Prices with and without 0% loan?

[jeff9366]

Kubota has ~~50%~~ market share in subcompact and compact tractors in USA. Deere has ~~20%~~. All other brands scrap for residual 30% market share in compact tractors.

Many tractor brands discussed here have avid supporters with less than 2% market share.

Korean tractors seem to be growing in market share off a small base.




Tractors; tough business:

https://www.tractorbynet.com/forums...defunct-tractor-manufacturers.html?highlight=

 

[check]

I've bought a few (Over 20+) new Kubotas over the last 15 years from Steve Barlow. This has given me a lot of time in his office doing our deals and him handling other work requirements and some times just talking. I'm a very inquisitive fellow. I like to know all I can about lots of different things and best cash and best financed price is one of those subjects I have an interest in. Some times there is a instant "company rebate" for cash and some times over the years there has been no difference in price cash or financed. There are often times those buy two additional implements for cheap to near nothing on certain models. I feel fairly certain that it makes no/zero difference to the dealer whether a customer pays cash or finances a new Kubota tractor and there is no dealer participation in the finance side like is often times a part of new car/truck transactions. I did buying/lurking around at car/truck dealerships before buying Kubotas. I'm talking about new Kubotas not used Kubotas which are almost if not always owned by the dealer and not Kubota. There is special Kubota financing on used Kubota tractors bought thru a Kubota dealer but not 0% for sure.
I see lots of financing opinions/ideas and theories and often times theories disguised as facts here but the new Kubotas are almost always owned by Kubota and all dealers pay the same price for them and the dealer gets to make their own deal as to sell price and each dealer can utilize the Kubota financing program equally for whatever financing program is being offered at the time.
I bought a Kubota once or twice where Kubota released new "incentives" after I left the dealership and my price lowered from the original agreed to price to the new lower price when the paper work was completed a couple of days later. The dealer (Barlows) did not have to tell me, he could have manipulated the sale price and got the incentive and I would have never known the difference since I was getting it for the same agreed to bottom line. That's why I buy from Steve Barlow, I trust him.
Bottom line, there is sometimes an actual true 0% at Kubota that's totally determined by Kubota and sometimes it isn't if there is a "cash" rebates which come and go.Now there is also the dealer buy down (often used in car/truck dealing) which means a dealer can pre pay part of the interest out of his profit but most tractor dealers stay away from that but not always.

Thomas, it looks like you have experienced what has been happening a lot these days. And that is, everything is always changing. If it is not the logos or the way a website presents itself, then it is various financing deals.

What I have found here in Ontario is that the Kubota dealers are always willing to give me a different price for 0% financing versus all cash deals. Just for curiosity, I may try again in the new year, to see what has changed. Will report back.

It’s like playing “Let’s Make a Deal“. A show which, by the way, always drove me crazy, because I hate guessing about what is going to happen.

 

[Jchonline]

I have a fairly recent transaction, so I can share my thoughts.

Tractors in my class were discounted $900 if you paid cash over financing 0% for 60m. I also am required to carry insurance if the tractor is financed. I would have carried insurance anyway, so I will leave that out.

It amounts to a $900 finance charge over 60m. Simple math would make it about 1.3% of the total purchase price, or if structured as a typical auto/tractor loan 0.5% over 60m. If we looked at say a 0.99% over 60 months, that would be $1700 in interest payments. 0.99 over 84 = $2400 in interest.

Kubota gives you almost no incentive to pay cash. I think they like financing because most go with KTAC and they make great revenue from this addition.

Massey Ferguson on the other hand offered like $4000 off a 50k tractor for cash, and their financing was bad at the time. So MF I would have done cash.

So the answer is it depends on the manufacturer. Just dont forget most interest in a loan is APR, so you aren’t paying 1% of the total price....it is more than that.

 

[jeff9366]

I think they like financing because most go with KTAC and they make great revenue from this addition.

KTAC is an insurance line of Ohio Indemnity Company. While KTAC revenue goes through Kubota for the convenience of the customer, I do not believe Kubota has any ownership of Ohio Indemnity Company. This is not to say Kubota does not receive a fee for servicing and endorsing OIC's product.

I just sent $429 for my 2019 KTAC insurance on my paid off Kubota tractor. I have owned two new Kubotas. I had one claim against KTAC on each tractor, which approximately equalled the aggregate premiums paid during my ownership. KTAC was very business like and easy to deal with. I would rather have had "0" claims but as I did have significant repairs after tractor incidents with trees, I was very happy KTAC paid expeditiously, less $250 deductible in each case.

Each tractor owners experience will be an individual event. I put 300 engine hours on my tractor per year. The average for residential users is 80 engine hours per year.



RE: Financing. The yield on a 10 year USA government note was 2.783% on Friday.

The yield on a 10 year Japanese government note was 0.040% on Friday. (1/25th of 1%)

Kubota is a Japan based employer. Kubota can borrow money very cheaply in Japan to finance "0" interest tractor purchases in the USA.

 

[RoyKing]

Yes I can verify that $900 cash was on the grand L and not there on the m7060. Which gave no incentive to pay cash

 

[RoyKing]

I don't think that Kubota works like car dealers in that each month a car sits on a lot eats the dealers money, also have never heard what kind of margins are on the tractors or the dealer installed options, or end of year incentives to move last years models. Anybody ever work at dealer that inform us?

 

[RickB]

I don't think that Kubota works like car dealers in that each month a car sits on a lot eats the dealers money, also have never heard what kind of margins are on the tractors or the dealer installed options, or end of year incentives to move last years models. Anybody ever work at dealer that inform us?

I have a couple decades of dealership experience that is still accumulating. I’m not inclined to share the nuts and bolts of the dealer manufacturer relationship beyond saying that what you think isn’t completely accurate.

 

[RoyKing]

Don't be a tease!

 

[crazyal]

I think you can run around in circles if you try to figure out which is a better deal. For me it comes down to do I want a payment. My homeowners will cover my tractor (not as well as KTAC) just for accidents but it has to be on my property or in transportation to/ from the dealership for service. Anything else wouldn't be so I don't think it would qualify for getting a loan. But it doesn't cost me any extra and I get $50k in coverage. I could have tried to guess at how much the money would of earned if invested and making payments. But the end decision was simply that with it paid for I don't have to worry if something changes in my life. For example money invested a few months ago would most likely have lost money. If my company offers an early retirement I could take it. Each payment is something I would have to figure into the decision. Then, of course, there's the risk of an unexpected medical issue. I'm not sure how you can put a value on a feeling.

 

[RoyKing]

I don't get or see the logic. You shouldn't have $50k just sitting around it should be invested, even if it just T bills. So its how cheap can I get money, what I found is auto loans the cheapest money I can get so I put the lean my new mustang, then pay off as dividends come in. So what I view is total layout. If cash discount exceeds the cost of interest. So with the zero interest don't payoff early, and my 50k is making 7% with a dividend stock. after reading about KTAC I put it on the machine like an extended car warranty.