Dealing on new equipment

[coralhead]

I wonder who is making that money, the dealer or the manufacturer? I am searching for a Kubota and the difference between cash back or 0% financing is only $500. Someone is making a lot of money if you buy in cash.

I am also looking at Mahindra and if you pay in cash there is several thousand dollars difference between between cash and taking 0%.

The salesman got back to me today and said he talked with his kubota rep and he said the most he could get me down for a cash buy was $500. He also said that the 60 month warranty he told me about was good to the end of July. Web site it started in June 2016 with no end date. Doing me a great favor. LOL

When I bought my Branson w/cash we went to the far left column of the pricing structure. Much lower than the financed. Same thing when I priced a Mahindra at the same time.

 

[Turbys_1700]

When I purchased my Workmaster 50 a couple months ago the dealership was advertising the tractor with FEL and R4's on Craigslist for $25,500 or $357/mo with no money down with monthly payment not including insurance and possible taxes. I did see them advertise a cash price on Craigslist for $24,800. That was only one time and several months ago. Cash is king and if you can purchase with it you can save some coin. Different manufacturers have different programs but typically 0% financing usually will have a higher retail selling price than cash.

 

[Indian MC]

I was told when Kubota financed my B2601 last month, Kubota finance required full insurance. I phoned my homeowners and they faxed a binder for only $130.00 per year. It didn't pass Kubota requirements. Kubota wants the machine fully covered off your property. The only way to get that type of coverage with my homeowners was a seperate Bussiness Policy.

 

[RollingsFarms]

I was told when Kubota financed my B2601 last month, Kubota finance required full insurance. I phoned my homeowners and they faxed a binder for only $130.00 per year. It didn't pass Kubota requirements. Kubota wants the machine fully covered off your property. The only way to get that type of coverage with my homeowners was a seperate Bussiness Policy.

Why couldn't you buy the Kubota insurance and finance it in your payments? That's what I did. Best insurance ever! I wish Kubota sold homeowner and vehicle policies.haha

 

[kthompson]

I was told when Kubota financed my B2601 last month, Kubota finance required full insurance. I phoned my homeowners and they faxed a binder for only $130.00 per year. It didn't pass Kubota requirements. Kubota wants the machine fully covered off your property. The only way to get that type of coverage with my homeowners was a seperate Bussiness Policy.

This is discussed often and often I say the same thing, as an insurance agent who did have agency that sold P&C insurance there is most likely more difference between Kubota's insurance and rider on your homeowners than that. Doubt your homeowners covers damage to the tractor but only lose such as theft or fire if burnt while in insured building. But YOU HAVE TO COMPARE LINE BY LINE THE COVERAGE between the two plans.

 

[Lilguy]

If my tractor is at home it is covered for loss being stolen, damaged from fire,flood and other acts of nature, we have earth quake insurance, and accident damage.While being tranported to and from dealer or other no use locations. I have no coverage for anything if I take it to a family or friends location to work with it onsite.
If I finance it I have to get Kubota Insurance plus pay the finance bump which makes the Zero finance mute
from a pure $$$ standpoint. I could use HELC at 2.9%, home paid for, work a better deal and deduct interest
or pay cash and get the best deal.
I have 2 30+ year old Kubotas that have cost me about 1000.00 in repairs to one tractor in all that time. Extended warranties and insurance for 2-3 grand more minimum is something one has to balance with expectations.
Taking the family out today to decide on a TLB package at our local dealer. Will report with decision.

 

[Indian MC]

Why couldn't you buy the Kubota insurance and finance it in your payments? That's what I did. Best insurance ever! I wish Kubota sold homeowner and vehicle policies.haha

I did! It only raised my % Financing to thee quarters of a pont. The Kubota insurance offered a **** of a lot more than a rider on my homeowners did. Much rather invest In Kubota for Financing and Insurance. Do our part in keeping them around. I put a claim in with my homeowners once in fifteen years, and they treated me like it was my fault. Sure, I could have prevented lightning from hitting my House.

 

[MHarryE]

Financing at zero percent vs cash discount. Let's take an example close to my last large tractor purchase and use round numbers. $100,000 for 5 years at zero percent or $99,000 cash. After delivery I had $100,000 cash vs $1,000 is I paid cash. I invested the difference and, over the past 5 years, I have averaged 9% return on my investment. Not great, but conservative portfolio. S my money went up but I did need to make payments. So to simplify the math and work from the midway point, $50,000. $50,000 at 9% annually is $4,500, or over 5 years $22,500. So over 5 years I have earned $22,500 gain on investment vs $90 interest per year or simplified $450 interest on the cash back. I am over $22,500 ahead having financed. Simplified, although I actually came out further ahead than that because although I averaged 9% on investment over 5 years, I actually made 12% and %15% on the money the first 2 years when I was using more of Kubota's money. That's also without figuring in a tax break I received by spreading payments over 5 years instead of taking a lump sum $100,000 out of the bank. If you don't believe me, have an accountant figure it out for you.

 

[ovrszd]

Financing at zero percent vs cash discount. Let's take an example close to my last large tractor purchase and use round numbers. $100,000 for 5 years at zero percent or $99,000 cash. After delivery I had $100,000 cash vs $1,000 is I paid cash. I invested the difference and, over the past 5 years, I have averaged 9% return on my investment. Not great, but conservative portfolio. S my money went up but I did need to make payments. So to simplify the math and work from the midway point, $50,000. $50,000 at 9% annually is $4,500, or over 5 years $22,500. So over 5 years I have earned $22,500 gain on investment vs $90 interest per year or simplified $450 interest on the cash back. I am over $22,500 ahead having financed. Simplified, although I actually came out further ahead than that because although I averaged 9% on investment over 5 years, I actually made 12% and %15% on the money the first 2 years when I was using more of Kubota's money. That's also without figuring in a tax break I received by spreading payments over 5 years instead of taking a lump sum $100,000 out of the bank. If you don't believe me, have an accountant figure it out for you.

I totally agree when the purchase price is that close regardless of payment method. This scenario is becoming more common.

To use a card game (Poker) term, the manufacturers have went "All In" holding a pair of twos. The rest of the table (Us) have folded.....

Using your thoughts on this. Explain to me how it improves their finances to let you invest your money and make that $22K rather than make it themselves?

 

[MHarryE]

I totally agree when the purchase price is that close regardless of payment method. This scenario is becoming more common. To use a card game (Poker) term, the manufacturers have went "All In" holding a pair of twos. The rest of the table (Us) have folded..... Using your thoughts on this. Explain to me how it improves their finances to let you invest your money and make that $22K rather than make it themselves?

They sell a machine they otherwise would not have. With competitors using the same gimmick, they need to be competitive to stay in business. Borrowing money today is cheap, for an individual or a company. Let's say I put my cash in my savings account rather than invest it. I believe my savings pays about 0.1% or less. On that basis I would be better off with the discount.