How Much is That Fire Truck?
Published: 4/25/2023
Author: Billy Claunch, Vice President, Brindlee Mountain Fire Apparatus

The challenge in managing a fleet of fire trucks is identifying the true total cost of ownership. The components include:

* Spec development and procurement
* Purchase price
* Financing
* Maintenance
* Repairs
* Liquidation value

How much time do you spend considering what type of truck and options to purchase? What about time spent talking with salespeople, researching online, going to trade shows, or talking with other fire departments to determine what they are doing? Beyond these, you want to validate the capabilities of manufacturers and dealers, so you orchestrate factory tours and other visits. All of this takes time - and has costs.

Of course, the actual purchase price of the truck is an important consideration. Because they are so customized with thousands of options, pricing can vary dramatically making the spec process of designing the fire truck critical.

Once you have settled on a design, how do you actually buy the truck? Do you select, and then negotiate with a specific manufacturer? Do you bid? Do you use a cooperative procurement program? 
With financing involved, considering the cost of capital is a significant portion of the overall cost. While financing costs is beyond the scope of this column, there are basic items to consider:

* Closing fees
* Interest rate on the borrowed funds and term
* Prepayment penalties

There is an inherent cost of ownership with anything. Fire trucks are no different; therefore, maintenance costs are important to consider. With a fire truck’s duty, on-going service repairs are simply a fact of life. After all, that fire apparatus is really your department's work truck which means there is going to be wear and tear that will drive expenses year after year. As the fire truck acquires years, miles, and hours of use, the repair costs can escalate particularly in the future years of service.

With these total costs identified and knowing that it is a cycle that repeats itself, how can you lead your fire department down a better path? A path that provides not only future budget clarity at liquidation, but most importantly, helps you with an apparatus replacement plan to get the optimal value for existing fire apparatus - and then have the best new fire trucks for your firefighters and your citizens?

The answer is a guaranteed deferred valuation or buy-back program. With this approach, you get a firm price agreement when you are ready to retire today’s fire apparatus. A guaranteed buy-back program will provide certainty so you can know your total investment cost in advance and be better positioned to get maximum value later.

So as you consider the total cost of fire truck ownership, think about a guaranteed buy-back strategy that will clearly help your budgeting, and make sure you have a replacement plan for converting existing apparatus into new fire trucks. For more information about buy-back solutions, visit us online, email or call 256-264-5014. 


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