Dealer margins

[Anonymous Poster]

I recently read a post that was justifying a 700 mi round trip tractor purchase by indicating that the buyer was saving over $4000. How can there be over $4000 dollars difference between dealers on a $26,400 purchase? In Illinois you could sidestep $1650 in state sales tax by buying out of state. Is that how that individual paid so much less? I'm just curious, because I would like to save over $4000 on my next tractor purchase too. Is it legal to avoid paying tax by buying out of state? If it is illegal is it generally practiced anyway? Maybe I'm asking questions that are better off left alone.

 

[ejb]

My guess is that if you can find a $4000 difference between two identical tractors, you haven't haggled with the high priced dealer enough...s/he may not come all the way down to the lowest priced dealer, but I'd be willing to bet that with some work, it could get a lot closer.

No way one dealer sells for list and has all the sales s/he needs and another sells at a huge discount and isn't putting the first guy out of business...again, this all assumes identical tractor setups.

 

[hazmat]

<font color=green>No way one dealer sells for list and has all the sales s/he needs and another sells at a huge discount and isn't putting the first guy out of business...</font color=green>

This has been my experience. I priced a 4010 & 4110 & the dealer quoted me list minus the deere rebate (which I had to ask for). I told him flat out if he dropped it $1,000 I would sign on the bottom line, no deal. One reason I ended up with a New Holland, which despite similar MSRPs, was $2,000 cheaper than the comparable Deere.

 

[tdenny]

ben,

I too was assuming that the aforementioned $4000.00 savings might have included no sales tax.

I was going to purchase my new tractor in Oregon a state with no sales tax. For me the savings was enough to allow for a couple of extra implements and to pay for the trailer rental to and fro and the drive wasn't too far. Additionally, I just can't stand to give the government any more of my hard earned money than have to. Our property taxes are already out of sight.

I was going to spend approximately 15,000 or so on the tractor. In the State of Washington the sales tax is about 8.9 percent. Simple math here.

Well at least one dealer in Oregon mentioned to me that this is illegal and that Washington checks with companies that sell this type of machinery in neighboring states to see if they had any major purchases that have warranties registered in this state. Secondly this dealer also mentioned to me that local tractor dealers might turn you in or refuse to do any warranty work on your tractor. I'm not sure or not if that would be true as they might want other business of yours for implements and such.

I was told that the government slapped people that did this with "use taxes" that exceeded the current sales tax.

I ended up with a used in state tractor but not for fear of the state. It just worked out better for me.

 

[Gary_in_Indiana]

With tractors it's a little tougher to track than cars and trucks because there is no titling or registering for plates, etc., on them. Still, as I understand it the rule is you are required to pay a use tax on your out of state purchases. Here in Indiana they are the same 5% figure (soon rising to 6%). If that's part of the difference in pricing, it's hardly a fair comparison, especially when the local dealer has no control over it whatsoever.

 

[tdenny]

Gary,

You are correct - it is very hard to track compared to cars, boats, etc because of the licensing issues.

I suppose if it was counted in the mentioned comparison the buyer would simply be counting out of pocket expenses for himself. Agreed hardly fair to the dealer but substantial savings none-the-less.

I was just curious how a dealer in oh let's say Missouri could have the same unit for $4000 less than somewhere else. Not making any judgements either way. How they treating you out there in the midwest?

 

[Gary_in_Indiana]

I have no idea what the mark ups from cost to retail are on tractors and implements. If it's anything like cars and trucks a $26,400 price on a $30,400 list package isn't impossible at all, even without factory assistance with rebates, etc.

As to us in the Midwest, we're done with most of the big rains so now we'll go to bone dry for a couple months. Last week was really hot with temps in the upper 90's here. I know for lots of folks that's normal, but for here it's hot.

We had a big convention in town last week that was really fun. About 15,000 Goldwing motorcycles descended on the city for the 25th anniversary GWRRA (Gold Wing Road Rider Association) convention. It was truly something to see. These machines were absolutely gorgeous.

It was fun talking with folks from all over the US and Canada, too. They were and incredibly nice group of people, too. Not exactly the stereotypical "biker" image at all. /w3tcompact/icons/smile.gif Mostly it was couples (probably 98% or more) and probably an average age in the fifties. Hell's Angels they weren't.

I had to take my old Wing out and show them what a classic twenty year old bike could look like. That was back when you could really hang some chrome on them. /w3tcompact/icons/laugh.gif I got a lot of compliments on the old girl and it made me think I ought to take a llittle more time and dress her out some more. I got lots of ideas for newer light systems like ropes and strobes, etc. Maybe I can incorporate some of those onto my Deere, too.

Did you ever get your box blade? I am anxiously awaiting word on my rotary mower now. I have a real advantage being so close to the manufacturing facility in that it's probably cheaper for the dealer to have stuff drop shipped here than to his place. I seem to recall production on the mowers was to begin sometime early this month so I'm pretty excited about that. I'm sure I'll post some pics of it when I get it. I know you were looking for a new rotary mower, too, so maybe this'll help you with the CFO. /w3tcompact/icons/smile.gif

 

[dullpain]

TAXES

You may have heard that the Tennessee State Government shut down last week due to no money and the legislature could not get a budget passed. $400 MILLION shortfall. Watched all of the debate on local TV I could. Switched it off just prior to throwing up. The absolute biggest group of idiots I have ever witnessed in one place. A TRUE embarassment to our state. They wanted an INCOME Tax but they tacked on a 1% sales tax instead. They have been trying to pass Income Tax for 3 or 4 years now. Our SALES TAX goes to 9.75% on July 15. Outrageous.

Thanks for letting me vent.

"Well at least one dealer in Oregon mentioned to me that this is illegal and that Washington checks with companies that sell this type of machinery in neighboring states to see if they had any major purchases that have warranties registered in this state. "


I can tell you first hand about Tenn. I bought some furniture in North Carolina about 4 years ago. No tax. Had it shipped to me. As somebody else mentioned in this thread tractors aren't titled so no trail right. Well I do not know how the state of TENN found out about my furniture purchase but they did. Sent me a bill for taxes owed but graciously allowed me 3 months to pay it. And pay it I did. Still wonder how they did it but I believe all States are much more aggressive about recovering this type of revenue. Many want to collect "mail order taxes" now.

As far as Tractors, Implements, etc. in the state of TENN. if you own a farm and it is for agricultural production you can get a tax exemption. You must have a farm with a Farm # given by state to qualify. Therefore all my Tractor , Trailer, Implement, even parts for tractors are tax exempt.

May be worth checking into with your individual state dept. of revenue to see if you have that ability.

 

[cwave]

That $4000. might not be Apples to Apples - 1 dealer I got a bid from was for a standard Frontier blade vs a Land Pride blade. The 2 blades were not the same quality. When I went from dealer to dealer I was not able the compare the 2 bids - Some reasons - dealer in a hurry - Don't carry that line - good price on in-house equipment - (430 loader vs 420 loader) - (47 - 48 backhoe) - 60" vs 72" mower - Availability /w3tcompact/icons/frown.gif

 

[Anonymous Poster]

Help - I'm new here and have been looking at a compact tractor from a distance for about a year. I have just bought 9.25 acres, and we are in the process of clearing roughly 5 for lawn - (overgrown field with 20' poplar and swamp birch). I will have a fair amount of landscaping and obviously mowing duties. I would like to have the option of a backhoe, but have been told unless you use it weekly, save your money. I believe I need a rear finish mower, as I've been told a MMM will be a pain with loader operations. I'd like to use a Brush Hog at sme point, and possibly contract out for some small jobs. I think I want either a Kubota 3710 HST, a JD 4400 or a NH TC35D. Any thoughts???