Tractors in the 40 HP Range

[Brokermike]

I did tons of research between the 1540 and mt DK40se before buying. The Kioti outperformed with the loader function, it was heavier and felt more stable, and it already had a rear remote which was extra $ from the Massey Dealer. Your prices seem cheap, have fun choosing



Regarding the comment about 0% financing, I think you're crazy, tractors are big ticket items, and a rarely affordable to someone if they have to write a check. Nevertheless for someone that can simply write a check, even after you factor in the extra $1,000 nut you pay to finance, you're still way ahead with the 0%. You can by a 6yr decent corporate bond paying 6%, on a $25,000 that's $1500 per year in interest, over 6 years that's $9,000. Even after paying the extra $1,000 to finance you're $8,000 ahead of the game, or over $100 per month in "free" money. I fail to see how a simple arbitrage situation should be illegal, it's what banks do every day (including the community banks that are thriving), they borrow money at low rates (deposits) and lend it out at high rates (loans), allowing a person to do the same thing should be encouraged

 

[studor]

Yes Brokermike I'm crazy -- but I don't believe in free lunches, the tooth fairy or Santa Claus either (or for that matter borrowing money to make money "investing"). Last I looked every 0% financing deal has to be paid for somehow -- you either pay for it in the price of the product or in other "add ons" you must take to qualify -- oh yeah -- there is one other way -- your taxpayer dollars can go to subsidize deals that manufacturers offered in good times and now don't have enough cash to keep operating -- that is a good zero percent deal -- every body pays for their stupidity and the buyers gullability.
Think about it -- somewhere, somebody pays for that zero percent and since the buyers are at the wrong end of the food chain, it's definately going to be them.

 

[greggh]

I went to several JD dealers and asked the price of a 5203 with a 522 FEL. I received quotes from 3. Two were in the 26K + range the other was in the 23 K + range. They all talked about the 0% financing that was available at the time. When I talked to the low price he said that the 0% was not free to him and that he had to pay 2% to JD. He said that for the deal I would have to pay that 2% I told him OK. That 2% worked out to be around $340 or something in that neighborhood. I still think I got a great deal.

 

[boatyard]

6 % in this economy? Lucky you! Hardly crazy if you are telling the truth.
Money out of the stock market and into cast iron [a tractor ] bordered on a brilliant move for us last summer. Our stock lost somewhere around 50%.

 

[Harold_J]

Yes Brokermike I'm crazy -- but I don't believe in free lunches, the tooth fairy or Santa Claus either (or for that matter borrowing money to make money "investing"). Last I looked every 0% financing deal has to be paid for somehow -- you either pay for it in the price of the product or in other "add ons" you must take to qualify -- oh yeah -- there is one other way -- your taxpayer dollars can go to subsidize deals that manufacturers offered in good times and now don't have enough cash to keep operating -- that is a good zero percent deal -- every body pays for their stupidity and the buyers gullability.
Think about it -- somewhere, somebody pays for that zero percent and since the buyers are at the wrong end of the food chain, it's definately going to be them.

Of course someone pays, but I look at it as a form of advertising. It's to get people in the door and in the seat of a tractor or automobile or whatever. Sometimes it's the 0% buyer who pays a little more, sometimes we all pay a little more with increased list prices, sometimes the stockholders have a smaller dividend or in the worst case the govt (us) pays for a bailout. You can't function in some markets without advertising.

That's why I think it's crazy when people complain about Citigroup paying for naming rights on the new stadium or companies advertising on the Super Bowl and paying top execs big dollars. What would we have them do, stop advertisng, lay of top management and then shrivel up and go out of business? I can understand the feeling, but if you're gonna do that you may as well forget about the bailout in the first place.

 

[farmermama]

We have a 1540 with a Bush Hog loader. It's a great tractor and does lots of FEL work for us very effectively. We've been very happy with its power and flexibility.

 

[Brokermike]

You really can't compare 0% financing to the tooth fairy or anything else in that realm. I never contended that 0% financing was a free lunch, I made a compelling case that in some cases it is the economically more intelligent route to take, especially if you have the cash. The reality is that the manufacturer "buys down" the rate in order to offer a 0% rate. Sometimes they share that buydown with the dealer, like in the 2% JD example above. The manufacturer rarely holds their own paper and must securitize it on the street (wall street) in this environment it's probably costing them 10% to do that, maybe more. However the manufacturuer is able to do all of this financing at a truly MASSIVE scale, and those economies of scale often make it easier to offer cheap financing than to offer a cheap price to dealers, which would allow dealers to offer a super cheap cash and carry price. Most dealers also floorplan their inventory and the % juice they pay is directly proportional to the deals they make, and how fast they turn their inventory. The other point which you fail to even mention is the effect of inflation on your payments. With our government pumping trillions into the economy, many argue that large scale double digit inflation might present itself in short order, making a pyment plan even MORE attractive because you're paying a fixed dollar amount back in inflated dollars.

I also think that your contention that financing is the devil couldn't be further from reality. Responsible financing, securitizing, and consumption has helped create the largest global expansion of wealth in history, even if you factor in the last 2 years. As global wealth grows more people move up out of poverty, and live longer better lives. It wasn't that long ago that Polio, or even the flu wiped out massive populations and infant mortality was double digits globally. I'm thankful that, although imperfect, we have the system we have.

Oh and if you can't find investment grade paper paying 6% you simply aren't looking

 

[boatyard]

I would still recommend reading the fine print, using care, asking questions, assuming that if it is too good to be true it probably is, and be careful trusting the manufacturer, or the salesman to tell the truth about value, return, safety, quality or efficiency, i.e. This product that I make/sell is the very best.
Brokermike why not mention the huge losses that real people have suffered under the collapsing house of cards that I assume that you as a, "broker", helped to build. You have noticed that the stock market, housing, bonds and so many other investments are down a good bit in value?

 

[studor]

Responsible financing, securitizing, and consumption has helped create the largest global expansion of wealth in history, even if you factor in the last 2 years

Agree Mike but the key words are responsible financing and SECURITIZING-- and we have certainly seen irresponsible behaviour in the last year wipe out a significant amount of that gain. A significant amount of that problem lies in the attitude of "making the payments" rather than affordablility of the total.
And by the way -- greed and lack of controls almost stopped the polio vaccine before it got off the ground.
regards

 

[Brokermike]

I can safely say that I didn't help to build or propagate any of the unregulated BS that was part of the current economic crisis. Unregulated markets are a recipe for disaster, as is the lack of personal responsibility and feeling of entitlement that graces this great nation.

But back to tractors! Financing is a legitimate way to buy any big ticket, slowly depreciating item, but it is certainly BUYER BEWARE. A good rule of thumb is that if you don't fully understand the risk verus the reward you shouldn't enter into the contract, but I think that applies to just about every big ticket item including housing, stocks, bonds, etc.