Financing Financing

[Einthewoods]

Hey, I sure didn't mean to offend anyone. I'm just a normal person like I assume most of you on here are. I have a family a house and vehicles. I spent most of my life with debt. About 7 years ago I stumbled onto Dave Ramsey. we took his FPU class and it has changed our life. I don't sell anything for Dave, but I have coordinated several FPU classes and I see how it can change lives. Enough said. This will be my last post to this thread, and again if I offended anyone I am sorry.

I'm not offended by what you said, but it also isn't wise advice in 0% financing situations for many people.

Even if I have the cash to by 100 tractors, if someone is going to let me use their money to finance the tractor at no cost to me, it is a smart move. For many it is a way to keep good credit ratings high as those without any open accounts can actually suffer in credit scores. For those with marginal/average credit, it can help build it.

All the while allowing you to use your money for investing and earning money rather than just paying cash for something that will hold it's value at best and depreciate in many cases.

I agree with the sentiment of your comment that too many Americans are in over their head in debt. Often living paycheck to paycheck and a tractor payment can only add stress to that situation.

 

[Jstpssng]

^^^^^
It really isn't interest free though, once you add in the cash incentives.

I financed through my Credit Union last year for 2.25% - which is less then 1/2 the rate of my small mortgage. While I ended up buying a slightly used Kubota, I had a decent down payment and still would have come out better going with a 4 year loan through the CU on a new tractor and taking Kubota's cash incentive at the time.
I hated like heck to borrow the money, but need something that I can depend on to run when I want it to.

 

[Einthewoods]

^^^^^
It really isn't interest free though, once you add in the cash incentives.

I financed through my Credit Union last year for 2.25% - which is less then 1/2 the rate of my small mortgage. While I ended up buying a slightly used Kubota, I had a decent down payment and still would have come out better going with a 4 year loan through the CU on a new tractor and taking Kubota's cash incentive at the time.
I hated like heck to borrow the money, but need something that I can depend on to run when I want it to.

Not sure what you mean about the cash incentives and not interest free? Maybe I misread something.

I didn't have a choice of one or the other. There were deals I got on x dollars off implements and a hefty amount of the tractor itself, the the financing talk came after the deal.

So, I didn't have to give anything up in order to take advantage of the 0%.

 

[Jstpssng]

If they are offering $800 or 0% financing, it really isn't free. That's the way it was last year when I was tractor shopping. With my 20% down payment and the cash incentive I still could go through the CU with a 4 year loan for the same amount of money.

i.e.
Initial cost, out the door. $23000
Down payment 4300
Cash incentive 800

Total financed @2.25% 17900$/4 yrs = 390.22
OR

Initial cost, out the door. $23000
Down payment 4300
Cash incentive 0
Total financed 0% 18700$/4 yrs = 389.58

Those were my actual numbers for a Kubota L3901 geared tractor last year. It came out the same either way for me.
With more down payment, or by paying it off early, I would have saved money by not taking the 0%.
It was still more than I wanted to finance though, so instead I bought my slightly used 3301 and it will be paid off in Oct. 2020. :thumbsup:

 

[Einthewoods]

If they are offering $800 or 0% financing, it really isn't free. That's the way it was last year when I was tractor shopping. With my 20% down payment and the cash incentive I still could go through the CU with a 4 year loan for the same amount of money.

i.e.
Initial cost, out the door. $23000
Down payment 4300
Cash incentive 800

Total financed 17900$/4 yrs = 390.22
OR

Initial cost, out the door. $23000
Down payment 4300
Cash incentive 0
Total financed 18700$/4 yrs = 389.58

Those were my actual numbers for a Kubota L3901 geared tractor last year. It came out the same either way for me.
With more down payment, or by paying it off early though, I would have saved money.
It was still more money than I wanted to finance though, so instead I bought my slightly used 3301 and it will be paid off in Oct. 2020. :thumbsup:

OK, gotcha. Not the way it worked for me.

I worked through the deal on the tractor and was happy with that. Kubota had some deal with getting $500 or something off your first attachment, so I did that as well as doing with 0% financing. Heck of a deal overall.

 

[Diggin It]

Massey's doing that now:


0% for up to 84 months.*
Plus $400 instant rebate on Woods Massey Ferguson Program Red Implements.

 

[strantor]

When I bought my LS a couple months ago, the salesman spent several minutes poking around on his calculator (without announcing what he was doing beforehand, otherwise I could have saved him some time) and gave me a monthly payment. I hadn't yet provided him enough info to run my credit, so I asked him how he arrived at that conclusion. He showed me a breakdown of the numbers and he had me down for a 0% down 7yr loan with something stupid like 15% interest. I asked him where he got 15% interest from, without running my credit; he gave some convoluted answer about it not being a credit-based financing situation but more of a "lottery" or something where they had carte blanche to finance whoever walked through the door, up to X_number people per month or something (sorry it sounded like flagrant B.S. so I didn't commit to memory exactly how he said it). And since he never sells X_number of tractors in a month, he doesn't waste people's time running credit checks. I think since I'm young, and I look even younger than I am, he just assumed I had bad credit and ran the numbers for a high risk pool.

I told him to sit on that for a minute while I go make a phone call. Went outside and called my credit union and told them what I was trying to do. Approval took a while because I don't have paycheck stubs as a small business owner, so they had to analyze my business accounts and personal accounts and do the math on what my monthly income is. About an hour later they got me approved and I walked back in and told the salesman I had secured financing.

He wanted to know my payments. They were about $30/mo more than he quoted and he asked me why I chose that when the payments are higher. Because I'll pay it off 3 years sooner, dummy! And there's nothing on this planet that I would finance for 15%!

Credit unions are awesome for stuff like this. Especially small town operations. You can actually talk to and reason with a human being, who has all the decision-making ability and brain power that humans are born with. Bigger banks, you might as well be talking to a robot (and sometimes you actually ARE talking to a robot). They have a rule book and if your situation falls outside the cookie cutter template that they assign to all their customers, you just can't be helped. The branch manager's hands are tied; there's nothing he can do about it "I'm sorry sir, we have policies and I'm not at liberty to manipulate them".

 

[rngrrymd]

Massey's doing that now:


0% for up to 84 months.*
Plus $400 instant rebate on Woods Massey Ferguson Program Red Implements.

My experience with Massey was either you got the cash price which was good or they cracked your heiney extra for financing. I was looking at 1742/1749 cab models so it was $4k-$5k difference which was huge. The Massey salesman I dealt with was a dumb blankety blank too because he was trying to quote me prices at over 5% interest. Since Massey advertises 0% for 84 months on their website he must have been hoping to scam me for some extra commission or something. For the record, I only went to the one dealer for Massey so your experience could be much different.

 

[KennyG]

I think we've gone around on this one a few times before. There are two kinds of low interest financing, manufacturer provided and dealer participation. If the dealer is involved you should be able to get a discount for cash. If not, grab the low financing deal. When I bought my John Deere, the dealer explained it all. At that time JD provided 0% financing for up to three years so the tractor was the same price, cash or financed. Over three years required dealer participation so the price would go up.

The same kind of thing happens on cars but I think laws require them to disclose if the dealer is participating in the promotion so you know you can get a better cash price.

If it's a true factory provided 0% deal you would have to be nuts not to take it.

 

[Navvet]

************* TANSTAAFL **********

!!!! There Ain't No Such Thing As A Free Lunch !!!!


And there is not 0% financing. You will pay for it one way or another.

Or stated another way, If they are offering 0% financing, there is a discount to be had somewhere.