How to Sell tractor that still has balance on loan?

[peterc38]

In Ky a new none agricultural tractor purchase is taxed at 6% unless there is a trade in. The new sale price is reduced by the trade in price to determine sales tax on the difference. I have sold some Kubotas straight out but usually trade the old to Barlows and finance the new one at 100% and take my equity out in cash. In my situation I have to get at least 6% more in a cash sale than a trade in to be equal. Barlows gives me a fair price on my trade ins and I've done several with him. Kubota also gives reduced interest on used Kubotas sold thru a Kubota dealer which is incentive for dealer purchase of used equipment.
The two check method should work fine if your buyer can feel secure doing it. KCC can be contacted for pay off for so many days and they sned your original note to pay document back to you when the debt is paid off. One warning is that you ensure the debt has been paid off or you will still be liable for the debt and a bad check to KCC will leave you still owing. If your buying a new Kubota from a dealer they may help you do the transaction and I'd give them some money for doing it myself. Have done some deals using Barlows and I always build in a couple or three hundred dollars for them since they handle all of it and the tax incentive for me is some times there. Also some buyers feel more securegoing thru a dealer.

Thanks John. We have 5% sales tax in Maine, so I agree I also need to consider that angle.

I'd be crazy to not consider input from a guy that has bought as many tractors as you have :laughing:

 

[fishheadbob]

When I bought my tractor from a private seller it was a 2 check deal. One to him, one to New Holland credit, but sales tax wasn't a factor as NY doesn't tax ag stuff. You ought to be sure what your state's position on tax in this matter is. I never bothered to change the title as NY and dealers don't seem to give a hoot. I had looked into trading the tractor in question and mentioned to the dealer that I didn't know if I could even find a title for it. He replied that most ag trades rarely had a title and it was no big deal.

 

[rbargeron]

........I called Kubota credit and didn't really feel like I got a complete answer. They did say to contact them when I sell and the payoff amount would be good for 15 days....... What is the best way to handle this with the buyer to protect both of us and to ensure that the buyer is not nervous......

Buyers are usually reassured by a clean title. Maine doesn't require tractors to be registered or titled. Your tractor's certificate of origin serves as its title. KCC probably has your tractor's cert. with their lien recorded on it. The cleanest way to sell the tractor is to pay off KCC first, so they send you the certificate with cancelled lien. Then it's yours to sell.

The 2 check method is a litle murky - for a few days the ownership of the tractor isn't clean. KCC is paid off but the buyer has to trust the seller to complete the deal.

 

[TomSeller]

Is the loan at Kubota transferrable? A downside to the two check system is you are limiting yourself to those with enough cash or complicating it if they were to take out another loan. Some buyers may have the cash but that 0% loan may be something they are interested in if they don't want to tie up all their cash.

 

[JMER817]

I would try to pay it off first to make things easier all the way around. Can you take a short term home equity loan, borrow from your 401k, take out a personal loan, use your credit card if you have a high enough limit?

 

[JMER817]

Thinking of selling my current L3200 and moving up to a larger cabbed tractor and I have a question regarding selling a tractor that I still owe money on to Kubota Credit. I have had the L3200 a little over two years. I financed for 5 years @ 0% and put 35% down, plus I have always added extra to my payments, so I have equity in the tractor. I want to sell in private sale because I will do better than trading in to dealer. My L3200 has 100 hours and is pretty minty (stored under cover) with all maintenance records , etc. Depending on how much I can get for it, I should walk away with a nice chunk of change to put towards new tractor. I called Kubota credit and didn't really feel like I got a complete answer. They did say to contact them when I sell and the payoff amount would be good for 15 days. Obviously, I would inform the buyer that I don't own the tractor free and clear. I am sure that others have done this before. What is the best way to handle this with the buyer to protect both of us and to ensure that the buyer is not nervous about this type of arrangement. The last tractor I sold was a B7610 that I owned outright, so I did not have to worry about this, thanks.

just a little advice, you have 0% financing which is costing you nothing. No need to put a large down payment or make extra payments. Keep your cash in the bank or pay off other debt. Use their money it's free. (To a point) consider this with the next tractor purchase.

 

[TomSeller]

, borrow from your 401k,

I would not do this. Ever.

 

[JMER817]

I would not do this. Ever.

nothing wrong with borrowing from your 401k. You pay yourself back with interest. Also, this would be only a short term loan that you pay off once you sell the tractor.

 

[Fallon]

nothing wrong with borrowing from your 401k. You pay yourself back with interest. Also, this would be only a short term loan that you pay off once you sell the tractor.

Agreed. Borrowing from your 401k is generally not a great idea. But in this type of situation you are making sure you can repay it very quickly.

 

[Will_C]

I have borrowed from my 403b once for exactly the same reason-bridging a cash flow situation. I would never borrow from mine to make a purchase.

Will