Are CUT Manufacturers pricing themselves out of the market?

[jyoutz]

I’m not sure why they had the 0% when I bought my JD. It was already discounted more than I expected and they had an additional discount if you bought two implements. They had an additional discount if you took the 0% financing for 5 years, $500 as I recall. I asked for a cash discount instead, nope, you have to finance. My trade in covered the down payment and we made a payment once a year, so I had the tractor a year before we made a payment.

I don’t know if they hope people miss a payment so they can whack them with a finance charge?

I think they cover the finance charges with the required insurance purchase.

 

[WM75Guy]

I think they cover the finance charges with the required insurance purchase.

I wasn't required to use KTAC insurance as TFB was able to meet their requirements. In my case the $300 cash discount works out to 1.9% of the purchase price. Going with 0% means that $300 worth of interest added to the purchase price. It is really a way for someone with less than perfect credit and no cash for a down payment to buy a tractor. If you pay it off early there is no pre-payment penalty. That is a win for Kubota as they still get all the interest as it was rolled into the total price. If you go with regular financing paying it off early saves you some interest.

 

[quicksandfarmer]

The thing to realize is that the tractor is owned by the dealer, but the manufacturer provides financing.

The manufacturer sells the tractor to the dealer, and then the dealer tries to sell it to you. Until the dealer sells the tractors on the lot, the manufacturer can't sell the dealer more tractors. So what's the manufacturer to do if they're not selling? They can't lower the price, the tractor has already been sold. And lowering the price on new tractors just makes it harder for the dealer to sell the ones they already have.

So the manufacturer offers incentives to the customer that effectively lower the price. Subsidized financing is one way. That's also why in the automotive world you see manufacturer rebates to the customer.

 

[dodge man]

I think they cover the finance charges with the required insurance purchase.

I got my insurance through State Farm.

 

[jyoutz]

I got my insurance through State Farm.

Kubota requires KTAC insurance if you do financing through them.

 

[WM75Guy]

Kubota requires KTAC insurance if you do financing through them.

Not true. You have to provide proof of insurance that meets their requirements. I financed a new RTV-X at 0% for 36 months today thru Kubota Credit. Texas Farm Bureau provided a binder and signed off on the coverage form. No KTAC insurance required.

 

[jyoutz]

Not true. You have to provide proof of insurance that meets their requirements. I financed a new RTV-X at 0% for 36 months today thru Kubota Credit. Texas Farm Bureau provided a binder and signed off on the coverage form. No KTAC insurance required.

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Maybe the policy has changed? In any regards I’m happy with the KTAC insurance.

 

[Cahaba Valley Farm]

The thing to realize is that the tractor is owned by the dealer, but the manufacturer provides financing.

The manufacturer sells the tractor to the dealer, and then the dealer tries to sell it to you.

That's a good point.

 

[jyoutz]

That's a good point.

Yep. That’s why dealers have little incentive to offer big cash discounts.

 

[dinoedwards]

I can tell you my mf1540, which is classified as a CUT, was most certainly, not a luxury purchase.
It’s used as a machine/tool to get work done, that would otherwise have to done by paying someone else, or manual labor

Guy has a 1998 shuttle model for sale, is that the turbo model and are they any good?