Insurance KTAC Insurance: who's read the fine print?

[Fallon]

Why would you pay cash if you can finance at zero percent for the same price?

Granted, a monthly payment does not feel good. BUT years ago I financed my E350 van at zero percent. I could have paid cash. I hated the monthly payment but it made the most sense. Got a little interest on the money over that five years.

Finance it if the price is the same and do not look back. Get the insurance that way. Use their money rather than your own during the finance period.

Only works if you are disciplined I suppose, and do not use that cash for other things in the interim. I was...

There is usually a discount if you pay cash. The actual interest rate is bundled into the sales price & called 0%. Most 0% deals on tractors or anything else work that way. You may or may not be able to get the discount, but no matter what those finance charges are burried in there. There is no such thing as free money & manufacturers arent going to take a loss making or selling stuff.

 

[Henro]

There is usually a discount if you pay cash. The actual interest rate is bundled into the sales price & called 0%. Most 0% deals on tractors or anything else work that way. You may or may not be able to get the discount, but no matter what those finance charges are burried in there. There is no such thing as free money & manufacturers arent going to take a loss making or selling stuff.

Granted there is no free lunch...but if you are unable to get the price reduced for a cash purchase then the there is no free lunch point is moot.

In the example I gave the price was the best I could negotiate. Not sure about Kubota, as I negotiated the best price I could when I bought my B2910, and did not think to ask about zero percent financing, and I paid cash. Perhaps a mistake on my part. Also did not think about Kubota insurance. Fortunately never needed it.

Paying a higher price just to get zero percent financing would be silly, IF one has the cash in hand. But if the price is the same, financing at zero percent and letting your cash earn some interest somewhere can make sense.

Is it really true that there is usually a discount if you pay cash for a Kubota tractor? Does Kubota only finance tractors at zero percent if purchased at the list price? Will Kubota refuse financing if the dealer sells at a discount?

Do not know...but I do know if you can pay the same amount over time as you would pay in cash on day one, you will be ahead by paying over time, IF you let the cash balance work for you over the finance period.

 

[Fallon]

Granted there is no free lunch...but if you are unable to get the price reduced for a cash purchase then the there is no free lunch point is moot.

In the example I gave the price was the best I could negotiate. Not sure about Kubota, as I negotiated the best price I could when I bought my B2910, and did not think to ask about zero percent financing, and I paid cash. Perhaps a mistake on my part. Also did not think about Kubota insurance. Fortunately never needed it.

Paying a higher price just to get zero percent financing would be silly, IF one has the cash in hand. But if the price is the same, financing at zero percent and letting your cash earn some interest somewhere can make sense.

Is it really true that there is usually a discount if you pay cash for a Kubota tractor? Does Kubota only finance tractors at zero percent if purchased at the list price? Will Kubota refuse financing if the dealer sells at a discount?

Do not know...but I do know if you can pay the same amount over time as you would pay in cash on day one, you will be ahead by paying over time, IF you let the cash balance work for you over the finance period.

No doubt 0% is better than cash at the same price given the time value of money (interest and opportunity cost). Kubota isnt really any different than any car dealers that often do the same 0% deals. Kubota assumes the default is taking the "0%" loan & all negotiations generally assume that. It does give you easier math as you arent calculating any interest or varying interest rates.

When negotiating, ask if there are any cash discounts. There often, but not always are. Dealers (car dealers especially) love loans as it means they can play shell games shuffling numbers around between down payments & monthly payments to hide interest rates & actual prices. It's always a good idea to be aware of the 4 square negotiation method employed by most dealers. How Car Dealerships Rip You Off (The Truth) - YouTube much less relevant with 0% deals, but aspects can still be employed.

 

[MHarryE]

In one sense I could say I made money off Kubota’s zero%. Four purchases with no discount offered to pay cash, but being retired I would be hard pressed to pay the lump sum due to higher income tax on the large IRA withdrawal. By instead keeping my money invested, I gained 12% interest annually on my money averaged from beginning of 2009 through 2018. Investment income reduced the cost of each by roughly 25%. Of course if I didn’t but the tractors or RTV in the first place I would be better off financially but probably dead by now due to a boring retirement. My last purchase, a M7, did have a $3,000 reduction for 5 years instead of 7 but I ran the numbers and it paid to stretch out the purchase. It comes down to what would you do with your money.

 

[Henro]

One thing that I remember is one time I as buying something, either a piece of property or a vehicle.

Trying for the best price, and having the cash on hand, I asked how much they could knock off if I paid cash.

The answer was: Nothing. It makes no difference to me where the cash comes from...you or wherever you borrow it from.

I believe most Kubota dealers are affiliated with, but not owned by Kubota. Do they care where the money comes from?

 

[wingizzmo]

Well, Henro I guess its the payment lol for the first time in my adult life I have no payments everything is paid off last month I made my last mortgage payment both cars are paid and it feels like I'm free LOL if you kinda get it !

 

[wingizzmo]

One thing that I remember is one time I as buying something, either a piece of property or a vehicle.

Trying for the best price, and having the cash on hand, I asked how much they could knock off if I paid cash.

The answer was: Nothing. It makes no difference to me where the cash comes from...you or wherever you borrow it from.

I believe most Kubota dealers are affiliated with, but not owned by Kubota. Do they care where the money comes from?

I think they do I at one time in my life use to work for car dealers everyone has there hand in the pot if in fact you finance through kubota the dealer will get a kickback of some kind now in the case of 0% its about volume of sales the more units out the door in said time period the more holdback money IE bonus the stealership gets! Its all numbers

 

[KTAC]

Sorry for the late response... The replacement option policy (which is also the multi-year policy) can only be purchased as part of KCC financing. If you pay cash or already own your equipment, our annual policy (must renew each year) has all the same coverage (on and off property, transportation cost, etc) but does not come with the replacement option.

 

[wingizzmo]

Sorry for the late response... The replacement option policy (which is also the multi-year policy) can only be purchased as part of KCC financing. If you pay cash or already own your equipment, our annual policy (must renew each year) has all the same coverage (on and off property, transportation cost, etc) but does not come with the replacement option.

Thank you for your response Ok so if I were to only finance say 3000. on the 5 year, I get the 5-year replacement policy? Oh and is there an application fee to finance?

 

[KTAC]

The replacement option is good for the first 60 months of the contract so, yes, it would be covered. Yes - There is a documentation fee charged by the dealer for financing.