Compact Tractor Financing Comparison - Hopefully this helps someone

[Takman]

Cash/check/card is all the same to my business and gets a discount over financing.

 

[NEEDLES617]

Trying to make sense of it all and wanted to share. Doesn't include tax, insurance or implements. All machines are HST with a FEL. Yellow cells mean the rate wasnt listed but was inferred off rates used for lower months. Prices are based on manufacturer website and may not be entirely accurate due to dealer incentives.

Also - Did all of this, still dont have a **** clue what the best choice is. Excel screen shot attached. View attachment 635092

Wow..the Branson was that much? TYM looks like a deal on paper there. Idk what financing youre using, but from the TYM dealer the financing is 5.49% right now.

 

[chim]

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................................................

Unless the tractor is 100% profit, you sure are getting great treatment by the manufacturer.

Example - Tractor is $10,000 and assuming your margin is 15%, or $1,500.

Customer gets 4.5% of the tractor which is $450 discount and the manufacturer takes 4.5% of your $1,500 profit which is $67.50

 

[tduby]

Thing to remember with Kubota is Japan’s interest rate is usually negative so Kubota can borrow money build a tractor with a 0% interest loan and still come out ahead.

 

[desertdog71]

84 months seems like a person cant afford one. I paid cash for mine. In 10 years we will see longer term loans. Its a guarantee. I don't like that personally as i believe 84 is far to long. Its gonna make big trouble.

Depends on the interest rate. If it's less than 3% I'll take terms all day, every day. Assuming the price is equal. You have to account for opportunity cost of having your cash tied up in a piece of equipment. You can also get a greater rate of return on your money than 3% and have a net gain over time instead of cash tied up in a depreciating asset.

 

[RSR]

Depends on the interest rate. If it's less than 3% I'll take terms all day, every day. Assuming the price is equal. You have to account for opportunity cost of having your cash tied up in a piece of equipment. You can also get a greater rate of return on your money than 3% and have a net gain over time instead of cash tied up in a depreciating asset.

That's true, but that makes a VERY big assumption that someone will have the discipline to finance the tractor, and then wisely invest their money, instead of spending it on something else.

It's possible, and a very few number of people do that successfully, but I think to most individuals it is simply a justification for financing something that they can then spend their hard earned money on something else.

I think that's why 60% of Americans can't afford an unexpected $1,000 expense. Because they are wisely financing their purchases so they have more money to invest...

 

[desertdog71]

That's true, but that makes a VERY big assumption that someone will have the discipline to finance the tractor, and then wisely invest their money, instead of spending it on something else.

It's possible, and a very few number of people do that successfully, but I think to most individuals it is simply a justification for financing something that they can then spend their hard earned money on something else.

I think that's why 60% of Americans can't afford an unexpected $1,000 expense. Because they are wisely financing their purchases so they have more money to invest...

I agree with you 100% most folks are not disciplined. I only borrow if the rate is stupid low, otherwise I pay cash. I wouldn't borrow a dime if it's going to stress you out and you're worried about paying the bill. That doesn't stop people though, I see plenty of folks in my area driving way more expensive vehicles than me and I $200K a year. I bought a base model pickup with rubber floors and cloth seats:laughing:

 

[finn1]

If you don’t have the discipline to have an investment plan, maybe wou shouldn’t borrow foe a tractor if the tractor is a toy. If it is a tool that helps earn a living, nothing wrong with financing at a low interest rate.

If you do have a strong financial plan and investment strategy, you would bee foolish to ignore leveraging through borrowing at a low rate. Some people will never understand, though. My mother, who was born on November 28, 1929, never understood.

In my case , had I liquidated investments two and a half years ago instead of taking a small loan at my credit union to finance my tractor at 2.48%, I would have missed out on a 30% return on that investment.

Also, look at the details on that clickbait claim that 60% of Americans are without access to $1000 in cash. Clickbate stories are there to grab headlines and rarely stand up when you drill into the details.

 

[nards444]

If you don’t have the discipline to have an investment plan, maybe wou shouldn’t borrow foe a tractor if the tractor is a toy. If it is a tool that helps earn a living, nothing wrong with financing at a low interest rate.

If you do have a strong financial plan and investment strategy, you would bee foolish to ignore leveraging through borrowing at a low rate. Some people will never understand, though. My mother, who was born on November 28, 1929, never understood.

In my case , had I liquidated investments two and a half years ago instead of taking a small loan at my credit union to finance my tractor at 2.48%, I would have missed out on a 30% return on that investment.

Also, look at the details on that clickbait claim that 60% of Americans are without access to $1000 in cash. Clickbate stories are there to grab headlines and rarely stand up when you drill into the details.

Yes it kills me. I have friends in 2020 and still dont understand leveraging borrowing and have this cash is king mentality. Anything under 2-3% interest is a no brainer to finance, when you figure ROI on investments, keeping your cash for other things etc.

What kills people is the payment mentality. The idea of another 200 a month wont hurt, then another 150 a month. That is where people ultimately get off the rails. Follow the golden rules of pay the bills, invest 10% into retirement, have another 6-12 months of cash on hand at minimum for emergencies and youll be fine.

 

[polarred21]

Follow the golden rules of pay the bills, invest 10% into retirement, have another 6-12 months of cash on hand at minimum for emergencies and youll be fine.

Good advice. OR keep 6-12 months of cash invested in a ROTH IRA that carries no penalty for withdrawals.....