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  1. #1
    New Member
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    May 2012
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    3
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    Tolland , CT
    Tractor
    Mahindra 3616 HST

    Default 3.99 vs 0%

    I talked to many dealers before purchacing my tractor & many had told me that if I was planning to pay off my tractor early that I was better off going with the 3.99% financing & taking the rebate. I called Mahindra finance & found out that any extra money cannot be applied towards the principle unless you TRIPLE your payment. What???. This was not one dealer that was misinformed, every Mahindra dealer was telling me the same thing. Why is Mahindra not informing their dealer network of this? I am only posting this for Mahindra buyers to be aware that if you were to double your finance payment that you are only advancing the payment schedule & that while paying off your tractor early, you are saving nothing. As a matter of fact you are probably paying more in the long run. This should be made more clear.

  2. #2
    Platinum Member
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    Nov 2008
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    643
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    Brampton, On\lot Powassan, ON Canada
    Tractor
    Kubota B4200\MF 135\Kubota B3200

    Default Re: 3.99 vs 0%

    I looked at the financing aspect with a local Mahindra dealer, we went through the different options and I recall him mentioning specific rates if one wanted to pay off the financing earlier. (Forgot the term he used) Financing was through Agra-Credit or something like that. Maybe different up here in Canada?
    Unimogdave

  3. #3
    Veteran Member kiotiken's Avatar
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    Aug 2011
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    2,094
    Location
    Dunrobin, Ont
    Tractor
    2012 Kioti DK45 HST Cab

    Default Re: 3.99 vs 0%

    Again, maybe a Canada vs US difference, but I can currently borrow money against my secured line of credit at 3.49%, and bank prime shouldn't be going up anytime soon. I would look at that as an option, you can pay back as much as you want, when you want. I've only used the line of credit for the purchase of a car but what I did was figure out the payment it was take to make it disappear in 4 yrs, set that up as a regular payment, and then made payments on top of that when the opportunity came up. No penalties for early payment and in an extreme case, you could drop to interest only if you found yourself in an unexpected bind.

  4. #4
    Bronze Member
    Join Date
    Feb 2012
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    66
    Location
    SE Oklahoma
    Tractor
    Mahindra 4035 HST, Bradco 485 Backhoe, WoodMaxx WM8M Chipper, Mule 610, ASW TW650

    Default Re: 3.99 vs 0%

    Quote Originally Posted by bzue207x View Post
    I talked to many dealers before purchacing my tractor & many had told me that if I was planning to pay off my tractor early that I was better off going with the 3.99% financing & taking the rebate. I called Mahindra finance & found out that any extra money cannot be applied towards the principle unless you TRIPLE your payment. What???. This was not one dealer that was misinformed, every Mahindra dealer was telling me the same thing. Why is Mahindra not informing their dealer network of this? I am only posting this for Mahindra buyers to be aware that if you were to double your finance payment that you are only advancing the payment schedule & that while paying off your tractor early, you are saving nothing. As a matter of fact you are probably paying more in the long run. This should be made more clear.
    When I bought my 4035 I financed it through Mahindra Finance. After reading your statement above, I got out my contract and read through it. I believe your statement that extra money goes towards principal only if you make "Triple your payment" is incorrect. If you make two payments in one month, you DO save something as you are taking payments off the back end of your loan. Their method of calculating any possible refund of unearned interest charges is a little vague, but you certainly would not end up paying more than you would have just made your payments according to your loan schedule.

    What was your other option to taking the 3.99% financing with the rebate? The current financing deal was not in effect when I bought mine last month. But my dealer offered me three prices - a cash price, a 2.99% price for 84 months and a 0% for 72 months price. But the sales price increased with the length of the financing. I certainly knew this, because nothing is free, not even 0% financing. While my choice of the 0% financing for 72 months cost me more $$$ for the purchase price, ultimately it was going to be less than if I had taken the 84 month financing. Given the 0%, there is no incentive to pay it off early so I have nothing to worry about.

    My word of advise to anyone who has a question about financing anything - a tractor, a car, a house - is to talk to the actual lender just like you did bzue207X. My Mahindra dealer was a nice enough guy, but he was certainly NOT a financial expert! I doubt that Mahindra is "failing to inform their dealer network" as much as it is a case of the dealers being experts in tractors and implements and parts and service. Like I said, they are not financial experts. (When my dealer could not answer a question for me about the required insurance coverage on my tractor, I called Mahindra, who gave me a contact in the company that actually underwrites their insurance. After a few minutes of talking with that person, I had the answers to my questions. But if I had relied on my dealer - or even the rep with Mahindra in Houston - I would have come away with incorrect information regarding the insurance.)

  5. #5
    Super Star Member murphy1244's Avatar
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    Nov 2011
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    16,374
    Location
    Ohio
    Tractor
    Kioti DK 40-Massey ferguson 135-Ventrac 4500 Diesel

    Default Re: 3.99 vs 0%

    [QUOTE=bzue207x;3220767]I talked to many dealers before purchacing my tractor & many had told me that if I was planning to pay off my tractor early that I was better off going with the 3.99% financing & taking the rebate. I called Mahindra finance & found out that any extra money cannot be applied towards the principle unless you TRIPLE your payment. What???. This was not one dealer that was misinformed, every Mahindra dealer was telling me the same thing. Why is Mahindra not informing their dealer network of this? I am only posting this for Mahindra buyers to be aware that if you were to double your finance payment that you are only advancing the payment schedule & that while paying off your tractor early, you are saving nothing. As a matter of fact you are probably paying more in the long run. This should be made more clear.[/QUO

    to TBN
    Murph ------------

  6. #6
    New Member
    Join Date
    May 2012
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    3
    Location
    Tolland , CT
    Tractor
    Mahindra 3616 HST

    Default Re: 3.99 vs 0%

    Quote Originally Posted by lantxinok View Post
    When I bought my 4035 I financed it through Mahindra Finance. After reading your statement above, I got out my contract and read through it. I believe your statement that extra money goes towards principal only if you make "Triple your payment" is incorrect. If you make two payments in one month, you DO save something as you are taking payments off the back end of your loan. Their method of calculating any possible refund of unearned interest charges is a little vague, but you certainly would not end up paying more than you would have just made your payments according to your loan schedule.

    What was your other option to taking the 3.99% financing with the rebate? The current financing deal was not in effect when I bought mine last month. But my dealer offered me three prices - a cash price, a 2.99% price for 84 months and a 0% for 72 months price. But the sales price increased with the length of the financing. I certainly knew this, because nothing is free, not even 0% financing. While my choice of the 0% financing for 72 months cost me more $$$ for the purchase price, ultimately it was going to be less than if I had taken the 84 month financing. Given the 0%, there is no incentive to pay it off early so I have nothing to worry about.

    My word of advise to anyone who has a question about financing anything - a tractor, a car, a house - is to talk to the actual lender just like you did bzue207X. My Mahindra dealer was a nice enough guy, but he was certainly NOT a financial expert! I doubt that Mahindra is "failing to inform their dealer network" as much as it is a case of the dealers being experts in tractors and implements and parts and service. Like I said, they are not financial experts. (When my dealer could not answer a question for me about the required insurance coverage on my tractor, I called Mahindra, who gave me a contact in the company that actually underwrites their insurance. After a few minutes of talking with that person, I had the answers to my questions. But if I had relied on my dealer - or even the rep with Mahindra in Houston - I would have come away with incorrect information regarding the insurance.)
    Thanks, I am going back to the dealer tomorrow & talk about the financial options again. My original thought based on what I was being told was to take the 3.99 & pay the tractor off in about half the time but after talking to Mahindra finance I feel as though the 0% is a better option. I appreciate your added insight.

  7. #7
    Silver Member deathtoblackberries's Avatar
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    Mar 2013
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    227
    Location
    Battle Ground, WA
    Tractor
    Kubota B2920

    Default Re: 3.99 vs 0%

    Take the 0% the dealers are wrong. I ran the loan numbers yesterday, the break even point is 20 months. If I pay off the tractor on my 20th payment the total I will have paid is about the same with either 0% or 3.99% financing. Pay off the tractor before the 20th payment and I save money with the 3.99% financing vs the incentives I give up with the 0%. Pay off the tractor after the 20th payment and I lose money with the 3.99% vs the 0%. Over the life of the loan I would lose only the $1,500 in incentives with the 0% but would pay $3,694 in interest for the 3.99%.

  8. #8
    Platinum Member Reyer Farms's Avatar
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    Sep 2012
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    630
    Location
    Lena, ms
    Tractor
    Mahindra 5010

    Default

    I thought they get their interest up front on the payments. The longer the loans goes on the more principle you pay in each payment. When I looked at it it was better to finance third party and take the cash to dealer. I do know that for the most part it is a number shuffle that they are going to make money at.

  9. #9
    Elite Member Coyote machine's Avatar
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    May 2009
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    4,213
    Location
    Southern VT
    Tractor
    '10 Kioti DK 40se/hst KL-401 FEL, loaded tires, KB-2485 bhoe, Tuffline TB160 boxblade, Woods QA forks, MIE Hydraulic bhoe thumb & ripper tooth, Igland 4001 winch, & GR-20 Log Grapple. Woods BBX72" Mower. Diamondplate aluminum canopy.

    Default Re: 3.99 vs 0%

    On some level what the OP is saying is there is a penalty for prepayment because the loan assumes for the lender a certain return over a certain period. Paying down early accrues less interest which is NOT what the lender wants; too bad for the consumer.
    I can't speak to tractor loans in particular on pre-payment penalties, BUT in many states the law says one cannot be penalized for paying down a home, car?, loan. If you do pay down early on interest or principal, or both make sure to get bank receipts proving each payment so at the end you can verify the actual amounts. Banks do make mistakes !! HA ! HA!, banks make mistakes, now that's funny!
    2010 DK-40se/hst, Kioti KL-401 FEL, (with reversible Kioti cutting edge), 72" Ratchet Rake. Fit Rite Top-N-Tilt hydraulics & diverter valve. HLA Series 2000 7' snowplow, Aquiline MPC rear chains.

    Scag Wildcat: Kawasaki 26HP, with bagger system. Dr. brush mower, & 42" lawn deck, Dr. self propelled, 6.5HP Trimmer mower. Pro-Mow 3 gang mower, no HP.

    Bunch of STIHL chainsaws: 011x 2, MS192T, MS200T, MS180C, MS230, MS270 (Wood Boss), 038 Farmboss, '86 anniversary edition.

  10. #10
    Bronze Member
    Join Date
    Mar 2012
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    79
    Location
    Nickleville, Pa
    Tractor
    Mahindra 5035HST

    Default Re: 3.99 vs 0%

    I discussed this heavily with my dealer when I bought. I ended up going with 0% for 60 months on my 5035HST. I got a $1,000 rebate, applied to the price, a "Dealer days" $400 rebate and a $250 Military rebate (I got a check in the mail for those two as they could not be applied to the loan). I also took advantage of the "Power Package" deal and got a discount on a cutter and box blade, plus the dealer took off another 10% because I bought the tractor from him. I also got the rear tires filled with beet juice, with another discount as well.

    I know all the discussions about 0% not being 0%, and it isn't, but cash price only gave a $2500 rebate. Going with the 0%, the only extra cost was a $560 "buy down" that was put into the loan. That's it. No other extra fees or costs above and beyond normal.

    If I had chosen 3.99% for 72 months, the payment was only going to be like $22 a month less, but for 12 more months of payments.

    I got out the door with a 5035HST, front bumper/guard, FEL, 7' HD cutter, 7' HD box blade and filled tires, after taxes and fees for $35,000 and some change at 0% interest for 60 months...and got $650 in rebate checks a month later. I put no money down at all.

    Had I gone with 72 months at 3.99% I would have ended up paying closer to $40,000 in the end. I didn't even look at payment for 84 months.

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