Financing Cash Purchase versus 0% Financing

[smstonypoint]

I took the 0% in July and NO money down... I had about 3K but opt out of putting anything down. Insurance was a must with the loan but I would have gotten it anyway.. I have insurance on everthing NO matter a loan or not. Now-I might be different I could not add to my homeowners-dont live on the property and where I do live I couldnt say I use the tractor there.I trailer it ALL the time so not a bad deal for me at $13.00 a month. I only pay the $13 monthly for the life of the loan..if I pay it off early the insurnace stops once the loans paid off.. It is Kubota insurance

AndyG

Andy,

Thanks for the info.

So you are saying that the insurance is available only to those who finance through Kubota and is available only during the financing period?

Steve

 

[beppington]

Doesn't Kubota require insurance on the tractor if fully financed?

They did for me.

I think pretty much all lenders (tractor, car, home, etc) require insurance for the item(s) they're lending money on.

 

[beppington]

... some members indicated that they enjoyed the peace of mind that they get from being debt free.

I would absolutely enjoy the debt-free piece of mind ... unless it has a monetary cost :thumbsup: which in my tractor purchase, it did; i.e. in my own calcs (yours are over my head, & it's too late anyway :laughing it was cheaper to to do the 0% loan.

Now, I should say, as I mentioned in my other response ... Going with Kubota's 0% loan required me to buy insurance for the 5-year life of the loan. Had I paid cash for the tractor instead, I'm not positive I would've opted for any insurance. So, it could be said that Kubota Financing "helped" me make the probably-wiser decision to go ahead & get insurance. Thank you, Kubota Financing :thumbsup: :laughing:

 

[Agrantina]

Andy,

Thanks for the info.

So you are saying that the insurance is available only to those who finance though Kubota and is available only during the financing period?

Steve

Not sure-- if I paid the loan off early Kubota would still insure it? It is built in the monthly note right now, so if I paid it off I guess I would have to speak with them and pay a different way... Yearly if that is possible?

BUT-wait if I pay it off earlier than the 60 months then that really messes your example up? :confused2:

AndyG

 

[smstonypoint]

BUT-wait if I pay it off earlier than the 60 months then that really messes your example up? :confused2:

AndyG

:laughing:

It's an example and could be modified to accommodate such a situation. The cash purchase price becomes your outstanding loan balance and the present value of financing can be calculated using your monthly payments over the remaining life of the loan.

Steve

 

[Johno Geo]

It is always interesting to read the discussions on cash vs credit and I suspect smstoneypoint is an economist with a great deal of "Book lernin" in economics.
There are many factors to consider before choosing cash or finance. Some are financial, some are emotional....
I suspect most people simply do not have the capital for a cash purchase, so finance is the only option. If the cash price can be negotiated down sufficiently to offset the "O " percent financing, then go for it....maybe.
There is also the concept of, "Preservation of Capital", meaning... don't spend all of your cash as you may not be able to get your hands on more, should you need to.
If the O percent 60mo is the same as cash, then it is always the finance.
IMHO.....

 

[Johno Geo]

My tractor is covered by my Home Owners insurance (WI) as is other personal property. Further, I work on my Indiana property, it is still covered.
There are some exceptions , such as: if it is stored at a dwelling it is not covered.
I paid cash, but wanted this expensive item covered.
Also, get it in writting.
(Listen to guy with "Adam Smith's" pic... he has to be a serious $ guy)

 

[smstonypoint]

.....guy with "Adam Smith's" pic....

Actually, that is me. However, some say that I bear an uncanny physical resemblance to the gentleman.

Steve

 

[k3nn3y]

When I bought mine in July /2010 with 0% financing. Insurance is a requirement. Either thur Kubota or your agent. :thumbsup:

 

[bigbull338]

i got my tractor insured.