Financing 0 % financing

[kaferhaus]

The $10,000 figure is correct.

30,000 loan at 4.99%

Interest = $3120.00

Return on money market investment at 7% (easily done)

Investment return = $4464.00

Inflation (loss of your money's value over time due to increased costs) 3% annually.

Inflation = $3600.00

Cost of money over time in true dollars = $11,184.00

Obviously this only works IF you have the cash and don't invest it.

If you don't have the cash, subtract the investment losses and that's the cost of your money.

Even at the 5% rate, if you have the cash, taking the loan is the way to go IF you invest the cash.

 

[crazyal]

It all depends on what you can afford. If you don't have the extra money for the 3 year no interest then it's not an option. You'll either have to go with the 4 year (or longer) or save up and hope Kubota (or whoever) offers it again when you can afford the 0% intrest payments. That $2924.28 is about $2 a day. Is the $133.09 less a month you'll pay but the extra year you'll be paying it worth it? Only you can answer that but don't forget the quality of life factor too. That $133 savings could be spent elsewhere for some other form of enjoyment.

 

[GaryCrowell]

The
Return on money market investment at 7% (easily done)

I'd like to know where there's a money market account paying 7%. In recent years the stock market would usually yield 7%, but you've got the risk of losing that much or more to go along with it. The highest CD I've seen over the last couple of years was 5.5.

I'm not trying to be a jerk, but I often see folks making claims that they can earn high interest rates with no risk. Maybe they know something I don't, but I haven't seen it. What are the basis of these claims?

 

[Turbys_1700]

Of anyone who has paid cash in lieu of the 0% financing, has anyone ever recieved a discount on the purchase price of the tractor? I would think that a substantial discount would / could apply to cash purchases if the dealer has to participate in the low financing option.

 

[witel]

Of anyone who has paid cash in lieu of the 0% financing, has anyone ever recieved a discount on the purchase price of the tractor? I would think that a substantial discount would / could apply to cash purchases if the dealer has to participate in the low financing option.

Kubota offers some instant rebates. I've noticed that the rebate amount is less and less each quarter when they update the site. For instance, the rebate for the L39 (that I've been looking at) was $1500 last quarter, and is half that at $750 this quarter.

 

[riptides]

Of anyone who has paid cash in lieu of the 0% financing, has anyone ever recieved a discount on the purchase price of the tractor? I would think that a substantial discount would / could apply to cash purchases if the dealer has to participate in the low financing option.

I always ask for discounts on cash first when starting the negotiations
on pricing. These past few years with 0 percent, it was a mute point with me.


Some dealers deal, others don't, cash maked no difference to the sellers I bought from. But, like I said, I always bring it up.

-Mike Z.

 

[N80]

Most dealers, especially car dealers, don't give a rip about someone paying cash up front since most dealers are doing the financing and making their money that way.

I take a totally opposite approach. I deal based on the the sticker price only. They moan and groan and act like you are killing them, but they go back to the finance manager who lowers the sticker price but happily jacks the interest rate through the roof.

The last truck I bought I walked out of the dealer with an interest rate of 10%!!!

Of course as soon as I got home I re-financed with USAA at about 4%.

The dealer called back about a month later wondering if we weren't happy with their financing!

 

[kcook]

Most dealers, especially car dealers, don't give a rip about someone paying cash up front since most dealers are doing the financing and making their money that way.

I take a totally opposite approach. I deal based on the the sticker price only. They moan and groan and act like you are killing them, but they go back to the finance manager who lowers the sticker price but happily jacks the interest rate through the roof.

The last truck I bought I walked out of the dealer with an interest rate of 10%!!!

Of course as soon as I got home I re-financed with USAA at about 4%.

The dealer called back about a month later wondering if we weren't happy with their financing!

I agree about Financing, I have also been told some banks will give a kick back if they can get the dealers to sell higher interest rates.

KC

 

[N80]

I'd like to know where there's a money market account paying 7%.

Bingo. If there is one, let's don't keep it a secret! I'll cash out my 401K for money markets!

I did the 0% on my L4400. Put about 1/3 down to get payments reasonable. Paid for about 8 months and then got a little bonus at work and paid it off. For a cautious person like myself, paying no interest now is better than possible interest dividends somewhere else.

 

[thatguy]

I love that approach.. I would have never thought if doing it that way

brian

Most dealers, especially car dealers, don't give a rip about someone paying cash up front since most dealers are doing the financing and making their money that way.

I take a totally opposite approach. I deal based on the the sticker price only. They moan and groan and act like you are killing them, but they go back to the finance manager who lowers the sticker price but happily jacks the interest rate through the roof.

The last truck I bought I walked out of the dealer with an interest rate of 10%!!!

Of course as soon as I got home I re-financed with USAA at about 4%.

The dealer called back about a month later wondering if we weren't happy with their financing!