Is John Deere offering 0% for 60 months?

[JDOneDay]

You do realize that this is all academic since we have no idea what John Deere does, if anything, in the way of offering incentives to their dealerships. Actually I heard some time ago that they offer the same financing options to all dealers and it is up to each dealer if they wanted to offer more. I think that was also mentioned in this thread.

As far as Walmart goes, we will leave that for another time as I don't really want to get into the discussion of the economics of it.

 

[damiang]

Went to my local dealer 2-18-11, he showed me on his JD web page (from JD it self, the stuff we don't see) it shows they can do a 60 month loan at 1.9% that does not cost any fee to the dealer.

 

[BleedGreen]

All dealers have access to the same financing programs. In most cases there will be a base program, such as 0% for 36 months which is completely supported by Deere. 0% for 48 and above would cost the dealer a few (or more) percentage points (what we call "dealer participation") of the total amount financed. Again, ALL dealers have access to these programs and it is up to them to determine which (or all) will be promoted. Depending on regional market conditions a specific region may have better rates and/or a lower dealer participation rate. This is usually done in areas that have just been through a drought or something similar that has caused sales to decline.

All this talk about unfair practices and not taking care of the little dealers is just rubbish - everyone has access to all the same programs, at all times - again, except for the occasional regional program.

 

[AKfish]

All this talk about unfair practices and not taking care of the little dealers is just rubbish - everyone has access to all the same programs, at all times - again, except for the occasional regional program.

My comments regarding Deere's financing arrangements with their dealerships is based upon 3 references/observations.

1&2 - References by ctlguy and another salesman from a dealership in the Midwest that Deere has made it very difficult for small, single site dealers to compete.

The salesman in the Midwest went so far to say that they had sought legal counsel to provide guidance whether or not Deere was by intent or design violating their rights. This gentleman also indicated that; IHO - Deere's behavior would benefit Kubota, etc. as they do not "treat" their dealers so poorly.

3rd - look around - at the consolidation... it's like a feeding frenzy! The multiple site dealers are getting bigger and the single dealership (or even double site dealers) are becoming an "endangered species".

AKfish

 

[sparrowhawk]

My comments regarding Deere's financing arrangements with their dealerships is based upon 3 references/observations.

1&2 - References by ctlguy and another salesman from a dealership in the Midwest that Deere has made it very difficult for small, single site dealers to compete.

The salesman in the Midwest went so far to say that they had sought legal counsel to provide guidance whether or not Deere was by intent or design violating their rights. This gentleman also indicated that; IHO - Deere's behavior would benefit Kubota, etc. as they do not "treat" their dealers so poorly.

3rd - look around - at the consolidation... it's like a feeding frenzy! The multiple site dealers are getting bigger and the single dealership (or even double site dealers) are becoming an "endangered species".

AKfish

Call me a fool but I don't see the issue with consolidation in any industry. In most cases, efficiencies of scale can be reached once dealerships reach a certain size, which would allow them to pass on some of the savings to consumers. Also, sell-side and buy-side become much more efficient from a cost perspective. As long as there is still choice in a market, then consolidation is a good thing for the consumer.

I work in a business where we have 20,000 partners and trust me, we have small medium and large. a large part of our channel costs reside around the smallest 25% of our channel and do occasional sales. This is the same for JD.

In the end, if you are a smaller business, it is typically your choice to buy volume necessary to get deeper discounts, as well as offer supplementary financing. Profit size is a function of business efficiency, not hand outs to keep it even.....

 

[AKfish]

Profit size is a function of business efficiency, not hand outs to keep it even.....

Really... and can you explain the shipping policy that the major automakers have for dealers across the country in small "market share" regions? (Most likely tractor manufacturers use this "subsidy" as well for the far-flung dealer locations - i.e. Alaska.)

Or Major League baseball franchises (NFL, too) that distribute TV revenue, etc. to clubs that reside in smaller "market share" locations?

As I mentioned earlier, JD's current dealership environment is likely to benefit other tractor manufacturers.

AKfish

 

[sparrowhawk]

Really... and can you explain the shipping policy that the major automakers have for dealers across the country in small "market share" regions? (Most likely tractor manufacturers use this "subsidy" as well for the far-flung dealer locations - i.e. Alaska.)

Or Major League baseball franchises (NFL, too) that distribute TV revenue, etc. to clubs that reside in smaller "market share" locations?

As I mentioned earlier, JD's current dealership environment is likely to benefit other tractor manufacturers.

AKfish

We could debate this all day long (which I won't because I'd rather talk tractors or hunting).

To the points you bring up, since I don't know NFL/MLB or major automaker's thinking, I can only guess but my thought is, sometimes you need to subsidize loss leaders to promote your brand in parity across all sized geos. That says nothing about having multiple dealerships in a region, but having coverage for each given sales area. Your examples really have nothing to do with the consolidation you spoke of earlier and how this was bad.

In the end, as I said and believe, consolidation of a respective geo, provided competition remains, can be healthy and keep dealerships more profitable while allowing them to pass on savings to the consumer based on operating efficiencies. Profitable dealers can offer incentive. Casual dealers are most likely not able to do this...

 

[Seatec]

At my dealer in Nova Scotia, 0% for 48 months, 60 months would cost me about $500 more and 72 months would be more again. Get $1000. Back with 2 pieces.
Wayne

 

[HammA5690]

I just got 72 months 0% on my 2520. I'm pretty sure the dealer is taking a hit on it though, at least a couple percent.

 

[RaisedonDeere]

I just got 72 months 0% on my 2520. I'm pretty sure the dealer is taking a hit on it though, at least a couple percent.

If you don't mind me asking did you pay more than $14,000 for just the tractor? If you bought 2 implements theres another $1,000 cash off from JD. So $13,000 plus 2 implements and 0% for 72 mos is a steal if that was your deal.:thumbsup: