Tractor sales suffering in this economy?

[greggh]

Intermittant 0% financing has been going on for past few years. Especially with off time of year, less desireable models, model changes etc. It is now becoming the norm to have 0% financing across the board on CUTs. They don't just hand out 0% financing because thier just being nice to buyers. Sales had been in the double digit increase for several years. Now no more increase but instead a decrease in growth. That is alarming to many companies. There is a flood of CUT manufacturers, Mahindra, JD, Kubota, Kioti, Bobcat, NH, Case-ih, Massey, Iseki, Branson and a host of lesser known companies. I see CUTs sitting on lots for months at a time.

They charge the dealers 2% for the 0% interest.

 

[MessickFarmEqu]

They charge the dealers 2% for the 0% interest.

Some companies do, not all. Kubota never does. New Holland has, but its uncommon for them. As a salesperson, its a real pain in the butt when they do this.

Its a fair question to ask a salesperson.

 

[Johnny_B]

We've had 0% financing for 6-7 years.

Things are shifting. I had recently heard that car sales are off 30%, but we're hearing CUT sales off in the single digits. Its not nearly as bad as you may expect.

I just purchased a Massey GC2410 last month, I couldn't pass up the zero down and 0% for 72 months deal.

 

[N80]

I also thought 0% was a way to combat the used market. Tractors last a long time and if you look, you can find good used tractors, but the prices are pretty high. When you can get 0% financing and only pay a little more for new....new looks real good.

In terms of used prices, well, they're all over the place, but all high in my opinion. For example, TractorHouse.com has 7 L4400DTs for sale. Of the ones with loaders, and 4wd like mine, the price range is $16,000 for one with 150 hrs on it to $19,900 for one with 29 hours on it. Right in the middle is a new one for $18,600 (loader is a Rhino). I paid $19,200 for mine in 2005, but that was with $600 of rear remotes, so really about $18,600 for comparison.

Looking at those options, to me, the new tractor looks like the best deal if you have to do any financing and would probably be cheaper than the used one for $16,000 if you had to finance to get the used one.

To me, that's the real hook of the 0% financing. That's what got me into a showroom 3 years ago.

Also, if I could get $16,000 for mine, that would be about a 24% depreciation after 3 years of use. So the used machines still seem to be holding their value, even in this economy.

 

[NewToy]

We've had 0% financing for 6-7 years.

Things are shifting. I had recently heard that car sales are off 30%, but we're hearing CUT sales off in the single digits. Its not nearly as bad as you may expect.

I was watching the news last night and they were talking about GM sales being off 45% from last year. OUCH!

John

 

[bdeboer]

Did anyone else notice the drop is 2 wheel drive tractors? I suspect the large tractors are up because of the grain prices from last year. In this area with low yields and lower prices I suspect the large tractor market will drop also. I also suspect the small 4x4 tractor market numbers are similar to the small 2 wheel drive tractors.

 

[TEAM_ORANGE]

I also thought 0% was a way to combat the used market. Tractors last a long time and if you look, you can find good used tractors, but the prices are pretty high. When you can get 0% financing and only pay a little more for new....new looks real good.

In terms of used prices, well, they're all over the place, but all high in my opinion. For example, TractorHouse.com has 7 L4400DTs for sale. Of the ones with loaders, and 4wd like mine, the price range is $16,000 for one with 150 hrs on it to $19,900 for one with 29 hours on it. Right in the middle is a new one for $18,600 (loader is a Rhino). I paid $19,200 for mine in 2005, but that was with $600 of rear remotes, so really about $18,600 for comparison.

Looking at those options, to me, the new tractor looks like the best deal if you have to do any financing and would probably be cheaper than the used one for $16,000 if you had to finance to get the used one.

To me, that's the real hook of the 0% financing. That's what got me into a showroom 3 years ago.

Also, if I could get $16,000 for mine, that would be about a 24% depreciation after 3 years of use. So the used machines still seem to be holding their value, even in this economy.

I agree, it was a much smarter deal for me to purchase a new M8540HDC cab tractor w/ the LA1353 FEL for 36K and 0% for 60 mo. that it would have been to purchase a used tractor.