Buying Advice Kubota or Kioti or Mahindra or LS or McCormick????

[TomSeller]

Houses don't travel very far either (unless you buy one on wheels), and every mortgage lender requires insurance to cover casualties.

And if someone doesn't want to buy insurance, they don't have to finance their tractor through Kubota. You CAN buy a Kubota and finance it elsewhere. It's great to have choices.

Very good points.

 

[GManBart]

Houses don't travel very far either (unless you buy one on wheels), and every mortgage lender requires insurance to cover casualties.

We aren't talking about cars, but we are talking about a lender who wants to make sure their loan gets paid off if their collateral (whether a tractor, car or whatever) disappears or is destroyed. I still don't see what's unreasonable about that.

And if someone doesn't want to buy insurance, they don't have to finance their tractor through Kubota. You CAN buy a Kubota and finance it elsewhere. It's great to have choices.

Houses also aren't the same as tractors, so it's another apples to oranges comparison. The number of realistic, potential threats to a house, the far greater term of the typical loan, and the disparate loan amount compared to a tractor put home mortgages into an entirely different risk category for a lender. There are also additional factors, such as owner/renter rights that frequently prohibit a lender from evicting a defaulting owner in a timely fashion...the list could go on and on.

You're missing the forest for the trees. You've come up with the two common things people take loans on that require insurance, but missing the reality that the overwhelming majority of loans are unsecured. How about a credit card with a $25K limit, no collateral, and no insurance? How about a consumer credit account that will let you buy a $30K diamond ring for your fiancé...no insurance required there either.

Again, if a successful business model required insurance on tractors, all of the manufacturers and/or lenders would require it, but they don't. I guess one alternative explanation is that Kubota attracts more deadbeat buyers than the other brands (yes, I'm saying that in jest)….

 

[Gittyup]

Insurance against loan default is understandable. But, Kubota shouldn't be allowed to sell their own insurance to prevent them from profiting from it. I see this as a conflict of interest. Insurance should come from a third party that sets rates purely based on assessed risk. The risk is more about loan default than it is about damage/loss. And the rates should be graduated based on annual loan balance. Something like $400, $300, $200, $100 per year. Deadbeats usually show up early in the loan term.

 

[Poopdeck Pappy]

. . . You're missing the forest for the trees. You've come up with the two common things people take loans on that require insurance, but missing the reality that the overwhelming majority of loans are unsecured. How about a credit card with a $25K limit, no collateral, and no insurance? How about a consumer credit account that will let you buy a $30K diamond ring for your fiancé...no insurance required there either. . . .

Well, there ya' go. You just proved my point. I suspect if you want to pay Kubota 28% or 30% interest on the loan like you do on a credit card, they'd be happy to make you a loan with no insurance. Talk about missing the forest for the trees!

I'm not going to continue to argue with you on this point. Kubota has elected to offer a zero percent interest loan, but they require insurance on the collateral. There are other places to finance a tractor that don't require insurance but don't offer 0%. Pick your poison.

 

[Poopdeck Pappy]

Insurance against loan default is understandable. But, Kubota shouldn't be allowed to sell their own insurance to prevent them from profiting from it. I see this as a conflict of interest. Insurance should come from a third party that sets rates purely based on assessed risk. The risk is more about loan default than it is about damage/loss. And the rates should be graduated based on annual loan balance. Something like $400, $300, $200, $100 per year. Deadbeats usually show up early in the loan term.

I believe in capitalism and competition. I don't want any more government intrusion on our way of life than we already have. The LAST thing we need is ObamaCare for Tractors.

Seriously, as Bart has pointed out, there are finance companies that don't require insurance on a tractor loan. So what's the beef? I think the beef is that people want the Kubota 0% interest, but not the insurance. Well, that ain't the way it works. That's like GM offering 0% and no rebate on a Silverado, and Toyota offering 3.9% and a $4,000 rebate on a Tundra, and being mad at GM for not offering 0% AND a $4,000 rebate.

P.S.: An insurance policy covering loan defaults would be more expensive than an insurance policy just covering the collateral from theft, flood, fire or other damage.

 

[murphy1244]

I believe in capitalism and competition. I don't want any more government intrusion on our way of life than we already have. The LAST thing we need is ObamaCare for Tractors.

Seriously, as Bart has pointed out, there are finance companies that don't require insurance on a tractor loan. So what's the beef? I think the beef is that people want the Kubota 0% interest, but not the insurance. Well, that ain't the way it works. That's like GM offering 0% and no rebate on a Silverado and Toyota offering 3.9% and a $4,000 rebate on a Tundra, and being mad at GM for not offering 0% AND a $4,000 rebate.

Doesn't the insurance cover the cost of repairs too?

 

[Poopdeck Pappy]

Doesn't the insurance cover the cost of repairs too?

It's not an extended warranty, so not in that sense. But it would cover repairs in the event of one of the covered perils. For example, if your tractor caught on fire rolled over and was damaged.

Here are the lists of items covered and excluded from KTAC's website:

Covered:
Theft
Fire
Glass Breakage
Falling Objects
Collision
Hail
Tornado
Hurricane
Flood
Vandalism
Roll-Over (upset)
Earthquake
Water Damage
+More!

Exclusions:
Loss or Damage by Fraudulent Activities
Government Action or Seizure by government authority
Mechanical Breakdown
Wear and Tear
Nuclear Accidents
War
Terrorism

 

[TSO]

How crazy is it that "Nuclear Accidents" are listed !?

I should point out that both my credit union (first tractor loan) and AgriCredit (my LS) require insurance. But they don't specify which type of policy or coverages are required. Both are covered under my standard homeowners policy thru StateFarm and therefore I'm not paying any extra for it.

However, I'm not covered to the extent that the Kubota insurance does.

 

[TomSeller]

How crazy is it that "Nuclear Accidents" are listed !?
.

They had one in Japan just a few years back, maybe that was added to the exclusions at that time.

 

[murphy1244]

They had one in Japan just a few years back, maybe that was added to the exclusions at that time.

They had a Earthquake that caused a Meltdown.