Lease VS Buy................

[LazyHRanch]

This post has been very informative.

I do have a question though. I thought that a persons payment history and signature debt percentage was used with a few other things to compare people to other people who had the same scenarios in the past and assigned a credit score based on how the other people had done paying their bills. Is there any truth to that? Just what I thought and yes that does sound like profiling people and the government would never let the banks profile people. I might have read into something else too much a while back.

 

[MinnesotaEric]

This post has been very informative.

I do have a question though. I thought that a persons payment history and signature debt percentage was used with a few other things to compare people to other people who had the same scenarios in the past and assigned a credit score based on how the other people had done paying their bills. Is there any truth to that? Just what I thought and yes that does sound like profiling people and the government would never let the banks profile people. I might have read into something else too much a while back.

In the past that may have been true, but I cannot speak to your conjecture. What is true is that people are compared to model and what I shared are inputs and trigger points of the model that matter to the best of my understanding.

 

[MHarryE]

At Caterpillar a lot of our customers rent new equipment for 3 years until it depreciates in value to the point where they can afford to buy. I'm not sure how that really works but I did take advantage of that practice to buy my mini-excavator. The contractor who had used it for 3 years went belly up in 2008 so it was available for me to buy in 2009 for an excellent price. How a person can win paying the high monthly rental cost vs. buying I cannot understand unless it is that their credit is not adequate to buy new but they generate income with the machine greatly exceeding the rental cost, then grab it when their credit allows. For the product line I supported for 6 years I under stand 90% of North American sales went into dealer rental fleets. Overseas an entirely different ball game. One customer in the Middle East I worked with purchased 43 of these machines for one construction project, then sold them 3 years later for a very low price when the project was complete.

Farming can be a wasteful business. An example is a planter. Buy a nice little 40 row planter got a significant sum, use it for say 3 weeks, then put it in the shed until next year. The large investment sits idle for 11 months each year. A planter is an example of something it would be nice to rent or have a very short term lease, but then what would the dealer do with it? Cut them up after each planting season and sell to hunters for their food plots?

 

[MinnesotaEric]

At Caterpillar a lot of our customers rent new equipment for 3 years until it depreciates in value to the point where they can afford to buy. I'm not sure how that really works but I did take advantage of that practice to buy my mini-excavator. The contractor who had used it for 3 years went belly up in 2008 so it was available for me to buy in 2009 for an excellent price. How a person can win paying the high monthly rental cost vs. buying I cannot understand unless it is that their credit is not adequate to buy new but they generate income with the machine greatly exceeding the rental cost, then grab it when their credit allows. For the product line I supported for 6 years I under stand 90% of North American sales went into dealer rental fleets. Overseas an entirely different ball game. One customer in the Middle East I worked with purchased 43 of these machines for one construction project, then sold them 3 years later for a very low price when the project was complete.

Farming can be a wasteful business. An example is a planter. Buy a nice little 40 row planter got a significant sum, use it for say 3 weeks, then put it in the shed until next year. The large investment sits idle for 11 months each year. A planter is an example of something it would be nice to rent or have a very short term lease, but then what would the dealer do with it? Cut them up after each planting season and sell to hunters for their food plots?

You with Ziegler? Ziegler is the only CAT dealer I know of up in northern MN.

 

[jbwbhs]

Just learned more about credit ratings than I've learned in 40 yrs of trying, and on the tractor forums!? Thanks Eric.

 

[MinnesotaEric]

Just learned more about credit ratings than I've learned in 40 yrs of trying, and on the tractor forums!? Thanks Eric.

My pleasure. Watch out for bigfoot.