Buying outright vs Financing? Any advantage?

[Alan L.]

You should be able to make a better deal for cash. That 0% financing is not free to them. The present value of a stream of payments into the future is about what the cash price should be to be equivalent. That figure is less than the amount financed by the interest factor. Its there, they just put it on a different place of the contract, an increase in the selling price.

 

[Alan L.]

You should be able to make a better deal for cash. That 0% financing is not free to them. The present value of a stream of payments into the future is about what the cash price should be to be equivalent. That figure is less than the amount financed by the interest factor. Its there, they just put it on a different place of the contract, an increase in the selling price.

 

[YanmarFever]

<font color="blue"> (Homeowners insurance will more than cover the cost of the tractor if your place burns or something.) </font>

With homeowners insurance the minute your tractor leaves your property (it is uninsured) lend it to a neighbor & its uninsured, pull it on your trailer & its the same you get the picture.

With agricredit insurance the average policy is 6 to 7 bucks a month, and the tractor is insured anywhere, anytime, even if its abducted ! /forums/images/graemlins/blush.gif
Ernie

 

[YanmarFever]

<font color="blue"> (Homeowners insurance will more than cover the cost of the tractor if your place burns or something.) </font>

With homeowners insurance the minute your tractor leaves your property (it is uninsured) lend it to a neighbor & its uninsured, pull it on your trailer & its the same you get the picture.

With agricredit insurance the average policy is 6 to 7 bucks a month, and the tractor is insured anywhere, anytime, even if its abducted ! /forums/images/graemlins/blush.gif
Ernie

 

[RalphVa]

The world does not owe us a new tractor nor a new car. The philoosphy I've followed is if I don't have the money for a new one, I buy what I can afford. My first car was $50. I could afford that. My first tractor was a Gravely with a bunch of attachments for $3,800. I could afford that. It beat me to death in some ways and threw me off the sulky a couple times, but it did mostly what I needed to do at the time.

When it came time to buy my JD, I'd saved my new social security for about 6 months and had some other money come it. So, I paid cash for it with its FEL and LX4. Otherwise, I'd have waited until I could pay for it before buying it.

You pay dearly buying on credit. The only credit I use is a mortgage and credit cards. Credit cards are great. You generally don't have to pay for it at least for a month. Gotta manage them well though.

Ralph

 

[RalphVa]

The world does not owe us a new tractor nor a new car. The philoosphy I've followed is if I don't have the money for a new one, I buy what I can afford. My first car was $50. I could afford that. My first tractor was a Gravely with a bunch of attachments for $3,800. I could afford that. It beat me to death in some ways and threw me off the sulky a couple times, but it did mostly what I needed to do at the time.

When it came time to buy my JD, I'd saved my new social security for about 6 months and had some other money come it. So, I paid cash for it with its FEL and LX4. Otherwise, I'd have waited until I could pay for it before buying it.

You pay dearly buying on credit. The only credit I use is a mortgage and credit cards. Credit cards are great. You generally don't have to pay for it at least for a month. Gotta manage them well though.

Ralph

 

[robison]

With the exception of 0% or other subsidized programs from the factory - for which there may be a cost to the dealer - dealers make money financing vehicles.

In the car business more profit comes from originating the loan and selling extended warranty and other finance products than from the car sale itself.

Tractors are not as competitive as cars, but it's till true that dealers will make money on regular financing deals. So cash does not improve your bargaining position.

While we are on this subject I'd like to offer one more thought from my perspective of 25 years as a car dealer . . . cash itself. We cannot accept large amounts of actual currency for a car purchase unless the buyer fills out a currency transaction report that we file with the IRS. In some parts of the country there have been criminal prosecutions of car dealers over this, for assisting unwittingly in money laundering.

I suspect most tractor dealers are aware of this rule, too. When most people speak of cash the mean a bank check, a personal check, or some other instrument which does not require a CTR.

 

[robison]

With the exception of 0% or other subsidized programs from the factory - for which there may be a cost to the dealer - dealers make money financing vehicles.

In the car business more profit comes from originating the loan and selling extended warranty and other finance products than from the car sale itself.

Tractors are not as competitive as cars, but it's till true that dealers will make money on regular financing deals. So cash does not improve your bargaining position.

While we are on this subject I'd like to offer one more thought from my perspective of 25 years as a car dealer . . . cash itself. We cannot accept large amounts of actual currency for a car purchase unless the buyer fills out a currency transaction report that we file with the IRS. In some parts of the country there have been criminal prosecutions of car dealers over this, for assisting unwittingly in money laundering.

I suspect most tractor dealers are aware of this rule, too. When most people speak of cash the mean a bank check, a personal check, or some other instrument which does not require a CTR.

 

[KiotiJohn]

</font><font color="blue" class="small">( (Homeowners insurance will more than cover the cost of the tractor if your place burns or something.) )</font>
Be careful to know what your homeowner's policy covers. Most often, the tractor is not covered if you go off property.

Dealers get a part of the initiation fees when the financing is done, so some may prefer that you go that route. Many do offer 0% financing, and if you've made a good deal, it's a good way to earn a small amount on their money. I did that myself simply because it WAS 0%, and I got as good a deal as anyone I know. Kioti offers cash back/discounted off, for cash. Making the best deal possible and then deciding may be the way to go.

The person that posted that his dealer charged him more after discovering he wanted to finance is upsetting. Obviously the dealer didn't give the best price upfront and then got part of the initiation fees for setting up the financing. The buyer paid extra extra.
John

 

[KiotiJohn]

</font><font color="blue" class="small">( (Homeowners insurance will more than cover the cost of the tractor if your place burns or something.) )</font>
Be careful to know what your homeowner's policy covers. Most often, the tractor is not covered if you go off property.

Dealers get a part of the initiation fees when the financing is done, so some may prefer that you go that route. Many do offer 0% financing, and if you've made a good deal, it's a good way to earn a small amount on their money. I did that myself simply because it WAS 0%, and I got as good a deal as anyone I know. Kioti offers cash back/discounted off, for cash. Making the best deal possible and then deciding may be the way to go.

The person that posted that his dealer charged him more after discovering he wanted to finance is upsetting. Obviously the dealer didn't give the best price upfront and then got part of the initiation fees for setting up the financing. The buyer paid extra extra.
John