Buying new with cash- how much bargaining wiggle room?

[dragoneggs]

I bought my brand new tractor for only about $2000 more than the best price I could find on a used one. I'll gladly pay 10 % more for brand new with full warranty.

True enough in my case. I didn't look hard, and some would say it was an impulse buy, but I bought my BX new as the selection of almost new BX's didn't exist. And I surely didn't want a heavily used machine with unknown issues to be my first to learn on. Very glad I did buy new.

 

[goeduck]

I think if I was paying cash I would try to find a well maintained used tractor that had less than 500 hrs.

This may have been mentioned, but if it was, I did not notice it.

If buying used make sure you check to see that it is paid for in full. If it is not, the tractor will not be yours and you will still be out the money. Buyer beware.

Having said that I have no bought a lot of used equipment, just do your homework.

 

[oosik]

I bought my Kubota new, from the dealer, with cash in 2009. I bought my 2018 Ram Power Wagon new, from the dealer, in Jan 2019, with cash. Both said the same thing. They really don't care - cash or financing. They will get their money, up front, and right now.

You will get whatever from the dealer or manufacturer based upon their current incentive programs. Not because you are paying cash or are financing.

I just HATE monthly payments. I would rather wait, save up and pay with cash.

 

[Diggin It]

^^ See, here's the thing. OK, everybody has their own thing, I get that.

In my case, I was 'making' more than the loan payment interest. My loan is under 5% and I was 'making' closer to 10% for several years on the investment returns the loan payment is being drawn from. I say 'was' because somebody in their infinite wisdom decided to rain orange across the market and things have changed. It looks like I'll still be yielding better than 5% though over time. So, all that said, paying cash would have cost me the loss of some yields.

I'm not sure that bundle of words makes sense to anyone other than me, but I have some trouble concentrating lately.

 

[looch]

I bought my Kubota new, from the dealer, with cash in 2009. I bought my 2018 Ram Power Wagon new, from the dealer, in Jan 2019, with cash. Both said the same thing. They really don't care - cash or financing. They will get their money, up front, and right now.

You will get whatever from the dealer or manufacturer based upon their current incentive programs. Not because you are paying cash or are financing.

I just HATE monthly payments. I would rather wait, save up and pay with cash.

My post won't necessarily be relevant to the op, but wanted to comment.

I also hate payments. I particularly hate 0% interest rate loans as they offer no incentive to pay down early. Back a ways, I financed my 1st new tractor (with a bunch of implements) at 0%. The problem was that I did not have a great cash flow at the time. I could afford it, but it was a major annoyance to have this monthly payment hanging around that offered me nothing in exchange for paying off early. Having a better cash flow would have made that 0% interest rate more tolerable.

 

[dragoneggs]

My post won't necessarily be relevant to the op, but wanted to comment.

I also hate payments. I particularly hate 0% interest rate loans as they offer no incentive to pay down early. Back a ways, I financed my 1st new tractor (with a bunch of implements) at 0%. The problem was that I did not have a great cash flow at the time. I could afford it, but it was a major annoyance to have this monthly payment hanging around that offered me nothing in exchange for paying off early. Having a better cash flow would have made that 0% interest rate more tolerable.

You shouldn't expect an incentive to pay off a 0% off early. As long as you did pay more than you would have on a cash deal then you have the best of circumstances. You can pay it off early or ride it out while your money in hand works for you in other ways (interest or other buying needs).

 

[looch]

You shouldn't expect an incentive to pay off a 0% off early. As long as you did pay more than you would have on a cash deal then you have the best of circumstances. You can pay it off early or ride it out while your money in hand works for you in other ways (interest or other buying needs).

I wasn't clear on my definition of "incentive." Since the loan costs nothing, paying it off early does not save interest, whereas a loan with an interest rate greater than zero, the earlier it is paid it off, the better. That's what I meant by incentive, as in "the potential to save money."

And to your point, one might argue that a 0% interest loan provides the most benefit to an individual who doesn't need it - i.e. someone who has the cash to buy outright. Say an item costs $25K and is being offered with a 0% interest loan over 5 years. One who has that amount in cash could set up a series of term deposits (or other investment product) to come to maturity in 1, 2, 3, and 4 years, paying the loan down with those funds while making some modest investment income in the process.

 

[dragoneggs]

I wasn't clear on my definition of "incentive." Since the loan costs nothing, paying it off early does not save interest, whereas a loan with an interest rate greater than zero, the earlier it is paid it off, the better. That's what I meant by incentive, as in "the potential to save money."

And to your point, one might argue that a 0% interest loan provides the most benefit to an individual who doesn't need it - i.e. someone who has the cash to buy outright. Say an item costs $25K and is being offered with a 0% interest loan over 5 years. One who has that amount in cash could set up a series of term deposits (or other investment product) to come to maturity in 1, 2, 3, and 4 years, paying the loan down with those funds while making some modest investment income in the process.

:drink:

 

[tradosaurus]

I bought my Kubota new, from the dealer, with cash in 2009. I bought my 2018 Ram Power Wagon new, from the dealer, in Jan 2019, with cash. Both said the same thing. They really don't care - cash or financing. They will get their money, up front, and right now.

You will get whatever from the dealer or manufacturer based upon their current incentive programs. Not because you are paying cash or are financing.

I just HATE monthly payments. I would rather wait, save up and pay with cash.

Smart man. After 53 years I still haven't learned that lesson. :laughing:

 

[Citydude]

^^ See, here's the thing. OK, everybody has their own thing, I get that.

In my case, I was 'making' more than the loan payment interest. My loan is under 5% and I was 'making' closer to 10% for several years on the investment returns the loan payment is being drawn from. I say 'was' because somebody in their infinite wisdom decided to rain orange across the market and things have changed. It looks like I'll still be yielding better than 5% though over time. So, all that said, paying cash would have cost me the loss of some yields.

I'm not sure that bundle of words makes sense to anyone other than me, but I have some trouble concentrating lately.

Makes perfect sense. That's what I do. My investments make my tractor payments.