Interest Free Financing

[R Barger]

When you can buy a tractor $3500.00 cheaper for cash how is that interest Free financing?

 

[CloverKnollFarms]

When you can buy a tractor $3500.00 cheaper for cash how is that interest Free financing?

Well, you are right. It's not.

Nobody lends money for free... That is just bad business sense.

Or, they offer 0% financing because they have already rolled it into the MSRP and EVERYONE pays for it

 

[WM75Guy]

Marketing gimmick. You still pay interest, it is rolled into your final price. Hence the cash discount if you don't go the 0% route, they subtract the interest from the final price. Usually 0% financing allows people who cannot make a large down payment or pay cash for something to buy on credit. But sometimes the cash discount is so small that 0% makes better financial sense. When I bought our Kubota RTV-X I had the option of $300 cash discount or 0% for 48 months. The $15,000 I would have paid for the cash discount makes me $600/yr in interest, so I opted for the 0% financing and left my money in the bank. I don't mind using other people's money if it makes me money.

 

[EddieWalker]

I ignore the wording invented by the Marketing Department and run the numbers when buying.

For me, interest free financing added a little over $3,000 to the cost of my tractor, but the lowest interest rate they offered added more than twice that much by the time the loan was paid for.

 

[ArlyA]

When sales drop for any ol product, company's sometimes lower the prices, or offer lower or free interest rates to keep the production line going. A plant shutting down, then reopening it a year later is quite costly. We got zero percent on our Ranger back in 2019. Was that just stupid? Not everyone is sitting with a bank account full of $$.

 

[CloverKnollFarms]

No, because they keep paying interest

 

[Rdrcr]

Some dealers pay the finance charge for the customer making the cash price the same as finance price.
But, ultimately, yes, someone is paying for the interest.

Mike