Financing 101

[PAB_OH]

I am looking at buying a tractor soon, not soon enough, but within the next 3-6 months. I am still wrangling w/ brand, etc... but I need to start looking at financing options. If I buy new which I really hope to do I'm sure it will be easy but I'm not sure who I should apply for credit with or how in case I want to buy used from a private party.

Anyone out there buy their tractor used? I was planning on putting a good chunk down on a new tractor but some unexpected expenses came up and ate most of the money. By spring I should have $2k+ to put on a tractor but I would still like to stretch the payments out. I will probably pay it off early but I want to know that if something happens like it did recently I will be able to make a low payment.

Should I just wait untill I have enough to put down on the tractor of my choice to make the payments low enough using a "conventional" 36-48 mont loan? I think I have found a REALLY nice tractor for a REALLY good price but it's privately owned and I don't have the cash to cover the full cost so I need to look at financing. Is it possible to get a used tractor financed as new if the hours are low enough?

TIA.

 

[HGM]

My recomendation would be to wait as long as possible to get exactly what you want. I see from your profile that you have 5ac. So, I'll assume you mean a compact or smaller tractor($10-12K new). All the MFG's have speciall financing deals to get you hooked, some go to 72mo. The financing is easy, payments would be reasonable and usually requre 20%dn.

I bought a Yanmar 2000, because I needed a small tractor for 2ac and maintenance of our hunting property. It fits my needs very well. The dealer I bought it from had a bank he used and I got the package deal of a new trailer, brush hog, box blade, used tiller and tractor(mid 70's) for much less than a new tractor the same size alone. Payments are higher used, but manable. Plus, used financing is typicaly only 36mo at the longest.

If you could use a home equity loan, you would also benifit from the tax deduction and reasonable rate for a used tractor. Personal loans are given a high rate, and are less desireable. DONT use a credit card. It may seem like a quick easy deal to get your tractor, but you'll pay much more in financing and likely never get it payed off, probably paying at least double for it over time.

 

[TC18guy]

In my area used compact tractors are hard to find and when you do they cost almost as much as new. I decided to wait and catch a 60 mo. 0% financing special from NH.

 

[PAB_OH]

They are hard to find in my area too. I found one and I think it's a pretty good deal though. Basically everything I want for about $4k less than new, including a trailer to haul it on. The only thing is it's not exactly "compact", more of a utility tractor I think. But like I said in my post over in the Kioti forum, my land is all open, no obstructions, and I plan to do some medium duty dirt work so a bigger tractor will be handy there.

Thanks for the advice so far. It helps tame the urge to buy "right now". I think I need to take a step back and look at the deal objectively and leave emotions out of the thought process.

Who knows though, I might end up with this one in the end anyway. I just need to make sure I know what I'm getting and that it fits my needs.

That is why I am

 

[MessickFarmEqu]

I would not wait, I fully expect the end of 0/36 finacning to come very soon.

 

[Panache]

Are you a member of a credit union or bank? Talk to them about financing. Mine were financed just like a car at the same rate.

 

[unreconstructed]

I guess I am a Dave Ramsey kinda of fella, but sometimes we want something bad enough to go into hock--just the way it is. Just my point of view--home equity loans make sense on paper when talking about income tax and interest rate, but from a philosophical point of view I think a paid for home provides a lot of security for one's family. Its bad enough that the local tax authorities have a life time lien on your castle without running up debt on the homestead. Again, my point of view with no offense intended to anyone.

 

[PBinWA]

</font><font color="blue" class="small">( I guess I am a Dave Ramsey kinda of fella, but sometimes we want something bad enough to go into hock--just the way it is. Just my point of view--home equity loans make sense on paper when talking about income tax and interest rate, but from a philosophical point of view I think a paid for home provides a lot of security for one's family. Its bad enough that the local tax authorities have a life time lien on your castle without running up debt on the homestead. Again, my point of view with no offense intended to anyone. )</font>

Amen to that! Dave Ramsey = good advice.

 

[Noodlearm]

I agree with Neil, as long as rates keep climbing like they have (and the fed seems to insist that they will), I don't see how these companies can keep the 0%, I am sure you will still find some pretty low rates but I think the 0% may be gone. That being said, if rates are still low enough and you don't need the tractor for a another 6 months, I don't see any sense in making 6 payments on something your not using. The payments wont go up that much even if you had to pay 5% (which is unlikely if financing new through the dealership) you would only be paying about $30 more per month on a 3 year $10,000 loan.

 

[unreconstructed]

I think interest rates will continue to climb, although at a slow rate. Greenspan has made some noise about the risks of the real estate bubble, especially for homeowners. I don't know if the continued increase in rates is to cool off speculation in the housing market but certainly it seems as if the fed is raising rates as is its standard inflation fighter. ( I would also caution against home equity loans given the current bubble in homesteads--again my opinion). I don't know anything about Greenspans replacement, but I don't guess it matters, after all, Greenspan was a gold standard guy back "in the day". /forums/images/graemlins/confused.gif /forums/images/graemlins/tongue.gif I wouldn't base a decsion on predicting the Fed though--that's kinda like figuring out the wife. /forums/images/graemlins/grin.gif