Is there any incentive to pay off your tractor early?

[BigCountry1689]

My H.O.I will only pay for market value at time of loss and only directly related to primary cause. i.e. hurricane, wind blows shop over, shop catches on fire, theft, etc.... But if I sink it in the pond while mowing its my baby at that point. My tractor insurance will cover any loss related to use in agriculture or personal use up to 110% of replacement value on my property or trailered up to 25 miles from the house ( Covers fueling it). I added my trailer to my auto insurance so if it is a loss than USAA pay for it.

 

[George2615]

Aren't your tractors covered under your home owners insurance? If so, aren't you paying double insurance?

Same as Richard said. My HO ins. does cover things in my garage, small mowers, tools, some equipment etc. but not my tractor because I take it off property.

 

[MossRoad]

Keep your money in the bank earning you interest. The loan isn't costing you anything extra to take it to full term so no reason to pay it off early.

What bank is paying interest? :laughing:

 

[David97]

My main concern is that i will need a new vehicle soon, i only hope my current vehicle will last until the tractor is paid off. 4 more years to go!

I can't afford to pay for both at the same time.

 

[MossRoad]

Let's say you owe $5K on it now, with 0% financing.

You dump $5K on it now, you'll be out $5k.
You dump $5K in payments over the next 4 years and you'll still be out $5K.

And if you have the $5K to dump on it now, that means you already have the money to pay it off now. So saving for a new vehicle now would make no difference in total payments on both the tractor and new vehicle.

So look at it this way.... if you have the money to pay for it now, and you aren't investing that money in anything that makes interest (as in sitting in the bank making 1% - which is losing about 1.5% in actual value due to the 2.5% rate of inflation), and you have no intent on investing it, you might as well pay it off now, because you are losing money by letting it sit in the bank, or worse yet, in your gun safe in the basement.

 

[ovrszd]

Let's say you owe $5K on it now, with 0% financing.

You dump $5K on it now, you'll be out $5k.
You dump $5K in payments over the next 4 years and you'll still be out $5K.

And if you have the $5K to dump on it now, that means you already have the money to pay it off now. So saving for a new vehicle now would make no difference in total payments on both the tractor and new vehicle.

So look at it this way.... if you have the money to pay for it now, and you aren't investing that money in anything that makes interest (as in sitting in the bank making 1% - which is losing about 1.5% in actual value due to the 2.5% rate of inflation), and you have no intent on investing it, you might as well pay it off now, because you are losing money by letting it sit in the bank, or worse yet, in your gun safe in the basement.

Very well explained. Hard for "me" to comprehend. Easier for "me" to just make the payments and spend my excess money on something else....

 

[CADplans]

My main concern is that i will need a new vehicle soon, i only hope my current vehicle will last until the tractor is paid off. 4 more years to go!

I can't afford to pay for both at the same time.

Very well explained. Hard for "me" to comprehend. Easier for "me" to just make the payments and spend my excess money on something else....

Keep the loan, do not pay it off early,,
the monthly payments deters you from buying something else.

Drive your car until they no longer offer parts for it.

I hate anything new,,, :thumbsup:

The only reason we got a new car recently was because of health reasons with my wife.
She wanted to keep the old car, even though she suffered everytime getting out of it.
I "splurged" and got the higher vehicle she needed.

 

[moriboy]

As others have stated, paying it off early won't save you any money. But in my case, my wife will let me have one equipment payment at a time.
So, I pay off early so I can get something else! Currently have about 1.5 years left on my excavator, once that's done I'll be looking at a cabbed 85HP tractor.

 

[Tractor Seabee]

KTAC Insurance; it would be foolish to drop it even after payoff. Compare their coverage line item by line item. Nobody gives the casualty coverage they do that I could find for the price. I kept mine. KTAC recently paid an $8k repair from damage encountered working in the woods. All I paid was the $250 deductible. I would have been hard up to pay that bill. Sometimes insurance is a good investment. Of course if your tractor is a garage queen it would not be a good investment. I use mine (1500 HRs in 6 Yrs) so S***t happens claims old man "Murphy". Payoff? That is a personal finance decision I will let you flounder with, others have given you the Pros and Cons there.

Ron

 

[Thomas]

Good dealer would take under consideration which might help to slide another loan throw...he/she pay off early no outstanding loan.