0% doesn't always mean 0%

[LAWALLSTRACTOR]

It would appear that folks (buyers and sellers) are making this more difficult than it needs to be. The only 'true' purchase price of a product is the 'cash' price, and which is where all negotiations should begin, IMO. If you start anywhere else in the negotiation you may get tangled up in the seller's/manufacturer's web of deception (not all, but some), at which point the true cost of the item is often clouded by discussions of monthly payments, special interest offers, etc., all in an attempt to make the cost appear more affordable to the buyer, but which frequently results in a higher purchase price. I say, start with the real price (cash) and if you need financing then discuss those terms separately, and calculate the additional cost of such, to determine if it is at a lower cost through the seller instead of obtaining financing elsewhere. Just my two cents.

I agree to some extent, but when financing comes into play, the only way to compare from one brand to another is to decide how many months you want to pay for it in, and compare the monthly payment for that many months. Between % rate, buy downs, and rebates, it only leaves the monthly payment for x number of months as an accurate comparison.

 

[headtide]

Galen, with all due respect, I think you just made my point...you're making it more difficult than it needs to be. The best way to compare anything, assuming you are comparing apples and not oranges to apples, is to first discover the true cost- the cash price, with everything else stripped away. This is not to say that you cannot do a cost comparison of monthly payments, but from a buyer's standpoint why would you want to do this and add complexity to the equation, and run the risk of becoming confused and overpaying? I understand this logic from a seller's point of view, but I am a buyer not a seller and want to know the real cost of what I am paying, so I can make an informed decision. There is a good reason why car dealers have been using the 'monthly payment' approach for years, and it is not to save the buyer money or to make the purchase more affordable- it is to give the appearance of more affordable and, therefore, make the sale...most often with greater profit to the seller. Respectfully submitted.

 

[LAWALLSTRACTOR]

If you are financing, and do it your way, you could verywell pay more for what you thought you were paying less. You would fall into the financing trap. As I said before the only way to find out what the true financed price of something is to add up the total of all payments, which is the same as monthly payment times however many months the loan is for. If you are financing, the financed price is what you are actually paying for it.

 

[DavesTractor]

I'm confused as to what the 0% adds to a machines cost.

I was quoted pretty darn close to the same price for three machines:
JD 1026R, Mahindra Max25, Kubota BX25
All configured with loader and backhoe.

I ended up going with the JD, partially because of dealer proximity, but after reading some of these posts I'm inclined to believe the Max25 was actually going to be 4000$ more if I'd chosen it. I never mentioned financing to anyone except a couple of the Deere dealers when I was ready to sign papers. If this is true, it would have made for a lot less hand wringing when I was trying to decide.

The 0% buydown on the Mahindra is on a sliding scale, since it doesn't cost nearly as much to provide 0% on a $15k rig as it does on a $40k rig. I believe the 0% buydown (dealer lingo for what we have to pay to go from 4.25% to 0%) is about $1375 on a Max series. None of the model buydowns are $4000. Dealers can set prices however they want and I guess they could charge more for the zero than it costs them, but that does not seem smart.

I just mention this as I don't want others to think there is a $4k price tag on 0% for 60 months. $1375 isn't bad for 5 years of financing a $15-20K rig. $23/month is what that cost. I spend more than that in coffee....

 

[rockshaft]

The 0% buydown on the Mahindra is on a sliding scale, since it doesn't cost nearly as much to provide 0% on a $15k rig as it does on a $40k rig. I believe the 0% buydown (dealer lingo for what we have to pay to go from 4.25% to 0%) is about $1375 on a Max series. None of the model buydowns are $4000. Dealers can set prices however they want and I guess they could charge more for the zero than it costs them, but that does not seem smart.

I just mention this as I don't want others to think there is a $4k price tag on 0% for 60 months. $1375 isn't bad for 5 years of financing a $15-20K rig. $23/month is what that cost. I spend more than that in coffee....

4000$ did seem like a stretch to me! But even so, 1375$ is something- and this discussion of financing buydown never came into play with either of my tractor purchases. I negotiated a price (no talk of cash or financing), and when I thought it was a price I was willing to pay, I agreed and asked for 0%financing. There is no buydown in my case- built into the package price? yeah certainly, but it's my opinion that comes from their end (dealer/manufacturer).

 

[jwcinpk]

Can someone answer this for me? Maybe Dave or Galen....If I walk into my dealer and am financing with Farm Credit Services, my main agricultural lender, is that not the same as paying cash to my dealer? I'm bringing him a check from FCS, but for some reason the price is the same as if I'm financing at standard rate?

 

[LAWALLSTRACTOR]

Hi, Joel
At this point in time, the cash and standard rate rebate are the same, so the price would be the same.

 

[DavesTractor]

Can someone answer this for me? Maybe Dave or Galen....If I walk into my dealer and am financing with Farm Credit Services, my main agricultural lender, is that not the same as paying cash to my dealer? I'm bringing him a check from FCS, but for some reason the price is the same as if I'm financing at standard rate?

In agreement with Galen, if you bring in cash or a check from the Bank of Whatever or Farm Credit, it all gets the cash discount. Currently if you finance with Mahindra's standard rate (about 5.8% ish) you also get the same cash discount. Where you lose the cash discount is when Mahindra is subsidizing the finance rate, such as the 4.25% and better, etc.

 

[LD1]

Kinda like buying down a mortgage with points:thumbsup:

 

[Bozmobile]

I'm very confused about the check you had to write for the financing. I just financed my new 3535 through Mahindra and it didn't cost me a dime. I was going to put down a pretty good size down payment but didn't because of the FREE money the were giving me. My monthly payments are 1/60th of the final price and I gave them nothing. The dealer mentioned somethig about a financing charge early on but said that I didn't need to pay it. I wonder if it was burried in the price of the tractor???