Is there any incentive to pay off your tractor early?

[David97]

Besides the obvious reasons would it save you any money? I have 0% percent interest with kubota but it seems like paying off your loan early might save a little because of the kubota insurance you have to carry.

 

[BoylermanCT]

I want my equipment paid off when the warranty expires. Don't want a tractor payment and a repair bill at the same time.

 

[BigCountry1689]

A lot of people keep the insurance after they pay their tractors off. I have maintained mine for the simple fact that I don't want to have to pay out cash if I drop a tree on it, its stolen, etc..... $300 a year for that piece of mind is worth it for me. Obviously if the item has reached a market value that no longer made it viable to maintain insurance then I would not carry it but as your contemplating payoff at 0% you probably financed for 72 months and have not had a substantial drop in value. If you have that cash liquid IMHO it would make more sense to invest it given market gains lately as opposed to investing in property that is going to depreciate albeit slowly. :2cents:

 

[George2615]

I don't think you are going to save any money by paying off a 0% loan. If you can pay it off then do so. Then take the monthly payment you were paying and invest in something that pays you interest.

If you want to pay it off so you can cancel your insurance, I wouldn't do it. I don't know how much your tractor is worth but what happens if it gets stolen or damaged and you don't have insurance. You would have no tractor and no money to replace it.

I paid cash for my tractor and will keep insurance on it for many years. For a few hundred a year to insure my tractor and attachments worth about $30K its worth it to me.

 

[MossRoad]

Aren't your tractors covered under your home owners insurance? If so, aren't you paying double insurance?

 

[ovrszd]

I don't think you are going to save any money by paying off a 0% loan. If you can pay it off then do so. Then take the monthly payment you were paying and invest in something that pays you interest.

If you want to pay it off so you can cancel your insurance, I wouldn't do it. I don't know how much your tractor is worth but what happens if it gets stolen or damaged and you don't have insurance. You would have no tractor and no money to replace it.

I paid cash for my tractor and will keep insurance on it for many years. For a few hundred a year to insure my tractor and attachments worth about $30K its worth it to me.

When I was a young man I had an elderly insurance agent that I used for everything. His favorite saying was "if you can afford to replace it, don't insure it". I don't owe money on my tractors but they are insured.

 

[rdinatal]

Usually on a 0% loan the price is higher than if you were to pay cash. Paying it off won't save any $.

If you wanted to pay it off early you should have paid the cash price and taken out a simple interest loan.

-R

 

[ovrszd]

Aren't your tractors covered under your home owners insurance? If so, aren't you paying double insurance?

In my case, my homeowners policy covers my little JD. Not my other two tractors.

 

[DuckSlayer1017]

Keep your money in the bank earning you interest. The loan isn't costing you anything extra to take it to full term so no reason to pay it off early.

 

[BrokeFarmerJohn]

I don't have insurance on my tractor, I was told by Allstate that they will cover my 4320 if it gets damaged or stolen on my property, they didn't have a tractor policy and I wasn't required to carry insurance so I never shopped for a separate policy. So far so good knock on wood.

A loan of 0% wouldn't be a benefit to pay off other than to get the loan off the books.