The financing game - what's the real deal?

[DavesTractor]

Looks like you are doing your homework, good for you.

I agree that the downside of 0% is that you can never recoup the extra you paid. It is paid up front - if you then pay it off early (like many folks do) you aren't helping yourself. If you go zero, put little or nothing down and don't pay it off early.

 

[ameador1]

Looks like you are doing your homework, good for you.

I agree that the downside of 0% is that you can never recoup the extra you paid. It is paid up front - if you then pay it off early (like many folks do) you aren't helping yourself. If you go zero, put little or nothing down and don't pay it off early.

Trying to!

It makes me feel a little bad though - I like to research and have a pretty good idea of what I want before I show up at a dealer and with this pricing/financing scheme and have to keep adjusting the range of tractors I can consider as the different options are coming to light. I was thinking Max28XL, then 3016, then 3616, and now maybe even a little larger. But every time the bar moves, I have to call these guys back and say "price me up this model too!". Oh well, I guess it's the nature of the game - just gotta work my way through it.

 

[wedge40]

Trying to!

It makes me feel a little bad though - I like to research and have a pretty good idea of what I want before I show up at a dealer and with this pricing/financing scheme and have to keep adjusting the range of tractors I can consider as the different options are coming to light. I was thinking Max28XL, then 3016, then 3616, and now maybe even a little larger. But every time the bar moves, I have to call these guys back and say "price me up this model too!". Oh well, I guess it's the nature of the game - just gotta work my way through it.

I'm guessing they are smiling everytime you go back and ask to get a quote for a more expensive tractor.
I've gotten a basic price for the tractor I want, but not much more. I do plan on putting about 50% down and paying off early, so from reading I'll want a loan WITH interest.


Wedge

 

[DavesTractor]

I'm guessing they are smiling everytime you go back and ask to get a quote for a more expensive tractor.

Wedge

Actually, most of us wish there was just one price...simple. Here is the price, please write a check or finance at the real rate that does not cost me anything in the background that I have to somehow pass on to you, the customer. But alas, customers want and deserve options....so we have a ton of options.

Options are good as they can help you get the plan that works best for you. Like some people have a bunch down, but can only make small payments. Some people have no cash down, but can make huge payments. Some folks are coming into a bunch of cash in a few months due to a windfall of some sort. And for that reason, options are good. For the dealers sake, we'd prefer simple. "Here is the best price, please hand me a stack of $100's". That is the true price!

 

[lantxinNETX]

I'll have to ask about the 5 year option - if it drops the price and the interest isn't too bad, maybe near same payment with 2 less years loan time. Works for me.

The backhoe is probably what I'm after the most right now. Our soil is fairly hard packed (loam, clay, shale, limestone rocks, etc...) and full of fist size (and some bigger) rocks - and occasional - big rocks (dynamite? ). I don't think the FEL will get into it good enough by itself - even with a somewhat bigger unit. I had rented an excavator last year and the blade on the front had a hard time breaking the surface - but the hoe did pretty well. The most pressing issue is the footers for one of the buildings (which is my house). I need to go under the house and dig out new foots and re-build the foundation. Hard to explain, but I don't really have much option other than a smaller (sub-compact or compact) size machine than can dig the footers and then be able to scoop out and move the loosened dirt a distance away. I have another building (to be) that I need to dig footers for. I need to setup a water spring which is going to require digging out the area and building it up and then trenching water and power lines to it - probably 500' or so through the woods. I have to dig and burry water storage tanks (2 or 3, 500 to 1000 gal tanks). I also have a bunch of tree stumps to remove and I'm sure I can come up with more. BUT, I am still new to the world of tractors and digging machines - does this extra info make the backhoe more relevant or is a FEL alone still a possibility? I've never used one before - only the excavator so far - good at getting the dirt loose, but not so good at putting it somewhere else. Larger capacity/power would be nice - I'm sure I could use it in either case - but budget is the limiting factor. I think I would probably cap out with something like the 4035 with just a FEL - and granted that is more than the 3016 - but enough to give up the backhoe?

I'll check further with WV State Tax Dept on the Sales Tax Issue. I think they are behind on Income Tax returns. I did try calling them today and only got "We're REALLY busy!" messages with long hold times and never ended up getting anyone. Will try more tomorrow.

Thanks!

In my part of SE Oklahoma, we have red clay - with plenty of rocks. The FEL on my 4035 could dig into it, but I did buy a bolt-on tooth bar.

Compact tractor bucket bolt on tooth bar for compact tractor buckets up to 75 inches wide. Free Shipping!!

Helped with the digging. But this spring I decided to add the BH as I have a large number of stumps to try to dig out (great for that) as well as about 1000' of water and electric that I need to trench for. (Yes, could have rented a trencher, but given that I am about 90 minutes from the nearest rental yard it wouldn't have worked out too good.)

I understand your immediate need for the BH. Yes, you named off a bunch of good BH tasks. But if "budget is the limiting factor" and you really need the BH right now, then the 3016 is probably a good choice. But I would just say again that the bigger, more powerful tractor is going to take less time (and effort) to handle all of your tasks. Compare the specs on the FELs and the BHs for the 3016 and 4035. What you might be able to do in say five 'cycles' with a 4035 might take you 7 or 8 with the 3016.

As for the physical size - my 4035 is the same basic length as the 3016. It is about 10 inches wider, but that is not necessarily a bad thing. More stability.

I don't know what the price differences are, but when I was looking I would have taken the 4010 or the 4035. Ended up with the 4035 because a dealer had one left over from the year before at a good price. So I bought that one. This was not the most convenient dealer to me and I have not gone back to him for anything else - I bought my BH from a closer Mahindra dealer. So maybe you can look around a little and possibly find someone who has a 4010.

 

[architect]

As a client said to me today, why would you use cash when it earned him 25 percent in the market last year and the bank would lend him $3 million at 2.75 percent. Use their money, save yours for emergency's.

 

[jwcinpk]

Two things to keep in mind are 1-there are other lenders that will lend at very close to the 2.9% offers and you can only finance the cash price. I use Farm Credit Services for everything. 2-it's not set in stone, or at least it didn't used to be, that the 0% price was the only price you can get 0% at. When I bought my 3316 I got 0% for 60 months and they weren't even offering the promotion at the time. They wanted to sell tractors. I wanted to buy. I had bought 2 and will buy more. They weren't willing to see me even sample the competition. It never hurts to ask!

 

[Gravet]

I ran into this shopping for a SCUT, except when I went to JD. They are currently offering 0 for 60. The promotional price was $13,500 with FEL and MMM. Just like the other three companies I looked at, I figured that price would jump 10-15% once I told them I'd like to take advantage of the 0% financing. To my surprise, that JD is $13,500 with or without the financing.

 

[DavesTractor]

I ran into this shopping for a SCUT, except when I went to JD. They are currently offering 0 for 60. The promotional price was $13,500 with FEL and MMM. Just like the other three companies I looked at, I figured that price would jump 10-15% once I told them I'd like to take advantage of the 0% financing. To my surprise, that JD is $13,500 with or without the financing.

Let me take a different angle, just for fun. If I were buying that tractor with cash, I'd be concerned not to get a discount. Why should the cash buyer subsidize the 0% buyer? Obviously the cost of 0% is packed into the price. I want a discount....

 

[KennyG]

Let me take a different angle, just for fun. If I were buying that tractor with cash, I'd be concerned not to get a discount. Why should the cash buyer subsidize the 0% buyer? Obviously the cost of 0% is packed into the price. I want a discount....

When it's a factory offer it's not so clear what subsidizes the financing. Keeping the factory at capacity, controlling inventory, etc may play into it.

 

[Gravet]

Let me take a different angle, just for fun. If I were buying that tractor with cash, I'd be concerned not to get a discount. Why should the cash buyer subsidize the 0% buyer? Obviously the cost of 0% is packed into the price. I want a discount....

Totally agree. Which is why I wasn't surprised at the other dealers when they upped the price after hearing I wanted the 0%.

When it's a factory offer it's not so clear what subsidizes the financing. Keeping the factory at capacity, controlling inventory, etc may play into it.

Interesting.

 

[DavesTractor]

It works better from a sales angle to offer discounts if folks do not take 0%. If you start from the cash price and then charge more for 0% it is distasteful to folks. Same thing, feels way different.

Saying a unit is $17,500 at 0% or there is a $1500 discount for cash seems OK. Saying it is $16,000 or we have to add $1500 for 0% seems unfair....

 

[Gravet]

It works better from a sales angle to offer discounts if folks do not take 0%. If you start from the cash price and then charge more for 0% it is distasteful to folks. Same thing, feels way different.

Saying a unit is $17,500 at 0% or there is a $1500 discount for cash seems OK. Saying it is $16,000 or we have to add $1500 for 0% seems unfair....

Absolutely and that's what Mahindra, Kioti and Massey Ferguson did.

 

[DavesTractor]

Absolutely and that's what Mahindra, Kioti and Massey Ferguson did.

Actually, they tell the dealer what it costs them in the background and the dealer can package the financing options and discounts in whatever manner they wish. Some do this better than others.

That is why when you email a Mahindra dealer and ask for a price on a tractor it is really helpful to tell them your ideal purchase method, cash, low rate, big down, little down, monthly constraints, etc. They can then give you a couple of options that best fit your financial goals.

 

[jimpen]

I bought a Max25 last year with FEL, MMM & BH. All my neighbors have a minimum of five acres. They also have FEL and MMM (or rear mount finish mowers) tractors. I'm the envy of my neighbors because I have the BH. It has allowed me to pull railroad tie fence posts, dig nice deep holes and do some other stuff.

The reason I mention this is that you should get it right away, and not buy it later. Would you be able to finance it? Other 3PT implements like a bush hog, disk, seeder, etc. can be borrowed, rented, or bought used or new for less then $1K later on. The BH will generally be $2K+ later. So adding it to the original loan is probably easier.

Just my :2cents:

 

[ameador1]

Thanks everyone for your information and input. Interesting perspectives - I think the one that hit me the most on this was the one where the financed prices are the 'real' price and the lower prices are with a cash discount. I still feel like it is somewhat misleading as this effectively gets people in the door with a price that is unrealistic for (I'm assuming here) the majority of people who probably end up needing to finance. Then there are some models with more of a 'financing fee' connected to them. Like the 16 series that had a couple thousand more added to their cash price, but much less of a difference on the 3535 - but with a larger percent financing (3.99/84 vs 2.99/84 - or 0/84). Just confusing, inconsistent from model to model on prices difference, different percentages they offer for different terms - per model, etc...

I decided on the specs, and I think on the overall prices, that I picked the best model for my money - but without holding the dealer hostage for a week - I don't think I'll ever know what all I could have potentially gotten for the money I was willing to spend and finance.

I finally decided on, and got approved for, a 3535 with FEL and Backhoe. $34,000 + insurance + finance fee of some sort + sales tax (6%) - less $3000 down - $407 per month on the 0/84 plan! The dealer seemed honest and up front. He included delivery (2 hour drive by car - I'm sure longer by heavy loaded truck), filled tires, and a heater plug for cold weather for free. We split the cost of a thumb for the backhoe outside of the financing (thought about it after paperwork was done). Hopefully I will have it by this Saturday!

It seems like a good machine. I have posted a new thread about another issue related to the backhoe though - the model seems to be somewhat in question, but other than that, I can't wait!

 

[jrbarnard]

For me, it is all about the monthly payment, the lower the payment, the more tractor I can afford. 84 months is not a huge deal as 1 - it SHOULD last longer than that and 2 - It will get paid off by then, if not sooner. and lastly 3 - It will save me a heck of a lot more than I would have paid if I did not own the tractor.

For instance, I have a lot of work that needs to be done. 2 jobs would require a week of renting 2 bobcats. That is money out the window as I do not own them.

The "luxury" of being able to keep my payments low is more than worth the extra cost of longer term financing and what I factor into the deal.

I have not bought mine yet, but I am looking around, learning from here and other sources, and I will end up renting a backhoe if I need one, but saving the 7k and adding it into a bigger tractor with a CAB

I have the same rock issues you do and we can use a backhoe.. but a bigger tractor is a better solution, imo.

Russ

 

[pacountryboy]

Good luck on the purchase my brother. I am going through a purchase now and it isn't as aggravating as your situation but there is a ton of waiting to hear back if the deal is done or not from John Deere financing.

 

[ameador1]

For me, it is all about the monthly payment, the lower the payment, the more tractor I can afford. 84 months is not a huge deal as 1 - it SHOULD last longer than that and 2 - It will get paid off by then, if not sooner. and lastly 3 - It will save me a heck of a lot more than I would have paid if I did not own the tractor.

For instance, I have a lot of work that needs to be done. 2 jobs would require a week of renting 2 bobcats. That is money out the window as I do not own them.

The "luxury" of being able to keep my payments low is more than worth the extra cost of longer term financing and what I factor into the deal.

I have not bought mine yet, but I am looking around, learning from here and other sources, and I will end up renting a backhoe if I need one, but saving the 7k and adding it into a bigger tractor with a CAB

I have the same rock issues you do and we can use a backhoe.. but a bigger tractor is a better solution, imo.

Russ

Well, to some extent, that is what I looked at - that's what drove my decision to buy in the first place. Over the long term I will spend and awful lot on rentals and delivery fees and additionally the convenience factor - I can work when I have that chance to vs scheduling a rental and delivery. The overall cost was a large factor, but monthly payments was the primary restriction. So in the process of finding out what I could get, I ran into pricing and financing options where the monthly payment was coming out almost exactly the same - expect that one option had a lower sales price with a small finance interest rate or higher sales price with a 0% interest rate. So, same product, same payment, but different interest rates. In this case, to me, it make more sense to choose the one with the lower price and a small interest rate (2.99% in my case) so that I have the option of paying a little extra when I can to lessen to overall expense over time. With these different financing options and correlating changes in sales price and interest rates - it makes for a confusing and complicated decision.

In the end - I opted for a little more of a monthly payment, than I was wanting to do, for the purpose of getting a fair bit more tractor. This also ended up having me choose the 0%/84 month finance option to get my payment closer to where I wanted it. In this case there was very little difference in the sales price between cash and financing - $500, and the interest rate was not 2.99, but 3.99, so the 0% option was noticeably cheaper per month. But, on the 3016/3616, the price difference was a couple to a few thousand difference in cash verses financing prices and the interest rate was 2.99% - if not doing the 0% option. With those, the payment for 0%/84 and 2.99%/84 worked out to be within a dollar or two difference - just with the 2.99% option, you COULD pay more per month or make and extra payment or two and save a lot down the road.

 

[DavesTractor]

Regardless of the finance rate chosen, the monthly payment is often really close to what it would cost to rent a tractor for one day. I often tell people that if they can use the tractor one full day a month it costs the same as renting and they get it for 30 days a month instead of 8 hours. And they own it when it is all said and done. It is a compelling argument if there is work to be done. And you get to use the same machine each time, you do not have the transporting issues, you can run it an hour in the evening for fun, etc.