Info on financing a used tractor

[EddieWalker]

I recently paid off the loan on my wife's mini van and I'm thinking about buying another tractor. I don't really need it right now, so I'm not in any rush, but there are a few out there that kind of interest me. I'm not ready to go and look at them in person, I'm just kind of curious how the financing works. I have a pretty good credit score, and I always get the lowest interest rates offered.

If you have bought used recently and financed, what kind of interest rate did you get? How long where your choices in the loan?

I like to get the longest loan possible so I have the smallest payment possible, and then make two payments a month when I can. I always pay off the loan ahead of time. Being self employed, this has proven to work well for me without adding too much stress to my life. How many months can you get a loan for?

I'm also trying to see where I would be comfortable at with monthly payments. Prices for the tractors that I like are from $35,000 for something that will work, to $55,000 for something that I would really want to have, but really don't need.

Thank you

 

[Username Taken]

Get a HELOC

 

[kenmac]

I recently paid off the loan on my wife's mini van and I'm thinking about buying another tractor. I don't really need it right now, so I'm not in any rush, but there are a few out there that kind of interest me. I'm not ready to go and look at them in person, I'm just kind of curious how the financing works. I have a pretty good credit score, and I always get the lowest interest rates offered.

If you have bought used recently and financed, what kind of interest rate did you get? How long where your choices in the loan?

I like to get the longest loan possible so I have the smallest payment possible, and then make two payments a month when I can. I always pay off the loan ahead of time. Being self employed, this has proven to work well for me without adding too much stress to my life. How many months can you get a loan for?

I'm also trying to see where I would be comfortable at with monthly payments. Prices for the tractors that I like are from $35,000 for something that will work, to $55,000 for something that I would really want to have, but really don't need.

Thank you

When I bought my large tractor. My financial advisor wanted me to finance. So ,I did.
I got a CU loan for 36,000. Cost me 700 per mo not including insurance which the lender required.
I believe the interest rate was close to 4%
I didn't like making payments and insurance. So I paid it off against his advice.

 

[notaz3]

My philosophy is; If it's not going to make me money, I'm not going to pay the bank for it.
If it's a NEED for my business I may get loans. If it's a WANT I pay cash.

 

[rScotty]

All my life I've known that if I wanted something that I couldn't afford, I could simply go out and find an older one cheap enough that I could pay cash for and fix it up.

And more than once done just that. It's kept me out of debt, and been learning and entertaining....but it has also eaten up a lot of my time....valuable time when I could have been just as happy doing nothing at all.

We are lucky to live in a country where anyone can do either of the above.

rScotty

 

[Diggin It]

When I was starting to shop, I looked at a BXsomething with backhoe. Seller wanted $13,500 or so. Credit Union wanted close to 10% since it would be an unsecured personal loan and they weren't even sure they could do it for that amount regardless of my credit history.

There is absolutely no way I'd ever risk house and/or property to finance a machine. Equity lines are just begging for trouble.

I can't imagine an advisor recommending paying interest unless paying in full would take funds out of something making more interest. It was something I looked at, but I would have been taking funds out of an account that had a history of increasing by 10-15% per year vs. paying 3% interest on the loan. I've been paying extra every month and have made a couple of extra payments when I could, so I'm on track to pay it off about two years early.

Length of term was another issue. For used, they would only go something like three years as I recall which would have made the payments higher.

Not everyone wants to take on some else's machine problems in hopes of coming out ahead by buying older and lower priced. Neighbor picked up a JD 2020 that he knew needed work. He hasn't stopped pouring money into it yet.

 

[Cahaba Valley Farm]

Neighbor picked up a JD 2020 that he knew needed work. He hasn't stopped pouring money into it yet.

What's been wrong with it?

 

[Cahaba Valley Farm]

Prices for the tractors that I like are from $35,000 for something that will work, to $55,000 for something that I would really want to have, but really don't need.

My question to you is why would you want to purchase something that expensive and take on that much debt liability if you don't really need it?

 

[Torvy]

Every financial situation is different. Interest rates have been so low for so long that in many cases it is ludicrous not to finance. That money you pay could easily make 10% or more in the market. So, unless your APR is over about 7%, financing can be an advantage. In some states, interest can reduce your tax liability. Truly a situation where YMMV.

For me, I agree that it only applies to things I think I need. I could see for some people 'wants' make you happy and you spent your life earning the money, so the added expense of a loan is worth it.

To the OP question, there are a ton of variables. Find a lender who typically does AG loans. They can take equipment as collateral, usually with a UCC filing. Helocs have their place, but I would not tie up my home equity for anything unrelated to improving the value of my property... buildings and such. Get pre-qualified so you know what you are getting into before you get attached to a tractor or a 'deal'.

 

[hugo454]

home equity loan