Fire Truck Manufacturers Prepayments - The Basics To Consider

1. Fire Truck Make Fire Truck Manufacturers Prepayments - The Basics To Consider January 13, 2019 Do you ever wonder why Fire Trucks Manufacturers UAE Fire Trucks Manufacturers UAE offer prepayment discounts? And the financial implications of prepaying your fire truck? This article helps you understand why they offer discounts and how to analyze them. Why fire truck manufacturers offer prepayment discounts. Why fire truck manufacturers offer prepayment discounts. The first question I get asked from hundreds of fire departments is: Why do manufacturers even offer a prepayment discount? It seems like they are losing money. Well, they're not and I'll explain why in this article. It's the timing of the money. It's the timing of the money. Manufacturers spend a lot of money for wages, parts, and overhead during the construction of your fire truck. They won't get paid back this money until you pay them at delivery. So, the manufacturer has to borrow this money during construction and pays interest on this money. So, they offer a prepayment discount. So, they offer a prepayment discount. By offering a prepayment discount, the manufacturer is trying to entice you, the customer, to be the bank during construction. They are basically borrowing from you and "paying" you a discount instead of paying interest to their local bank. Usually, that discount is less than what they would have to pay the bank for interest. What should you consider before prepaying your fire truck? What should you consider before prepaying your fire truck? There are 2 parts to this question. There is a financial part - does it make financial sense to prepay the truck or, in other words, am I ahead money-wise when prepaying? Then, there is the personal comfort part that needs to be considered. Let's start with the second part. PDFmyURL easily turns web pages and even entire websites into PDF!

2. Neither a lender nor borrower be. Neither a lender nor borrower be. This is old advice but applies when you are asked to lend your fire truck manufacturer the money to build your fire truck. You need to answer the following very hard questions in your mind: Are you OK lending money to the manufacturer? Are you OK with the fact that you are taking on the risk of losing the money? What will I do if the manufacturer goes bankrupt? Or delays my delivery? These are questions that only you can answer for yourself. Regardless if the discount is a great financial deal or not, if you can't get comfortable with the fact you're lending money (and taking the risk along with it), don't do it. It will drive you crazy. Lending isn't for people who want safe. So, is it a good deal? So, is it a good deal? The other part of the prepayment analysis is about measuring if the prepayment makes financial sense. Is it a good deal? The answer is: It depends. Each discount and situation is different. How prepayment analysis goes wrong. How prepayment analysis goes wrong. The basic measurement if the prepayment is a good financial deal is: can you earn more money (or pay less interest if you need to borrow) than what the manufacturer is offering you as a discount? Most fire departments miss that part of the analysis. They think the discount is free. It's not. I've seen situations where the department actually loses money by prepaying a truck. Or where the discount of tens of thousands of dollars actually benefited the department by only a few hundred dollars. I am out of time in this article but will explore how you measure the true costs and savings of prepaying your fire truck in the article Fire Truck prepayments: Is it a good deal? For more information how you can get help measuring the true benefits of prepaying your fire truck, go to firetruckmake.com . Fire Trucks Equipment Fire Trucks Equipment Supplier In UAE Fire Trucks Manufacturers Fire Trucks Manufacturers UAE Enter your comment... PDFmyURL easily turns web pages and even entire websites into PDF!

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