Tractor Financing for bad credit?????

   / Tractor Financing for bad credit????? #41  
Well, I am only 70 but I have been retired from working for someone else for 8 years.

While I was working for a company I build up a rental real estate business. I used credit (mortgages) for this and would not have the business if I hadn't used credit. To me, the key was to use credit in moderation. Every house DW and I bought, we analyzed what would happen if the bottom dropped out of the market and we couldn't rent it, and we never bought anything we could not afford if one, or even two bad things happened. Loss of a job, serious injury, etc.

In general, especially while starting out, which is where the OP is, do not use credit to buy an asset which will depreciate over time. Cars, tractors, whatever. Especially a non-essential asset like a tractor which is not part of a business. We knew that over long periods real estate would appreciate, even if there were short term losses, holding on for the long haul would bring rewards.

This may not be what the OP wants to hear, but he certainly needs to hear it.

At this point, we are in a position like PILOON. We have kept our cars almost until the wheels fell off, and endured many, many years of living below our means. But, the people who looked down their noses at our vehicles and houses are now pretty insecure, while we are not. We still have mortgages, both on our primary residence and rentals, but they are all fixed rate. Our assured income is more than sufficient to pay them.

Very well said Dave,,, I have always lived this way ...
I have to replace service trucks at times, but they are used.. There is a place that buys Trucks with all types of bed styles from utility companies that have been retired ,and sold.. I get really good deals fro the guy ,because I always buy from him when I need Truck..
When the economy was booming, I knew guys that bought all new trucks.. They were buying 1 for what I could buy 2 for.. They always ragged me for buying used.. They used that same song ,and dance about writing everything off..
That is, until the economy fell like a rock !
They lost those new trucks,and more, when they weren't pay those payments they thought they would always get to write off on their taxes
I see those ex business owners from time to time.. I never say a word about when they use to rag me about my used trucks ,etc.. All they ask me now is When you gonna give it up ? I just smile :),and say any day now..

The only way to maintain a high FICO score is to stay in debt..
 
   / Tractor Financing for bad credit????? #42  
Using other people's money is the method that most of the successful business people that I know use.

Example: Two men (equal in every way for the purposes of this discussion) work at a job and make $25,000 per year. They can each save $8,000 per year if they try. But, they want to start a... oh let's call it a "moving truck" business. The moving truck they want to buy costs $40,000.

Guy 1 wanted to start making money now, so he finances the truck at 5% for 5 years, and will pay $755/mo with a total finance charge will be $5300. Broken down each year, let's say he spends $9000/year to own that vehicle. Expected Revenues will be $5,000/mo. So for the year, he'll make $60,000. Let's pretend that there are no other expenses of any kind, so his profit is $60,000. Let's say he pays 25% of that in income tax, so he pays back $15,000 to the Govt. However, he gets to write off the full purchase of the truck, so his income instead is actually $51,000, so he actually pays back $12,750 in taxes. In this pretend scenario, his actual yearly income after taxes is $38,250. Let's pretend that this scenario remains the same for these 5 years... over this 5 year period, he'll profit $191,250. He'll also own a truck that is worth say $15,000. So he's profited $191,250, and gained an asset worth $15,000.

Guy 2 decides he'll wait until he can save up enough money to buy that truck. If he can save $8,000/year, it will take him 5 years to save up. So, he's already 5 years behind Guy 1. Guy 2 starts working, making $60k per year. Let's say he depreciates the truck over five years also, and the $40k cost which equals $8k per year. So his taxable income is $52000, and he pays $13,000 in taxes. He didn't spend $755/mo on the truck (although he still paid $40k for it up front) so his actual yearly profit is $47000. So, effectively, Guy 2 will "profit" about $9k more per year than Guy 1.

But at this point, year 10, Guy 1 is way waaaay ahead of Guy 2. He has made another $190k, and is over $180k ahead of Guy 2.

That's business.

It pays to build your wealth with other people's money.
Or Guy 2 got sick in year 4 and did not have enough assets to recover.

The tractor would be for personal use on my 30 acres....let me clear the air here, I didn't choose to get in a slump but life happens, divorce sucks and if you haven't been through it you wouldn't understand, I applaud you kenmac for making your wealth your way but for most people using the banks money is the only way to get expensive items, homes, vehicles tractors ect.
Divorce is just a lesson we have to learn to teach us how to marry a great spouse.

Deere Dude,

Unfortunately the L4200 had to be sold due to the divorce

So the REAL problem is YOU need a tractor for 30 acres for PERSONAL use. Which means no tax benefits, no line of profit.

How did you arrive at $15K? Is that a WAG or do you have a firm fixed price? Can you get by with your Dad's for a while?

Anyways - the issue of borrowing and paying cash is difficult.

I was a cash only guy, except for a mortgage, until about 30. Bought new car w/ cash on a Spec 4 salary. Finally when I was about 35 I figured it was better FOR ME to borrow and buy if I really needed something or it was a great bargain. And it was better to borrow on a house and pay low interest rate that's tax deductible.

I applaud those who struggle through without borrowing, but in this society my applause is the sound of 1 hand clapping.

But tell us what you need a tractor to do and maybe we can find a tractor for a less than $15K.

I just recently saw a 28HP? Kubota W/ loader, 4WD for $5,000 in Northern Virginia. NO bucket.
 
   / Tractor Financing for bad credit????? #43  
Kenmac said: "The only way to maintain a high FICO score is to stay in debt.."

WRONG! I owe no one anything. Have not borrowed money or purchased on credit other than using credit card for routine purchases, that being paid in full monthly, for the past 12 years. My FICO is very close to the max possible. If you pay cash on barrel head for everything, you will then have no credit record and your score will drop, I suppose.

About 30 years ago, I did borrow money to buy an office building for my business. I had been leasing office space before that. The payments for the loan were LESS than the lease payments and the lease was ready to renew and landlord proposed a substantial increase. So I saved money on lease payments, wrote off the cost of the building, collected and still collect rent on the portion of the building I do not need for my business and only have to worry about liability if there is a fire or such. My building insurance is higher, but also writes-off. So, borrowing worked out. IF it had bombed, the loan was secured by the property, so I would have to lease again. Win/ win. BUT, I have not, will not borrow for personal need. Do without before doing that.

The real estate credit boondoggle may eventually pale in comparison to collapse of the student loan "industry".

prs
 
   / Tractor Financing for bad credit????? #44  
Kenmac said: "The only way to maintain a high FICO score is to stay in debt.."

WRONG! I owe no one anything. Have not borrowed money or purchased on credit other than using credit card for routine purchases, that being paid in full monthly, for the past 12 years. My FICO is very close to the max possible. If you pay cash on barrel head for everything, you will then have no credit record and your score will drop, I suppose.

About 30 years ago, I did borrow money to buy an office building for my business. I had been leasing office space before that. The payments for the loan were LESS than the lease payments and the lease was ready to renew and landlord proposed a substantial increase. So I saved money on lease payments, wrote off the cost of the building, collected and still collect rent on the portion of the building I do not need for my business and only have to worry about liability if there is a fire or such. My building insurance is higher, but also writes-off. So, borrowing worked out. IF it had bombed, the loan was secured by the property, so I would have to lease again. Win/ win. BUT, I have not, will not borrow for personal need. Do without before doing that.

The real estate credit boondoggle may eventually pale in comparison to collapse of the student loan "industry".

prs

Here ya go big boy !https://www.daveramsey.com/blog/the-truth-about-your-credit-score/ Can you prove other wise ?
A FICO score is tied directly to your credit !! Your credit ,and how you use it.affects the FICO score !
 
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   / Tractor Financing for bad credit????? #45  
The only way to maintain a high FICO score is to stay in debt..

Not true. I'm close to max score and I don't owe a nickel to anyone. I do get nicked for not having enough credit cards (3) or loans. However, my card debt runs way below the max, and my bills are paid in full each month.
I do sympathize with the devastation that a divorce can bring. I came home one day and everything was gone, including the CEILING FAN! For awhile, my living room furniture consisted of a lawn chair and joint compound buckets. The financial and psychological recovery takes time.
 
   / Tractor Financing for bad credit????? #46  
I do sympathize with the devastation that a divorce can bring. I came home one day and everything was gone, including the CEILING FAN! For awhile, my living room furniture consisted of a lawn chair and joint compound buckets. The financial and psychological recovery takes time.

I haven't been in this position but I do have compassion for those who have experienced a nasty divorce, both make and female. The recovery can take time and hope the OP can get through this.

I would not try to buy/finance a tractor at this point, I would grit my teeth and get on a better financial footing first. Work on getting the credit reports in better shape first. Save up some cash over the next year or two to tide you over rough spots. Hope it works out for the OP and would say this has happened to many others. No need to chastise the OP.
 
   / Tractor Financing for bad credit????? #47  
In thinking about the last few posts, and the OP's situation. Maybe getting a higher than ideal interest rate on a nice tractor would help the guy get back to his happy place faster?

You guys are seeing this from a purely bottom line perspective. Money can't buy happiness, but it can buy a tractor and that's pretty close. ;)

Having that purchase on his credit history would also help repair the damage done with a bunch of on-time payments to report.

2-3 points for a year or 3 might be money well spent. Once he's back up into the 600's he can refinance and get a better rate.
 
   / Tractor Financing for bad credit????? #48  
So, we are part of TBN because we like having tractors, have fun with them even. I would think having one after a tough divorce would be therapeutic. Getting a bank to finance 100% of the cost might be tough, but they might do 70% or 80%. I would talk to a few banks or credit unions and see how much down they would need to give you a loan. Then ask them what the monthly payments would be.

Then start making the monthly payments to a separate savings account. Once you have saved enough for the down payment, find a tractor, get a loan, buy the tractor. If you can't make those monthly payments to your savings account, then you can't afford the tractor just yet.

In terms of things that matter to you, dare to dream!
 
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   / Tractor Financing for bad credit????? #49  
They won't normally loan 100% on used items. But getting one on a loan is exactly what you need to build your credit back IF you can afford it.

And yes, it would be therapeutic. I love being on my tractor.

Imagine running over some of her old stuff with a bush hog. Awesome!
 
   / Tractor Financing for bad credit????? #50  
Cant give advice here, just thinking about how my business started and ended. Paid cash for a piece of equipment. Business grew to where I couldnt keep up with the work. Paid cash for another bigger piece of equipment, paid for by the first equipment purchase. Business out grew me again. Hired employees, doing more work, business still growing, kept buying equipment but without financing. I was working 7 days a week, daylight to dark. Hired another crew, pocketing a quarter Mil a year. Then the economy started to slow, costumers stopped paying or slow pay, I could see the writing on the wall and sold the business before I lost my butt. Guy that bought my equipment borrowed the money to do so. Few months later I could have bought the equipment back for pennies on the dollar. Bank repo'ed everything he had. I bought with cash, but I did run credit lines at suppliers for materials. If I wasnt doing work, I didnt need supplies, so no real risk and no finance charges as long as paid in full each month. Fellow that bought me out did so on credit, no work, he still had payments to make. He was out of business in about 6 months.

Anyways, borrowing money has risk, but it also has rewards. An example would of been when folks where flipping houses every week. They financed a house say $200,000. sold the house in a couple of months for $250,000. You might say they made $50 grand on $200,000 and its a pretty good profit. Your Very wrong on that assessment. They Made 2 months payments of about $2000 each for a total of $4000 invested and a return of $46000. Thats how you use other peoples money to make money. I see nothing wrong with borrowinng money if that money will make you money, but buying equipment for personal use is a loss from the start. The piece of equipment will never be worth more than it is the day you buy it, and it will be worth even less when you go to sell it. A tractor for personal use isnt going to make you any money or save you any money. Sometimes its just best to either hire out the work to be done or just rent a piece of equipment for a few days until you can complete the work. That way, instead of the machine just sitting in a barn unused and depreciating by the minute and costing you money just to own, Somebody else owns the expensive equipment and the maintenance and payments that goes with it.
 
 
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