatus.
When considering the possibility of securing municipal financing there are two major benefits to keep in mind: 1) better protection for the department's personnel and the community in general when providing emergency services, and 2)the possibility of lowering the community's ISO rating, resulting in lower insurance premiums for property owners in your district. These two factors should more than offset the cost of a loan. If you identify a good lender and provide them with the basic information that they require, the process of securing a municipal loan will be a simple and enjoyable experience that will result in improving the emergency services in your community.
Paul is an Owner of Fire Trucks Plus with 30 years of experience in the fire apparatus sales industry.
Having been involved in fire apparatus sales for the past 30 years, one of the most frequently asked questions or FAQ has been, "Our department is surplusing our fire truck". "How do we determine an asking price?" Unfortunately, there is not a value guide or "Kelly Blue Book" to use as a reference due to the fact that the fire apparatus industry is a very small segment of the heavy duty truck market. That being said, determining the value of a truck is not an exact science. There are several factors to consider in pricing a used fire truck, including 1) a depreciation formula, 2) marketplace comparisons, and 3) desirability.
When calculating depreciation, begin with the original selling price of the vehicle when new. The average fire apparatus depreciates approximately 15% within the first year, 10% the following year, 10% the third year, 7% the fourth year, and 5% the fifth year. The depreciation rate decreases every year thereafter. Typically, fire trucks loose half of their value within the first five to seven years. Also factored in this depreciation schedule are the mileage and overall condition of the vehicle.
Recent sales are used for comparison purposes in determining the value of a truck. A market study of similar apparatus that are currently for sale is another way of establishing values. One can also compare the price of a similar new truck and apply the depreciation formula to the used truck.
It is also important to take into consideration the desirability of the apparatus. Specifications of the vehicle are a factor that determines a truck's desirability. For example, used tractor drawn aerials or ladder trucks are not highly desirable because they present problems with man-power and training. Any type of aerial that does not have a pump or tank presents this problem. Unless the aerial truck is a Quint, it will be especially difficult to sell as it becomes older. Another major factor in this is supply and demand. For example, there are many new or late model used tankers and brush rigs on the market. In order to sell this type of used unit a department must price its vehicle lower than the market value because there are so many available. The supply exceeds the demand in this case. Conversely, there is a greater demand and a smaller supply of heavy, medium and light duty rescues as well as all wheel drive Type II, Type III and rescue engines. A higher selling price can be applied to these types of apparatus.
Hopefully, this information has shed some light on the frequently asked question, "What is our fire truck worth?" And if in doubt, do not hesitate to call. We will be happy to help you with that FAQ.
In the past few years, I have noticed that the way to market, package and sell pre-owned fire apparatus has changed a little. In the day and age of gadgets and conveniences, we are finding that departments buying used equipment desire the same opportunity to purchase more of what they want and not necessarily what is available to them at the time in the marketplace.
One of the main reasons for this is that even small communities that do not have the budget to purchase a new apparatus have a sizable budget to purchase a late model used truck. Consequently, they require certain options that may not necessarily be on a truck that is on the market. To accommodate these needs of our customers, we at Fire Trucks Plus are retrofitting or adding features to late model apparatus.
For instance, some of the options we add to many of the trucks we sell include foam systems, special paint schemes, graphics, and cab air conditioning systems. Other items that can be easily installed or modified on a fire truck are seating arrangements, lighting packages, auxiliary braking systems, hose bed configurations, additional pump discharges and auxiliary intakes. Generator packages, scene lights and cascade systems are also popular additions. Shelving, slide-out trays, and tool-mounting systems can add to the payload capacity of a truck. Many of these features are fairly easy to install and may add only 10 to 20% to the base price of the vehicle. These items can greatly improve the performance and efficiency of the vehicle.
Previously, it was not cost effective to make certain improvements because the value of the used trucks did not warrant adding the systems onto the unit. Now with the late model apparatus holding a decent value while at the same time creating substantial savings for a community when considering used versus new, it makes sense to add some options. These features can increase the overall value of the truck while making it more suitable for your department's application.
So the next time you are looking at an advertisement for a truck that may not be exactly what you want in the way of options but the basic truck is fairly close, consider having your dealer add some features that will make the truck more custom to your application.
It is always important to identify an honest and capable dealership whenever you are considering purchasing used fire apparatus. This is especially critical if you desire to have the apparatus retrofitted. Ask the dealer or broker you are working with if they are interested in or have the capability to make the necessary changes to get the truck's specification closer to what you need. Be sure that they have experienced technicians that can fabricate or install the items or systems you have chosen. Plan ahead during your purchasing process and identify a truck and a trustworthy dealer who is capable of making any modifications you may require, and you will find that is worth the wait in the end because the apparatus will always suit your needs.
| © 2008 Fire Trucks Plus |  |
Site by WCES |