Compact Tractor Financing Comparison - Hopefully this helps someone

   / Compact Tractor Financing Comparison - Hopefully this helps someone #31  

nards444

Platinum Member
Joined
Mar 26, 2019
Messages
544
Location
New York
Tractor
H254
Good advice. OR keep 6-12 months of cash invested in a ROTH IRA that carries no penalty for withdrawals.....

usually a 10% hit if you arent 59.5. So I would suggest a money market or liquid able CD. End of the day this is money to gain access to now if you need it, chances are you wont gain much interest off of it, so really just keeping it in a bank is probably the best idea.

Really if you keep your bills to around 50% that includes house, food, cars, allocate 10% to retirement, probably 5-10% to savings/ emergency fund. should leave you around 30% of your paycheck to buy whatver you want.
 
   / Compact Tractor Financing Comparison - Hopefully this helps someone #32  

Handloader109

Gold Member
Joined
Jan 7, 2016
Messages
394
Location
Springdale ar
Tractor
Cabelas 25
I sell tractors and zero turns. I can give a person 4.5% a tractor for paying cash/check. When we finance 4.5% gets taken out of our profits. Every month I have to check what the new "dealer buy down" is. So you do pay more for 0%. I have found everywhere else that offers 0% (non tractor stuff) I always ask for 4-5% off for cash, haven't been turned down yet.
This is THE answer to you guys that think zero percent is cheaper or even equal. 4.5% on 15k tractor is $675. or the $700 kubota offered me as cash discount 3 yrs ago. pay cash guys.
 
   / Compact Tractor Financing Comparison - Hopefully this helps someone #33  

KennyG

Elite Member
Joined
Jan 13, 2011
Messages
3,998
Location
SW Michigan
Tractor
John Deere 2320
This is THE answer to you guys that think zero percent is cheaper or even equal. 4.5% on 15k tractor is $675. or the $700 kubota offered me as cash discount 3 yrs ago. pay cash guys.

It's the answer if the financing requires dealer participation. Sometimes it does and sometimes it doesn't. You have to ask. If the dealer won't give you a discount for paying cash, the financing comes from the manufacturer and you should take it.
 
   / Compact Tractor Financing Comparison - Hopefully this helps someone #34  

nards444

Platinum Member
Joined
Mar 26, 2019
Messages
544
Location
New York
Tractor
H254
It's the answer if the financing requires dealer participation. Sometimes it does and sometimes it doesn't. You have to ask. If the dealer won't give you a discount for paying cash, the financing comes from the manufacturer and you should take it.

yup and whats $700 anyways in comparison to keeping your money for other things. Again I have no issue with either method of buying. But buying with cash comes with very little benefits if any.
 
   / Compact Tractor Financing Comparison - Hopefully this helps someone #35  

RSR

Platinum Member
Joined
Nov 29, 2017
Messages
688
Location
North Country, NY
Tractor
LS XR4145HC
yup and whats $700 anyways in comparison to keeping your money for other things.


And that mentality is precisely why consumer debt continues to explode, and people can't afford simple unexpected expenses.

Few have the discipline to use any extra money judiciously. Most just go further into debt buying a new toy with the money they "saved."
 
   / Compact Tractor Financing Comparison - Hopefully this helps someone #36  

chas0218

Gold Member
Joined
Apr 10, 2018
Messages
253
Location
Southern Tier N.Y.
Tractor
LS MT235E
I probably should let this go, but when there is a 0% (or any low interest rate) promotion, you have to ask "Is there dealer participation?" If there is not, the factory does the financing and the cash and financed price is the same. If the dealer has to "participate" he can discount for cash. Some states require this to be disclosed in the fine print. Just ask and the dealer will tell you. I got 3 year 0% on my John Deere, same price as cash. 4 or 5 year 0% was available, but the dealer said he had to increase the price for those deals because it cost him.

Usually the manufacturer will build the cost of the financing to buy down from the bank into the price of the tractor. It's all "smoke and mirrors" as a lot of people would call it. You'll see tractor prices vary by $1000 or $2000 or see a "finance charge" that re-coops some of the cost of the manufacturer buying down interest rates.

We just financed our tractor with 3.99% and the difference between 60 and 84 months in interest was minimal with $3000 down. We financed for 60 months to get rid of the payment faster but 84 would have given us quite a bit smaller payment.

0% would have drove the tractor cost up 4% on top of the 3.99% so basically 8% added cost of the tractor over the TERM of the loan that would have accounted for the interest paid at the 3.99%.

Financing is a whole lot of trickery and you can get really screwed if you don't watch what you're signing.
 
   / Compact Tractor Financing Comparison - Hopefully this helps someone #37  

nards444

Platinum Member
Joined
Mar 26, 2019
Messages
544
Location
New York
Tractor
H254
And that mentality is precisely why consumer debt continues to explode, and people can't afford simple unexpected expenses.

Few have the discipline to use any extra money judiciously. Most just go further into debt buying a new toy with the money they "saved."

Thing is its just about as mindless to not understand how to work the system to your advantage and think cash is king. People are going to get the next toy regardless just the way it is. But if your looking at the this situation by its self only $700 is nothing in the big picture.

End of the day its usually simple math, if it works it works, doesn't always work but if you are smart and have other things figured out it can usually work. .
 
Last edited:
   / Compact Tractor Financing Comparison - Hopefully this helps someone #38  

KennyG

Elite Member
Joined
Jan 13, 2011
Messages
3,998
Location
SW Michigan
Tractor
John Deere 2320
Using financing is a matter of discipline. A lot of people would say I'm crazy to have a mortgage when I'm over 70 and have the money to pay it off. But my investments averaged over 20% this year compared to my 3% mortgage.
 
   / Compact Tractor Financing Comparison - Hopefully this helps someone #39  

finn1

Platinum Member
Joined
May 10, 2009
Messages
822
Location
Upper Michigan, Marana Az.
Tractor
Kioti CK4010 hst, Cab, Deere 26G excavator, K1500 w/ Boss 7’6” plow, F450 dump W/ Boss 10’ straight blade Super Duty plow, F250 reg cab, F350 cc drw, Case TR310 CTL
I’m with KennyG. Just bought a winter house in Tucson and took a 3% fifteen year mortgage, and I am well into retirement. Haven’t worked in 11 years. Same with my tractor a couple of years ago: 2.48% at the credit union, and leave the money in investments.

I could have paid cash for both, but why? As long as your cash flow is positive, it just doesn’t make sense to cash in your investment portfolio with interest rates as low as they have been for the past dozen years.

The strategy doesn’t work if interest rates on borrowed money increase dramatically, though.
 
   / Compact Tractor Financing Comparison - Hopefully this helps someone #40  

desertdog71

Silver Member
Joined
Jan 10, 2020
Messages
198
Location
Southeast, Kansas
Tractor
Branson 2510H
If I get 3% or better on financing I always go that route. I go a little higher on investment properties but someone else is paying my bills for those. It's all math, and if the numbers work, they work. Cash is fine too and not all "investment" money is in 401K or IRA's sometimes a straight brokerage account is the way to go, not everything is tax advantaged once you reach a certain point. Make your cash work for you if you can. Inflation is about 3% so if you borrow at that rate or below you should break even or better. That frees up your cash to be used other places that may pay you a pretty good return. It's all a risk of course but such is life.
 
 
Top