Financing Kubota Financing Question

[seapea]

Seapea,

Glad to hear that you are happy with your coverage.

I don't have the coverage yet, since I'm still trying to figure out if it is worth it.

My information is based upon my own purchase experience a few years back, a conversation with the folks at Chubb who underwrite for Kubota, and various discussions here on TBN. Of course I could be wrong. Maybe they changed the policy form?

The underwriter is Ohio Indemnity Company, and the policy form is dated 10/2006

BTW, when I read the word collateral, in the context you wrote it, I understand that to be the collateral value (the amount you owe), not the total value of the collateral. Also, since the rate for the loan is determined by the loan duration any change in rate over that time because of a declining property value is already reflected in the aggregate rate.

Read your policy. Collateral is clearly defined as "any item identified in the credit agreement".

But the point of my post was to encourage buyers to make valid comparisons. There are a lot of products out there that have a lot of "includes" and "excludes". A decision based on cost alone would not necessarily be a wise one.

The skeptic in me views it like this. Kubota insists that the buyer provide security for Kubota. Kubota frankly has no stake in protecting the purchaser. If you cannot prove that you can provide security for Kubota they will make sure you can protect Kubota. I'd prefer to find a policy that I'm sure protects me. If that product also protects Kubota then that's great too. Kubota happens to own the captive that ultimately takes the risk for these policies.

One caveat is that the policy is only tied to the life of the loan. If you pay the loan off early do you lose your coverage?

Yep. When the loan is done your coverage ends and you can't renew, so sooner or later you'll have to look for other coverage if indeed you want some.

My question for Kubota is: If this is such a great product and value then why do you not offer it to cash buyers or owners after their loan has been fulfilled?

Because the real value is to Kubota, and they offer it because many are willing to pay rather to than do the legwork to find something better and cheaper. It's not easy for most to find good insurance coverage. Personally I'm willing to pay for the convenience, but at the momement I'm not all that sure that the coverage is good enough. I'm still waiting for clarification on the exclusion 20 I mentioned earlier.

Again, my suggestion is that you simply make sure you are purchasing a policy that covers you in a way that has meaning and provides value to you. A personal property or non-marine policy from the right carrier, and I don't know who the right carrier is, still sounds like the best long term protection to me.

This is what I'm trying to make sure of. BTW, a quote I got from my agent for an inland marine policy 3 years ago (I never did purchase then) was over $600. I know most have done a lot better than this, more like $150 for a $20,000 tractor.

 

[Foozle]

It is interesting how different insurance companies treat tractors differently. From what I've discovered so far:

1. Allstate won't cover anything over 47 HP. Tractors 47 HP and under can be covered under homeowner's insurance as long as it is used for the maintenance of the property and not used commercially.

2. Farm Bureau will cover tractors, but only if you also have either a homeowner's policy or auto policy with them. They won't cover anything over about 30 HP under the homeowner's, but will do a farm rider separately for larger tractors -- this also covers commercial use.

3. State Farm says they cover any size tractor under the homeowner's policy as long as it is only used for maintenance of the property and not for farm/commercial use. If for farm/commercial, they do a separate farm/ranch rider similar to Farm Bureau.

4. On Kubota, still not sure whether the coverage is only for amount of remaining loan or for the entire cost of what was financed, or for the current replacement value, but I have an inquiry in with Kubota Insurance to check on this.

I'll likely go with State Farm assuming they give me a letter of coverage.

 

[LBrown59]

I don't want to discourage you but Kubota absolutely wouldn't approve me for their Financing. I am just a young farmer that doesn't have a lot of credit history so my father-in-law co-signed for me and they still wouldn't approve me. In the last 5 years my father-in-law bought 2 new John Deeres and used their financing, never had a late payment and just made the last payment 3 months ago and they said he doesn't have enough credit history??? By the way my dealer also sells Case IH and they approved me without any co-signer and no hassle. I must have just caught Kubota in the wrong mood. I hope you don't have any problems and let me know how it turns out. Good- Luck

Kubota has financed 3 BX tractors for me . No problems and all went smoothly.

 

[LBrown59]

JD charges $100 insurance

It's illegal for a financy company to force you to buy insurance from or through them.

 

[LBrown59]

Be careful with the Kubota insurance and make sure you are making an apples-to-apples comparison. Your homeowners or inland marine policy should cover your asset at cash value.
*The Kubota policy covers your equipment at the value of the balance of the loan. That makes a big difference to me! If after two years of your three year loan your original 20k tractor is destroyed and has a used market value of 14k but you only owe 6k then the Kubota policy only pays Kubota the 6k. In essence it is only there to protect Kubota, that's why it costs so much less than a cash value based policy.

*Sounds like credit life one of the 2 biggest insurance rip offs.

 

[donn12]

*Credit Life insurance means that if you die your loan is not passed on to your estate.
Disabilty means that if you are disabled you do not have to repay your loan.

 

[LBrown59]

*Credit Life insurance

The 2Nd biggest insurance rip off out there.

 

[Ductape]

What's the first biggest rip-off ???


My vote goes to "One Hour Martinizing" !

Just what the Heck is martinizing, anyway ??!!!

 

[Elliott Wave]

Be careful with the Kubota insurance and make sure you are making an apples-to-apples comparison. Your homeowners or inland marine policy should cover your asset at cash value. The Kubota policy covers your equipment at the value of the balance of the loan. That makes a big difference to me! If after two years of your three year loan your original 20k tractor is destroyed and has a used market value of 14k but you only owe 6k then the Kubota policy only pays Kubota the 6k. In essence it is only there to protect Kubota, that's why it costs so much less than a cash value based policy.

I called KTAC and asked whether the policy just covers the remaining balance on the loan. I was told that was not true. I asked if I could be sent the policy, though, and the individual was not helpful. Basically he told me you get the policy when you sign up for the insurance. I told him I wanted to see the policy before I sign up. He asked if I was in the insurance business. I said no, I just like to see what I may be signing up for...

The company I have for Auto insurance does not offer insurance for a tractor.

 

[bandit67]

Do you have a separate company for homeowner's insurance? Your tractor, if used only on your property, should be covered by your homeowner's policy. That same company should be able to give you a separate policy if you plan on using it off your property, too.

If you have a company that insures some things and not others, you may want to start shopping around for one company that can cover your house, belongings, vehicles, toys, tools, etc.