0% loans on new tractors

[DieselBound]

Not sure if it's necessarily all that much hoodwinking than it is in providing options. It's really about placing a wager as to whether one thinks rates will go up or down. Wool-pulling was all the sub-prime loan stuff (though whose eyes the wool was pulled over is debatable). But... I agree, it seems to verge on obscurity- they should be able to hand you a sheet of paper that shows everything (they'll show you a piece of paper for just about anything else up-front to get you to make the deal.

 

[Turbys_1700]

I had tried to trade with my dealer several times in the past. Never got anything other than a low trade in offer. This time he met my trade in price. I told him sure and you will tack the difference onto the sales price. He didn't do it. I asked him what's changed? He wanted the tractor for himself personally. That helped plus with the newer emission tractors on the market the value of my older 1720 has gone up.

On the financing end he was upfront with the difference in the New Holland financing rates and Farm Credit. I never once got the impression he was trying to play me. Straightforward and to the point. At that time he had sold 9 Workmasters and probably a few more by now. New Holland has gotten fairly aggressive with the pricing of that particular model.

 

[jeff9366]

For retirees there is a big income tax bite when withdrawing $40,000 in one tax year from a tax-deferred IRA account for a tractor purchase, in addition to normal living expenses.

Significantly lower income tax bite when financing, withdrawing tractor payments over five years.

 

[MORRISONSTEEL]

And don't forget that when a dealer sells a loan for any lending institution they get a commission. I had a dealer quote me a price on a tractor with 0% financing once. I countered with the question, "what is the cash price?" Reply was, "same price"! I walked.

Not sure that I understand, if said dealer was getting a commission from a retail note then wouldn't they want more money on a cash sale since they are losing said finance commission?

 

[DieselBound]

For retirees there is a big income tax bite when withdrawing $40,000 in one tax year from a tax-deferred IRA account for a tractor purchase, in addition to normal living expenses.

Significantly lower income tax bite when financing, withdrawing tractor payments over five years.

And here's a perfect example of why there's all these different purchasing options. As I'd noted, there are tax implications. And at the rate we're going we'll end up being paid to purchase tractors (negative interest rates)!

 

[Cougsfan]

For retirees there is a big income tax bite when withdrawing $40,000 in one tax year from a tax-deferred IRA account for a tractor purchase, in addition to normal living expenses.

Significantly lower income tax bite when financing, withdrawing tractor payments over five years.

That is complicated by the fact you stop earning interest on that $40k once you withdraw it from your 401K or whatever its in. You almost have to have hire an expert in economics to figure out the best scheme, and if you hired two, they would disagree.

 

[TheMan419]

When I bought mine they were having a couple different deals. As you indicated the total payments always came out the same. I went with the lower price but higher interest rate. Theory being that if I can pay it off early I have saved some money. If I cannot pay it off early both deals were the same so who cares?

As it turns out I have some extra cash to pay, but paying off the truck makes more sense.

 

[jaydee325]

Not sure that I understand, if said dealer was getting a commission from a retail note then wouldn't they want more money on a cash sale since they are losing said finance commission?

They probably do, but that does not happen since price is established before financing discussions begin (usually). Dealers also want to sell you extended warrantees and if you do take a loan they usually offer loan insurance. All at a commission for them. They don't upcharge because you don't buy the extras or the loan because they would not make the sale.

 

[dickfoster]

I just wish people could play straight and honest with you and not try to pull the wool over your eyes. These games tell me that the company I am dealing with doesn't have very high standards of integrity. But unfortunately nearly every dealer or company considers it standard practice to try to trick you in some fashion. So these deceptive practices have slowly evolved into the accepted norm. Anyone who is offended by this is considered old-fashion, idealistic, naive, or a simpleton. That is a shame.

I once had a friend who was an F&I man for an auto dealer. The stories he used to tell me about screwing people over told me all I ever needed to know about buying cars and such from then on. They're mostly crooks. He'd laugh and tell me how he'd talk people out of their credit union to get the loan so he could bag a commission. He called it laying them away. Of course they wound up paying a lot more money. People tend to hear what they want to hear and all the crooks know it so they use people's own greed against them. If it sounds too good to be true it probably is.

 

[MORRISONSTEEL]

They probably do, but that does not happen since price is established before financing discussions begin (usually). Dealers also want to sell you extended warrantees and if you do take a loan they usually offer loan insurance. All at a commission for them. They don't upcharge because you don't buy the extras or the loan because they would not make the sale.

Sorry, that still doesn't make sense to me. successful salespeople typically maintain a specific margin and if that margin changes because of the details of the purchase then no the price has not been set and a good salesperson will adjust the pricing to maintain that margin (that alone does not make a salesperson crooked). You may not agree that a good salesperson is one that maintains his margin but his boss probably does. Some people find it hard to believe that certain organizations think that they are actually worth more selling the same product based on their experience and ability to support after the sale and will gladly let price only motivated purchasers walk right out the door. If done right with the proper after the sale support they ultimately are more successful and breed a higher level of customer loyalty to those that understand that the purchase price is not the end game, the support is. Then of course there are dealers who cater specifically to price only purchasers, they don't always survive through the lean times that happen in the tractor industry.