Info on financing a used tractor

[Jstpssng]

I took out a 4 year loan through my CU in 2017 with 2.25% interest, and paid it off a year early. If I'd bought new rather than used I would have saved .25%.
I like having my home nearly paid off and have tried the "buy old and fix up" routine on pickups which always ends up being a money pit. I can do minor things but repairs such as head gaskets and clutches I need to hire out; it doesn't take long before I have close to the price of a new vehicle tied up in repairs and still own a piece of junk.
I was saving for a new tractor when my old L275 started going to pieces... every time that I used it something else broke. My choices were to pay somebody to do the work or take out a loan. My plan was to cut enough wood off my property to make the payments but that never happened so while I now have the tractor paid off, I still have the wood to fall back on if I ever need to make some extra money.

 

[EddieWalker]

Thank you for your replies

 

[finn1]

I bought mine new, and financed it through the credit union. Rates varied with the length of the loan. I think the sweet spot was three or four years, although longer terms were available at higher rates. Beyond some term, maybe five or seven years, the rate would revert to whatever the then current rate was.

Used tractors that were two or three years old were possible to finance at the same rate as new, with higher rates for units older than that.

When I bought, rates were low enough that you would have been crazy to not finance the tractor, at least up to the point that the payments might affect your cash flow and lifestyle.

I kept the bulk of the money the tractor cost in the stock market, did a nominal down payment , something like $7000, and financed the rest. Frankly, I made out like a bandit, as the money left in the market had roughly 25% annual returns over the period of the 2.7% loan.

 

[arrow]

I am always in amazement when a question is asked and people feel compelled to relate their own personal quirks and beliefs to whatever question was asked.
Eddie asked about tractor loans. Not what he should/shouldn't do, or what you believe or even question why he needs/wants a tractor.

Cheez

If you had a tractor loan or used a personal loan or used a home equity line of credit to finance a tractor, it's appropriate to spell out your experience.
That's all you need to do.

I financed my tractor through Mahindra. Rates were competitive at the time of approximately 4%. This isn't like buying a house where you are financing hundreds of thousands so the percentage effects on loans in the 35-50 K range, are not as great. I did so because I liked the convenience and pricing of loans were not that differentiated.

Here is a company Eddie that may answer some questions for you LoansforTractors

 

[arrow]

I bought mine new, and financed it through the credit union. Rates varied with the length of the loan. I think the sweet spot was three or four years, although longer terms were available at higher rates. Beyond some term, maybe five or seven years, the rate would revert to whatever the then current rate was.

Used tractors that were two or three years old were possible to finance at the same rate as new, with higher rates for units older than that.

When I bought, rates were low enough that you would have been crazy to not finance the tractor, at least up to the point that the payments might affect your cash flow and lifestyle.

I kept the bulk of the money the tractor cost in the stock market, did a nominal down payment , something like $7000, and financed the rest. Frankly, I made out like a bandit, as the money left in the market had roughly 25% annual returns over the period of the 2.7% loan.

Like jstpssng's contribution, this is an example of a real answer to Eddies question.
Pure and simple explanation w/o questions, judgment or personal opinion on motive.

 

[Diggin It]

If you qualify, AgDirect is around 2.5 to 4% based on new/used, place of purchase, term length (up to 7 years) and amount financed.

AgDirect - Equipment Financing

AgDirect® is powered by Farm Credit – committed to serving agriculture and built from the ground up to finance ag equipment.

www.agdirect.com

 

[rScotty]

I am always in amazement when a question is asked and people feel compelled to relate their own personal quirks and beliefs to whatever question was asked.
Eddie asked about tractor loans. Not what he should/shouldn't do, or what you believe or even question why he needs/wants a tractor.

Cheez

SNIP....

Well, arrow... it's called "conversation". Nearly a lost art, but still important to many rural folks.

Now if Eddie feels that we have drifted so far that he is about to lose sight of both his original question as well as any possible answers - and that surely does happen - then it would be up to Eddie to bring the conversation back around to his original goal. That happens, too.

And I think all of us would encourage him to jump right in and do that the moment he feels the need. No harm there. Otherwise we'll just happily babble along.
rScotty

 

[arrow]

Well, arrow... it's called "conversation". Nearly a lost art, but still important to many rural folks.

Now if Eddie feels that we have drifted so far that he is about to lose sight of both his original question as well as any possible answers - and that surely does happen - then it would be up to Eddie to bring the conversation back around to his original goal. That happens, too.

And I think all of us would encourage him to jump right in and do that the moment he feels the need. No harm there. Otherwise we'll just happily babble along.
rScotty

Well then, regard me as part of the "conversation" and I would agree with you had the op asked about a "decision" to buy a tractor or not and was kind of "stuck".
I hope your contribution would be applicable to those who peruse Eddie can't think for himself about what he does with his life.
He came here for "loan advice" and not "life lessons".

 

[sandman2234]

I borrowed from the credit union and used a savings account as collateral. 2% and they still paid interest on the savings account. That was several years ago when rates were higher. Tractor got paid off and payments went to pay house off early. Debt free is great!
David from jax

 

[rScotty]

Well then, regard me as part of the "conversation" and I would agree with you had the op asked about a "decision" to buy a tractor or not and was kind of "stuck".
I hope your contribution would be applicable to those who peruse Eddie can't think for himself about what he does with his life.
He came here for "loan advice" and not "life lessons".

Gotta agree that Eddie W. never seemed to me to be needing "life lessons". But those unasked for lessons do seem to come along with TBN conversations.

On the financing question, it's not something I know much about - I'm from the old "fix it or do without generation" - but it is with conversations like this that I'm learning more.
rScotty