Financing Kubota Financing

[mikedodd]

I bought a new Kubota this August and the price was the same for cash or the financing at 0%. There was a caveat though. It you use the 0% financing you must carry Kubota insurance.

Yes, that was the case when we bought our new BX-2360 in October.

I'm well aware that companies must make money, and nothing is "free." But, for us, the 0% financing meant we could buy the tractor without cashing-in retirement savings.

The insurance cost $565, as I recall. If we'd paid cash, we would have lost -- even at a paltry 2% -- $1,500 appreciation on on our reduced savings over the five years. In this case, the 0% 60-month financing sealed the deal.Not to mention that the tractor has been immensely useful helping us build a large deck for our new house. Update: Deck

 

[Andrewnewy]

I can tell you for a fact the 0% interest is just a marketing gimmick, most finance contracts on tractors are fixed, I.e regardless of whether you pay them out early or stay the full term it will still cost the same. However when you think you have 0% people tend to let them run it's course. They are then more likely to upgrade when the contract finishes. It's all marketing!

The way we get the 0% in the first place is either the importer or dealer buys the rate down from the lender. If the importer does it, there will be no difference between cash price and finance as they share the cost between all tractors sold. If the dealer does it then there will be a difference between cash or finance.

Dealers do this to get a sale, if you think your not paying any interest then your more Likely to sign up as you find the deposit, proof is in the shear number of people on this thread saying that's why they went ahead. 0% sells tractors!

At the end of the day, if your dealer knows how the system works then you will always get a better deal for cash, even if you then go a finance through your bank.

There is one thing you can always guarantee banks / financiers don't give money away for free, you will always pay for it, whether it be spread across multiple sales or in extra 'fees' they will always win. And realistically they have to, otherwise they wouldn't have money to lend to you in the first place!

A perfect example of this is with the finance we offer on Kioti, currently we have a base rate of 8% however the fees are only $250. To directly compare this to JD finance they have a 0% rate but there fees add $2400 to the term at the end of the day if the amount financed was the same then they will both come out about the same (in fact one I did today JD was actually more expensive over the term) but if you were given the option of 8% or 0% which one would you pick?
(the ones who picked the 8% just saved yourself some money!)
Now don't get this confused with loans in general, but this is defiantly how tractor financing works.

 

[JOHNTHOMAS]

I can tell you for a fact the 0% interest is just a marketing gimmick, most finance contracts on tractors are fixed, I.e regardless of whether you pay them out early or stay the full term it will still cost the same. However when you think you have 0% people tend to let them run it's course. They are then more likely to upgrade when the contract finishes. It's all marketing!

The way we get the 0% in the first place is either the importer or dealer buys the rate down from the lender. If the importer does it, there will be no difference between cash price and finance as they share the cost between all tractors sold. If the dealer does it then there will be a difference between cash or finance.

Dealers do this to get a sale, if you think your not paying any interest then your more Likely to sign up as you find the deposit, proof is in the shear number of people on this thread saying that's why they went ahead. 0% sells tractors!

At the end of the day, if your dealer knows how the system works then you will always get a better deal for cash, even if you then go a finance through your bank.

There is one thing you can always guarantee banks / financiers don't give money away for free, you will always pay for it, whether it be spread across multiple sales or in extra 'fees' they will always win. And realistically they have to, otherwise they wouldn't have money to lend to you in the first place!

A perfect example of this is with the finance we offer on Kioti, currently we have a base rate of 8% however the fees are only $250. To directly compare this to JD finance they have a 0% rate but there fees add $2400 to the term at the end of the day if the amount financed was the same then they will both come out about the same (in fact one I did today JD was actually more expensive over the term) but if you were given the option of 8% or 0% which one would you pick?
(the ones who picked the 8% just saved yourself some money!)
Now don't get this confused with loans in general, but this is defiantly how tractor financing works.

You've sort of shuffled a lot of peas and carrotts on a checker board. Your marketing aspect is true but it really has very little to do with whether it is a 0% loan or not when a customer is buying a tractor. I first have a degree in Accounting and also was even hired by the Gvmnt as an Auditor. I also taught Marketing at the College for years and I've bought 13 Kubotas, no Kiotes.
Fist I agree it is a Marketing strategy. No doubt, absolutely. Just like free oil for life if buying a Chrysler product at the Somerset, Ky car dealer. Even the free tires for life at another local car dealer. Even the give you $1000 for any vehicle you can drag into the lot marketing deal. Now lets move on past Marketing which almost all sellers of a product or service should do.
0% Financing at Kubota Dealers is the topic and I'm going to stay with that for a bit. As I've said I've bought 13 Kubotas in 9 years, well actually it was over an 8 year period of time. OK the Kubotas I bought were sitting on a Kubota dealers lot. The dealer did not own the Kubotas, they belonged to Kubota. When he made a sale he called and got a "spot" price. He had that figure in his mind and then added his "profit" to that figure and told me what it would take to buy the machine (Kubota, not Kioti). Over the years he said there was a discount if I paid cash but most of the time he said the price was the same for cash or finance and made no difference to him which I did. (Forget Marketing tool I said) he wasn't marketing, he was processing the deal. I could go to a bank for loan, have cash in my pocket or sign his printed out in less than 2 minutes papers and the bottom line was he still wanted $16000 cash or charge. No difference, still $16000.
He, the dealer, got the same commission/profit/payment no matter what I did, no more no less so he had no reason for me to do one over the other, money wise.
That's 0% interest if I signed his papers and paid him $16000 over 60 months ($266.66 per month).
This is where it gets interesting of the beliefs that the company is there to make money and adds the cost to the tractor. That will be true, whatever that cost is. Absolutely true. Some say Japanese Gvmnt gives free to almost free loan money to companies. Don't know if that's true or not and don't care because it doesn't matter to the issue of 0% being truly 0% to buyers of Kubotas that take the 0% when there are no discounts for cash offered by the Company. Those discounts are NOT dealer discounts, they are Kubota Company discounts so makes no difference to dealer.
OK who's paying for these 0% loans???????Everyone who buys a Kubota whether they take abvantage of the deal or not. Just like the free oil for life car deals and the free tires for life car deals. The car dealer is getting his overhead or closing, same for Kubota Company but Dealers are NOT Kubota Company. Tractors or Kubota Dealerships are not the same as Car dealerships where Dealers have to buy the products and maybe Kioti dealers are more like car dealers than Kubota Franchise Dealers. So, those of us buying and using the 0% are getting 0% because we are paying the same price as cash buyers but keeping our money for 48 to 60 months, sorry guys for you nonbelievers but that's 0% to the using Buyer no matter how you look at it. It only applies to users.

 

[s219]

The flaw in the argument is in cases where there is a cash discount. I got $1050 off for paying cash instead of financing (and that was an incentive straight from Kubota -- it was a choice between 0% financing or the $1050 rebate).

From there, people need to weigh present/future value of money over a loan period to decide what works best for them. Everyone will have a different perspective on it.

 

[beppington]

The flaw in the argument is in cases where there is a cash discount. I got $1050 off for paying cash instead of financing (and that was an incentive straight from Kubota -- it was a choice between 0% financing or the $1050 rebate).

From there, people need to weigh present/future value of money over a loan period to decide what works best for them. Everyone will have a different perspective on it.

I didn't have that choice: Dealer told me same price, cash or 0% financing.

 

[JOHNTHOMAS]

You've sort of shuffled a lot of peas and carrotts on a checker board. Your marketing aspect is true but it really has very little to do with whether it is a 0% loan or not when a customer is buying a tractor. I first have a degree in Accounting and also was even hired by the Gvmnt as an Auditor. I also taught Marketing at the College for years and I've bought 13 Kubotas, no Kiotes.
(Kubota, not Kioti). Over the years he said there was a discount if I paid cash but most of the time he said the price was the same for cash or finance and made no difference to him which I did.
I could go to a bank for loan, have cash in my pocket or sign his printed out in less than 2 minutes papers and the bottom line was he still wanted $16000 cash or charge. No difference, still $16000.
He, the dealer, got the same commission/profit/payment no matter what I did, no more no less so he had no reason for me to do one over the other, money wise.
That's 0% interest if I signed his papers and paid him $16000 over 60 months ($266.66 per month).
it doesn't matter to the issue of 0% being truly 0% to buyers of Kubotas that take the 0% when there are no discounts for cash offered by the Company. Those discounts are NOT dealer discounts, they are Kubota Company discounts so makes no difference to dealer.
OK who's paying for these 0% loans???????Everyone who buys a Kubota whether they take abvantage of the deal or not.
Dealers are NOT Kubota Company. Tractors or Kubota Dealerships are not the same as Car dealerships where Dealers have to buy the products and maybe Kioti dealers are more like car dealers than Kubota Franchise Dealers.
So, those of us buying and using the 0% are getting 0% because we are paying the same price as cash buyers but keeping our money for 48 to 60 months, sorry guys for you nonbelievers but that's 0% to the using Buyer no matter how you look at it. It only applies to users.[/quote]

I tried to make it cleat that the TRUE 0% applies when there are NO CASH DISCOUNTS which has happened several times over the years. Don't know about now and it's NEVER told on the Kubota.com website, only told at the dealers on the DAY you agree to the deal.
Simply, it's $16000 cash or charge for 48 to 60 months. Divide the sale price by the number of months and that's 0% interest for THAT BUYER.

 

[AHNC]

I have represented a couple Japanese companies in my business and right now, the greatest pressure for Japanese products is the exchange rate. The yen is at about 75-1$. That puts significant pricing pressure on Japanese manuf. Probably why there are no cash discounts

 

[s219]

The rebates are seasonal, so they are not always in effect. The last round of cash rebates ended on 12/31/11.

 

[MessickFarmEqu]

for what its worth, right now 0/48 has no dealer contribution, 0/60 does (except on M's).

 

[OrangeRidge]

Dealers are NOT Kubota Company. Tractors or Kubota Dealerships are not the same as Car dealerships where Dealers have to buy the products

Are you sure about that wrt Auto Dealers , John ?