Brand new tractor...appraisal?

[workinonit]

Besides that, if the argument is keeping money "local" to pay local wages, my JD dealer employs a dozen individuals that live within 5 minutes of my house. Not to mention the fact that they support local charities and money raising events in the community. I play golf with several of their employees and they assist our small, almost broke golf course with aquisition of used golf course equipment and they also support our fund raising efforts. You can't get much more "local" than that.

John Deere is much more active in our community than the local banks and credit unions. Heck, my wife is a VP with a local hometown bank. They do participate in community efforts but nothing compared to JD.

 

[RickB]

Where you finance a tractor has zero to do with supporting the dealer one chooses to buy from.

 

[RickB]

Sorry if you take it that way, I was not trying to be argumentative, I was replying to the comment you made on my post, about banks providing jobs. I thought of it as a friendly debate. Quite simply, I don't think that tractor loans come anywhere close to where home mortgages, auto loans and personal loans make profit for the bank. The OP and I both have given examples where our CU (or bank?) have been unable, unwilling, or have at least made it difficult to write a loan for a new tractor. It seems likely that this has contributed to tractor manufacturers making it easier for consumers to get these loans for their own business interest, that is to make it easier for customers to buy their tractors. That is a good thing. In fact, the competition among the tractor manufacturers has gotten to the point where they offer either low or zero interest for their customers. Hard to compete with "free". There is a similar trend with cars, furniture and appliances, and all sorts of other major purchases. The banks still hold their niche in their core business, mortgage and personal loans.

Exactly how Walmart and Amazon got where they are today.

 

[IndyJay]

 

[LS Tractor Owner]

How much lower could the CU interest rate possibly be? Go buy a green or orange tractor and you won't have any interest.

NOTHING is 0% interest.... you're paying it upfront in the cost of the tractor.
PLUS, the big K or JD are gonna cost a lot more to begin with!

 

[workinonit]

There's usually a good reason for that.

 

[Torvy]

NOTHING is 0% interest.... you're paying it upfront in the cost of the tractor.
PLUS, the big K or JD are gonna cost a lot more to begin with!

That's only if you are getting 0% from the dealer's in house financing. Those of us with great credit get those terms. It helps finance companies borrow money by having stronger assets. True, it is not 'free' money, but the tab is being picked up by those who don't manage their credit well. If all of their loans were high risk, they would not be able to lend.

Never negotiate the payment method with the out the door price. Get the price you want first, then do financing (or better, get a pre-approval from lender, first). You can always switch if you get better terms through the dealership.

As for CU versus banks, the CU has a decided advantage in that they do not need to provide ROI to investors. As for local, every situation is different. Maybe OP's CU is a small local and the banks are regional or national. Even if a small institution is paying someone out of state to do payment processing, the assets are still held locally. Money is just a store of value. Digital money is just accounting for that value and moving it from one entity to another.

 

[KretZ]

The similar unit for an RK55 is a TYM 554.
Why not explain to the loan officer that the tractor is a rebranded TYM 554?

Look on RKTractors.com to find the following verbiage:
"RK Tractors are made in South Korea by TYM, manufacturers of compact tractors for leading U.S. tractor brands, and feature best-in-class Yanmar (19-55HP) and Deutz (74HP) diesel engines. Final assembly takes place in Waverly, OH, and Williston, FL. RK by King Kutter 3-Pt. equipment is made by King Kutter in Winfield AL, and tires & wheels are made by midwest-based and industry leader Titan International. RK provides full service at every RK Tractor location, zero down payment financing for up to 84 months, tractor delivery (for a fee) and an industry leading 8-year limited powertrain (19-55HP) and 5-year limited powertrain (74HP) warranty. We can offer fully-loaded, premium tractors at very low prices because we buy directly from the manufacturer. We can proudly say that you will not find a better value in sub-compact, compact or utility tractors anywhere!"

You hit the nail on the head

 

[KretZ]

UPDATE After calling around yesterday to local used tractor dealerships and having them tell me “we don’t do that, why not just buy a tractor from us” I talked to the sales guy at RK. He suggested it might be because it’s a tym tractor that’s been re-branded. Called them back and explained, and the difficulties were worked out.

As to local vs big national financing source, I had never thought of it. The wife suggested it. She has been reading some things about big corporate banks and how what they do with your loan (bundling it with other loans and selling it as a security to other banks) is bad for the economy and the country. You as the customer don’t realize they have done this because they are still the one servicing the loan. I am not a finance wizard, I handle my own finances, I have good credit and that’s about it. So I can’t debate whether or not it’s true. But it sounds plausible. If the local CU does well, they take their profits and offer loans to people and businesses in the local area at reasonable rates, then the area you live in does well and there you have it. Anyway thanks for all the info.

 

[Torvy]

Glad to hear it worked out!

I spent over 25+ of my life working in financial services. Bundling loans and selling them is a long time practice. It helps the economy, if anything, because it makes more money available for people to use. It is really no different than selling a used piece of equipment, bit offering to handle the maintenance for a small fee. At least, to a point. Some banks did use the concept to write bad loans and bury them. Ultimately, that boondoggle rests squarely on the shoulders of politicians who pushed banks to make those loans...but I cannot discuss that further here.

 

[oosik]

I have a question. Does the lending institution need the appraisal on the new tractor OR the value if it has to be repossessed? The value of the new tractor is the average asking price. The value at any time of repossession will be a virtual unknown. At exactly what time? What is the market for tractors at that time?

Somebody is blowing smoke ..................

 

[k0ua]

Sounds like a case where "keeping it local" is more hassle than its worth. IF they dont want your money, dont give it to them and find a lending institution with less hassle and BS

That was also my first thought. They want you to do the legwork, I would tell them to pound sand.

 

[Torvy]

I have a question. Does the lending institution need the appraisal on the new tractor OR the value if it has to be repossessed? The value of the new tractor is the average asking price. The value at any time of repossession will be a virtual unknown. At exactly what time? What is the market for tractors at that time?

Somebody is blowing smoke ..................

They need to know what it is they are taking as collateral. Most cars have a solid history and lots of data. The bank can just use a schedule and (nowadays) a program does the risk analysis instantly. It factors in depreciation. The only reason purchase price matters is that the bank does not want it too far from the value at that time as most non-land assets depreciate. With a lesser known vehicle, the bank simply didn't know what they were taking and could not fit it into their risk analysis. We had some cars we just wouldn't take...Yugo, for example. We dropped Suzuki, too because the resale became too big of an unknown after 2012 bankruptcy. Some lenders will take on the odd stuff, but at a premium...bigger risk.

 

[MHarryE]

I'm dealing on another tractor. My dealer is NH and Kubota. Kubota offers $2k rebate and 0% interest for 60 months or $5k rebate and cash, or market interest rate. Yesterday market interest rate was about 3.5% so financing with the additional rebate amounted to about $3,000 additional paid over the life of the loan. Local CU has no interest in loaning for farm equipment - cars and boats, yes, equipment no.

 

[LD1]

I'm dealing on another tractor. My dealer is NH and Kubota. Kubota offers $2k rebate and 0% interest for 60 months or $5k rebate and cash, or market interest rate. Yesterday market interest rate was about 3.5% so financing with the additional rebate amounted to about $3,000 additional paid over the life of the loan. Local CU has no interest in loaning for farm equipment - cars and boats, yes, equipment no.

0% OR $5k rebate

Always hated that lingo.

Its NOT interest free....you are just opting to pay all the interest up front. $30k loan, 5 years , 6.25%......$5k in interest.

PAy me 6.25% NOW and I'll make you feel good and call it 0%......or we can knock 5k off the load and charge you 6.25%.....SAME DAMN MONTHY PAYMENT. But some people fall for it

 

[PILOON]

When they advertise at 0% loans, just try to get a discount for cash.
They won't do it as most times a kickback is somewhere in that 0% loan and the sales person gets no remuneration other than his base salary but gets a % of the 'kickback'.

Back when I was selling fork lifts I needed to get same rates info for a client and the boss was out so I called the lenders directly.
First question was what % kickback would the transaction be able to support followed by what industry was it to be used in.

I did make that sale but it was not my assigned territory so I received zilch commission and not even a 'thanks' from that area rep.

That was my first and only commission type job!

 

[Torvy]

0% OR $5k rebate

Always hated that lingo.

Its NOT interest free....you are just opting to pay all the interest up front. $30k loan, 5 years , 6.25%......$5k in interest.

PAy me 6.25% NOW and I'll make you feel good and call it 0%......or we can knock 5k off the load and charge you 6.25%.....SAME DAMN MONTHY PAYMENT. But some people fall for it

When it is either/or that is a bad deal. I've never had a problem getting both. Sure, the zero percent gets paid by someone, but I am happy to let the cash buyers pay part of my expense while I keep my money invested.

Same principle applies when businesses are 'taxed'. No possible way to really tax a business, it just hits their customers and employees. Just a shell game played by people who shall not be named but who impose taxes.

 

[scaredychicken]

brochure, quote, invoice ought to be sufficient.

some brands have better financing than C U

 

[ArlyA]

Some manufactures don't like to do discounts but will offer zero% financing. If you have the cash to get it, you are better off getting zero% financing and put that cash in the bank or someplace you can gain some interest..

 

[fried1765]

Some manufactures don't like to do discounts but will offer zero% financing. If you have the cash to get it, you are better off getting zero% financing and put that cash in the bank or someplace you can gain some interest..

True zero % financing is exactly like the Easter bunny!
I does not exist!