0% was but is no longer truly 0%

[crazyal]

Last year Kubota had what they called their "customer instant rebate" for buying with cash or financing by someone other than Kubota. I think it was $1000 on the B, L, and maybe M series. I think Kubota gets a number of people who finance to buy Kubota insurance so they make a profit on the insurance.

 

[grsthegreat]

Last year Kubota had what they called their "customer instant rebate" for buying with cash or financing by someone other than Kubota. I think it was $1000 on the B, L, and maybe M series. I think Kubota gets a number of people who finance to buy Kubota insurance so they make a profit on the insurance.

i got a WHOLE LOT more than $1000 off for mine when i paid cash. Today sales are slow and cash is king.

 

[bigbull338]

i knocked off $2000 when i bought my tractor.

 

[vjd57]

Well I'm going to have to disagree w/ the nay-sayers on 0% financing. Times are tough as most of us know, I'm in NH and dealers are making a modest living at best, not a killing. I have been shopping for a midsize tractor since last August (new and used). I usually buy used w/ cash on big ticket items like trucks, cars, boats, snowmobiles . . . etc. and have saved money over the years, not this time, taking delivery on a new L45 this Thursday. Why new? 0% financing.

Now I know there is no such thing as a free lunch but I think I might have gotten a free breakfast. Tractor listed for $50,650 +/- w/ options, worked them down to $40,310 and got the 0% for 60 months. Put $500 down so payment is going to be just under $700/ month w/ insurance (yes they're making some money on insurance but its required to be insured while making payments). I looked at used ones in the $30,000 - $35000 range but when you figure in the cost of interest at say 6.99 % it ends up costing almost as much. I could pay $35,000 cash for a used tractor but would be living paycheck to paycheck so not thrilled about that.

Bottom line - I'm using their money at 0% (or whatever they have hidden in the price) and have plenty of cash on hand to do other things if I choose to. Tractor is under full warranty so no worries there for a while. Sorry guys just makes too much sense to me but then again I'm only an engineer not a financial advisor.:thumbsup:

 

[timswi]

I'm not sure who handles Kubota's credit...If it's Kubota, they can make the profit on the machine and insurance which is also cheap. If they aren't moving any iron, no money is being made anywhere...The finance charge is buried somewhere, but if interest rates rise I can guarantee you that the price won't drop.

Just bought a new truck and the captive finance company charged 4.5% and gave a $2500 cash rebate which is an effective rate of around 1% on my truck. The price was negotiated and sealed before financing was discussed, so this was not buried in the price of the truck...Same thing when I bought my RTV1100, price was sealed up before any discussions as to how I as going to pay for it..The dealer couldn't have cared less.

 

[ssmith general]

Just bought my Kubota last week.

There was a 1,000 rebate if you paid cash, that is where the finance charge is hidden. But, I paid 25k for my tractor, loader, trailer, and bush hog. That's about 3000 under the price if you add that stuff up. I have no problem with businesses making money for the products they provide. In fact, I want a company I purchase items from to be healthy.

Nothing is ever free, but I shopped around and the financing options at kubota are far superior to those I saw elsewhere.

 

[rjkobbeman]

Keep in mind there hasn't always been a discount for cash, so sometimes 0% is 0%. There may be costs padded in to cover the 0%, but if the guy paying cash pays the same price, the argument is moot.

 

[unbidden]

A few months ago Kubota started having a financed price and a cash price. Before that for quite awhile it was the same price cash or financed so back then 0% was truly 0%. With the cash discount then 0% financed price is no longer a true 0%.
I just ordered a B2320 financed at 0% for 60 months. If I had paid cash it would have been $700 cheaper. That works out to about 4% interest on the tractor I ordered. The discount is based on the tractor or RTV being sold. These machines can be $10000 apart with different models in the same series or with options. This means I paid a higher interest rate because I bought the least expensive model in the B series. If I had bought the B3030 with FEL MMM canopy and other attachments the interest rate would have equaled 2% or less. So, the amount financed vs the discount for that series tractor will determine the true cost of borrowing their money
This has been discussed before but it's different now than before because there is now an across the board discount for cash that was not there before.
In most cases the 0% interest for 60 months is still a good deal but take all of it (Finance the entire purchase and use your down pmnt for something else) to make it the best deal.

That is why I walked out of the Mahindra dealership; $1000 more to finance a SCUT. Ended up with a better deal from Kubota and no difference cash or %0 financed.

 

[MessickFarmEqu]

I'm not sure who handles Kubota's credit...If it's Kubota, they can make the profit on the machine and insurance which is also cheap.

KCC is a kubota owned company. I know no special knowledge to back this up, but I suspect that Kubota maybe somehow booking the cost of the loans in Japan where the cost of funds has been near zero for years because of the counties economic stagnation. Kubota's has been very unwilling to offer any cash discounts and the only reason for that can be that the loans are costing them very little to offer.


On the insurance. Those of you who have priced it noticed that its very cheap for what it is. We've been told several times that its basicly a break even venture ment to improve the quality of their loans. I don't see how they can be making a dime on it... heck we only make $25.

 

[JOHNTHOMAS]

A few months ago Kubota started having a financed price and a cash price. Before that for quite awhile it was the same price cash or financed so back then 0% was truly 0%. With the cash discount then 0% financed price is no longer a true 0%.
I just ordered a B2320 financed at 0% for 60 months. If I had paid cash it would have been $700 cheaper. That works out to about 4% interest on the tractor I ordered. The discount is based on the tractor or RTV being sold. These machines can be $10000 apart with different models in the same series or with options. This means I paid a higher interest rate because I bought the least expensive model in the B series. If I had bought the B3030 with FEL MMM canopy and other attachments the interest rate would have equaled 2% or less. So, the amount financed vs the discount for that series tractor will determine the true cost of borrowing their money
This has been discussed before but it's different now than before because there is now an across the board discount for cash that was not there before.
In most cases the 0% interest for 60 months is still a good deal but take all of it (Finance the entire purchase and use your down pmnt for something else) to make it the best deal.

Keep in mind there hasn't always been a discount for cash, so sometimes 0% is 0%. There may be costs padded in to cover the 0%, but if the guy paying cash pays the same price, the argument is moot.

Right!!
That's the reason I posted this. Pointing out that there has been a change. It was a true 0% interest charge on a purchase to the customer previously but with the new cash discount that has changed. It was a true 0% before because there was no discount for cash. Cash buyers were subsidizing us credit buyers. Us credit buyers were paying the same price as the cash buyers but our payment was spread out in equal monthly payments with no additional amount added for interest. It was interest free before as far as actual cost to an individual buyer of a specific Kubota with payments spread over a number of months.
This is not a philosophy statement, it's an accounting statement.
$18000 cash or 60 payments monthly of $300 for a specific Kubota tractor.
To say someone is paying it in higher costs or some way isn't relative to the statement of 0% interest.
Again, the true 0% is now gone with the cash discount being offered.