deputyrpa
Gold Member
Wasn't it Harry Truman who said, "If you took all the economists in the world and laid'em end to end, they'd point in all directions?"
I'm not sure....but that means that at least one of them got it right.
Wasn't it Harry Truman who said, "If you took all the economists in the world and laid'em end to end, they'd point in all directions?"
Well lets just hope I am way wrong about this...
I just got a fax from Agricredit (financers of Kioti products and many other brands of equipment) and rates went up like you wouldn't believe..used equipment was apox 8.5-9.5% Now they are up over 11%.
Okay so now you woundering what this means..
Well these nice financing rates that the manufactures are offering are buy down rates from the banks.
So if the standard rate is 7.5% manufactures have to take money out of their profits and use that to buy the rates down to the attractive 0% and so on.
Long story short I think rates are going to go up quit a bit and we may loose the 0%
Now keep in mind I am speculating.
If this happens I think we as equipment dealers are going to be in a world of hurting.
This coupled with some of the biggest price increases I have ever seen it the equipment business make me scratch my head.
Right now the only thing driving customers in is the attractive financing.
If we lose that I'm not sure how we will be able to sell.
Even this year my profits were cut a little bit because of fuel cost and now we can't afford to be taking more out of our pockets for buy downs.
Hmm I,m starting to sound like the Big 3 car manufactures!
I hope I am wrong and you all make fun of me but I think this time we may be faced with some challenges.
As of today I do not see my dealership disolving because of how dieversified we are but it will hurt a little.
I am not in a positioin that I would want to be in these times. I am in the first few years of a large real estate purchase and in the second year of building my house. Although I am currently enjoying a low farm credit mortgage rate which nets ~2.25%, I need to finish the house, get a C of O and lock in to a low fixed rate. Unfortunately, I underestimated the cost of construction due to skyrocketing building material and fuel costs. That has left me with a credit load in addition to the mortgage. They will be folded in upon closing of the mortgage, but it is more of a monthly burden that I had planned.