New Tractor Purchases

[LastSTRAW]

My decision to pay cash for my Kioti saved me $4,000. That's almost $8,000 before tax so it would have to be a very high interest rate to make even 0% worthwhile. Right now with interest rates at historic lows, 0% is not the deal it once was. You also save sales tax on the discount which in my case would have been another $600.

You may find that paying cash is worth the discount even if you have to borrow a portion of the money privately.

 

[CJBOTA]

I'm not sure why I do it this way, but I pay about half and finance half. However, I always have the money to pay off my debt if I need to. The real stupid thing I have done is underestimate my needs. This has resulted in three different tractors in 5 years. My dealer has treated me fair, but I know this has cost me money. My interest in farming started as a hobby but has turned into way more. I have gone from a Kubota B, to an L, and last fall to a MX5100. I would bet money that I will get atleast a M7040 within two years. I added an airblast sprayer for my orchard last fall and it takes everything the MX5100 has to run it. I plan to retire from my regular job in about a year and go full time on the farm. We have plenty of land and I just love planting peach trees. I guess I found my calling late in life. My new plan is not to leave my kids a bunch of money, I am going to leave them a job. ( a big dang orchard and probably a big dang tractor) But I'll make sure to leave them enough money to pay off the tractor and cover their first year's operating expenses. After that they are on their own.
CJ

 

[MasseyWV]

I'm not sure why I do it this way, but I pay about half and finance half. However, I always have the money to pay off my debt if I need to.

In the past, I've financed several vehicles this way but always got tired of the payments and paid them off early. They say it hurts your credit when you pay things off early but I will be debt free when I finally pay my house off in less than a year and plan to stay that way afterwards.

Saving money to buy things isn't always easy but I use a method that has worked very well for me. I create a separate savings account and use it solely for the purpose of saving for "whatever" and divert $$$ amount of money out of each paycheck into that account. In effect, I am paying myself a monthly payment, rather than the finance company.

 

[RollingsFarms]

But...

In the fine print there is usually a clause that says something to the effect of "miss a payment and 0% is out the window" which is exactly what the finance company is hoping for.

I've paid on time the past 3 years and 8 months, so I'm well trained to know when to expect the bill. It usually arrives the second Wednesday of every month and Deere is good about sending you your payment about 3 weeks ahead of time anyways. the remaining 4 payments should be no sweat. I have no problem financing certain things, you just have to be responsible enough to keep good records of what is due and when. keep track of when your payment notice arrives for things, know what you have to set aside and there isn't a problem.

 

[wcampbell47]

Probaly not the way it should of been done but I borrowed from my 401k then payed myself back with interest,so it didnt lose anything not being in there. Guess I could save and pay cash but if my wife knew I had that kinda cash,she may need something and i would have to start all over again:laughing:.

I borrowed several times from my 401k paying myself back with interest which turned out to be more $$ for the amount I borrowed than what the invested money returned. At least during the economy in which I borrowed.

 

[crazyangel]

They say it hurts your credit when you pay things off early but I will be debt free when I finally pay my house off in less than a year and plan to stay that way afterwards.

IMHO the thought that paying off debt before the full term hurts a credit rating is perpetuated by the men that want to collect the interest. It is scare tactics to me, and I give it no credence. I am debt free and have an excellent credit rating. In fact, I was considering a short term loan for an investment property recently, and the officer at my bank laughed out loud when I asked about my credit worthiness. She said, "Really? Are you Serious? You have no debt and steady income. We'll give you just about anything you ask for!" I agree that debt in general is to be avoided. Yet, in my circumstances I am also willing to consider short term borrowing if the opportunity outweighs the interest. Just like the cost of interest, I must also consider the cost of a missed opportunity when making my financial decisions. This works for me, but I am not advocating it universally. I respect that everyone has to determine their own personal threshold of financial liability.

 

[MasseyWV]

IMHO the thought that paying off debt before the full term hurts a credit rating is perpetuated by the men that want to collect the interest. It is scare tactics to me, and I give it no credence. I am debt free and have an excellent credit rating. In fact, I was considering a short term loan for an investment property recently, and the officer at my bank laughed out loud when I asked about my credit worthiness. She said, "Really? Are you Serious? You have no debt and steady income. We'll give you just about anything you ask for!" I agree that debt in general is to be avoided. Yet, in my circumstances I am also willing to consider short term borrowing if the opportunity outweighs the interest. Just like the cost of interest, I must also consider the cost of a missed opportunity when making my financial decisions. This works for me, but I am not advocating it universally. I respect that everyone has to determine their own personal threshold of financial liability.

Everyones situation and personal preferences will vary.

Having credit at your fingertips can, and often does, create the possibility of making bad purchase decisions. On the other hand, when one has to save their hard earned money, they are much more likely to give very careful consideration to anything they may purchase with it.

 

[tcartwri]

We paid cash for ours, and I will add that the reason we bought a new machine was because the used machines were priced higher than a brand new one at the time. Plus they all had at least 1000 hours on them.

 

[MasseyWV]

We paid cash for ours, and I will add that the reason we bought a new machine was because the used machines were priced higher than a brand new one at the time. Plus they all had at least 1000 hours on them.

I've been encountering a similar situation myself. Most of the newer used tractors are priced so high that it almost makes more sense to buy a new one. It's a crazy world that we live in.

 

[AKfish]

I couldn't afford to buy a tractor.. any tractor; for many years early in my marriage, kids, college, etc. etc.

I rented 'em! Did what I had to get done and finished the rest with a shovel, rake, ATV and truck.

Bought my first TLB used. Paid cash. Refurbished it and sold it for more than I paid. Kept most of the attachments - tiller, rake, post hole digger, rear blade.

Used the money to pay 1/2 down on my next (new) tractor. Financed it with auto pay thru the bank. Worked just fine. No boogy man at the bank or hacker at the manufacturer crept up behind me and caused me to miss a payment!!!

Paid cash for all my implements, though. They're all used. Baler, disc mower (2), rake, tedder, etc. etc.

Financing a new tractor now. Last one paid off early.

AKfish