Purchase Dilemma

[AchingBack]

Around Father's Day of 2005, I bought a brand new Mahindra 2615 HST, financed through Agricredit Acceptance LLC. The purchase price was, $14,995. My down payment was $1,399.00. At 0% interest, my monthly payment was $390.90 for 36 months. In addition, there was an administration fee of $239.68, and $226.00 for physical damage insurance. I believe the administration fee is charged in case of default it gives them some money for recovery cost to pick up the unit, return to dealer, etc.. In addition, I paid a $10.00 filing fee. It took a couple of days to get the approval, and I was quite happy because my income at the time was barely $800.00 per month from social security. However, I had a good credit score, and evidently that was what mattered; thank God.

Had I not loaned several thousand dollars to my brother, I would have had
enough money to pay cash, and receive $400 off the price, in lieu of financing. Now, my brother has repaid the loan, and says he will be giving me some interest on the loan when he has it. If it happens, I think I will use it to buy some precious metal.


For now, my paid for precious metal is sitting proudly in the tractor shed, and I couldn't be happier.

 

[MasseyWV]

there was an administration fee of $239.68

I was not aware that there would have been an "administration fee" and believe that is their way of making money on a 0% interest loan. I knew there had to have been a catch somewhere.

Just another reason for me to pay cash when I decide to purchase.

 

[CurlyDave]

I bought my tractor with 0% financing, even though I had the cash available to buy it. The machine was ~$40k, and the payments were around $1600-$1700 per month.

Now I can tell you from experience that at the mid-point of this loan I had over $30 k in the bank, and payments of ~$1650/month. My credit score would have been higher if I had no payments and $10 k in the bank.

I have no idea why this is the case, but it is.

Fortunately, I had no need to borrow money until I paid off the tractor, but depending on your situation you may be better off paying cash and keeping your credit score higher. For instance, if you are looking at the possibility of a new mortgage.

 

[ChuckinNH]

Perhaps the credit rating is based on the ratio of "discretionary" debt in this case. I know banks didn't like to see that back when I was buying homes. The same thing can happen if you have too many credit cards...... even if you haven't used them.

 

[AchingBack]

I was not aware that there would have been an "administration fee" and believe that is their way of making money on a 0% interest loan. I knew there had to have been a catch somewhere.

Just another reason for me to pay cash when I decide to purchase.

Whether on not it is a catch depends on how you look at it. If you know up front, and sign on the dotted line, it is a good catch. Would a person rather finance at 0 % interest, or at , 5.9% which is a pretty common rate.

In your perfect world, you would go to the Mahindra website, buy the tractor for at least 20% under what a dealer would charge, expect free shipping, extended warranty, and a gift bag. After that, if you had a problem with the tractor, you would gripe because there was no dealer nearby to check your oil.

 

[MasseyWV]

Whether on not it is a catch depends on how you look at it. If you know up front, and sign on the dotted line, it is a good catch. Would a person rather finance at 0 % interest, or at , 5.9% which is a pretty common rate.

In your perfect world, you would go to the Mahindra website, buy the tractor for at least 20% under what a dealer would charge, expect free shipping, extended warranty, and a gift bag. After that, if you had a problem with the tractor, you would gripe because there was no dealer nearby to check your oil.

Being a catch means that they do not tell you about the extra fees until just before you sign on the dotted line. They are hoping that by that time, you have fell in love with a tractor after having gone through so much trouble to get to that point and are more likely to overlook it as being no big deal and complete the sale.

From some of the information (and actual quotes) I have gathered while doing my homework, I would suspect that "20% under what a dealer would charge" would be a very conservative estimate.

In my perfect world I would...

1. Buy direct from the manufacturer (at a reasonable cost).
2. Have several shipping options to choose from (at a reasonable cost).
3. Have a standard warranty.
4. Get a free hat.
5. Check my own oil.

If a warranty issue were to arise, I am more than capable of doing ANY repairs or maintenance that needed to be performed and would only request that any needed parts that were covered under warranty, be shipped to me by the manufacturer.

Back to reality...

I am well aware that unless I decide to buy a used tractor, that I am forced to negotiate with several dealers to get the best price possible then I will have to do business with one of those dealers to get my new tractor.

I am no stranger to business and have no problem with a dealership making a reasonable profit in exchange for the benefit of getting useful information, the ability to physically see and test-drive the tractor to be certain it is the one I want, warranty service, parts, etc... I mentioned parts but will add that the "dealership" is the last place I will look for parts because they are always much more expensive than the alternatives.

It is not the "dealer" that I have a problem with, it is the fact that it is so hard to get a consistent (or reasonable) price right off the bat and to make matters worse (in the case of Mahindra), the MSRP is apparantly a state secret.

I still think that "salesmen" are bottom-feeders but that is just my opinion.

 

[AchingBack]

Not everyone is a wrench turner, thus we have mechanics. Not everyone can transport their tractor for service, thus, someone must come and get it. These people come from dealerships. Dealers would not exist if not for customers, would they?

I think anyone who is in a frame of mind that salesmen are bottom feeders, probably cuts their own hair because barbers charge too much.

I've been in sales most of my life. It always amazes me when someone thinks we should put in 40 - 60 hours a week for nothing.

How about some cheese with your whine?

 

[MasseyWV]

Not everyone is a wrench turner, thus we have mechanics. Not everyone can transport their tractor for service, thus, someone must come and get it. These people come from dealerships. Dealers would not exist if not for customers, would they?

I think anyone who is in a frame of mind that salesmen are bottom feeders, probably cuts their own hair because barbers charge too much.

I've been in sales most of my life. It always amazes me when someone thinks we should put in 40 - 60 hours a week for nothing.

How about some cheese with your whine?

I am sure that there are exceptions to the rule but in my experience, conducting business with any sort of "dealership" or "salesman" has been an overwhelmingly bad experience.

I agree that "dealerships" exist for a reason and that "salesmen" serve a purpose but still think that buying direct should be an alternative option for those of us who just don't like to go through the hassle.

 

[AchingBack]

It will only happen in Utopia. If we had it your way, there might be a few "wrench turners" able to do whatever "wrench turners" do. But someday, one of those wrench turners gets in over their head, and the next thing you know, in order to save face, they are bad mouthing their crappy brand of tractor.

Tractor manufacturers know and understand this fact. It would be hard to imagine how they could exist without a dealer network to professionally service their equipment.

However, if I were the manufacturer, I would make an exception just for people who live in Utopia, but only if they had proof of residence. Period, end of report.

 

[MasseyWV]

It will only happen in Utopia. If we had it your way, there might be a few "wrench turners" able to do whatever "wrench turners" do. But someday, one of those wrench turners gets in over their head, and the next thing you know, in order to save face, they are bad mouthing their crappy brand of tractor.

Tractor manufacturers know and understand this fact. It would be hard to imagine how they could exist without a dealer network to professionally service their equipment.

However, if I were the manufacturer, I would make an exception just for people who live in Utopia, but only if they had proof of residence. Period, end of report.

I never said the world was a perfect place but with the advent of the internet and changes in the overall marketplace, a lot of things have changed that people said would never happen. Manufacturers know and understand this and change accordingly. Take this forum (and others) for example: I have little doubt that manufacturers routinely read posts to get an idea of user opinions, market trends, etc... I would if I were them.

I have yet to get in over my head but as to other "wrench turners", they can speak for themselves. As to the quality (or lack thereof) of a product, I only speak the truth in regard to actual experiences and let people judge for themselves. It is the consensus of opinions that determines an overall portrait of the quality of a product.

As to dealers "professionally servicing" equipment, it is sometimes a crap shoot at best which is precisely why I prefer to service my own equipment. Granted, some dealers may provide top-notch service, but I would rather do it myself to be certain it is done right.

If I were a manufacturer, I would be more concerned with proof of purchase as opposed to proof of residence.

Let's agree that we disagree and leave it at that.