Settle my New vs. Used dilemma.

dholly · Mar 3, 2005

Everybody love$ a deal. Is this barely used tractor a good enough bargain to pass up new with 0%/48mo.? What would you do? LINK

rozett · Mar 3, 2005

My personal choice would be to buy the used machine. That's an 18% savings for a machine that is barely past break-in. You'll get the same response from the dealer regardless of which machine you buy. And you'll have several thousand to buy other implements.

I bought my CUT in a similar state. I have had zero problems (that I didn't cause myself /forums/images/graemlins/blush.gif) and it has never seen a dealer since I got it.

dholly · Mar 3, 2005

*sigh* It sure sounds like a decent bargain to me too Bruce, but I'm having a hard time justifying not using the $ to pay down the house mortgage. Paying down the mtg by $14.5k saves $765/yr. of interest. In the long run, I'll save so much more than the $1,900 to $2,600 upfront savings and, since I'll probably take this machine to my grave, I'm leaning towards new at 0%/48mo. Just hate to owe somebody else for four years, even if the numbers say it's the best thing to do. Writing one check is so much easier. Pretty tough to look that NH gift horse in the mouth though. /forums/images/graemlins/wink.gif

Keith_B · Mar 4, 2005

</font><font color="blue" class="small">( *sigh* It sure sounds like a decent bargain to me too Bruce, but I'm having a hard time justifying not using the $ to pay down the house mortgage. Paying down the mtg by $14.5k saves $765/yr. of interest. In the long run, I'll save so much more than the $1,900 to $2,600 upfront savings and, since I'll probably take this machine to my grave, I'm leaning towards new at 0%/48mo. Just hate to owe somebody else for four years, even if the numbers say it's the best thing to do. Writing one check is so much easier. Pretty tough to look that NH gift horse in the mouth though. /forums/images/graemlins/wink.gif )</font>

You are likely not going to regret paying down the mortgage, and buying a new tractor for 0% at 48 months. Not only will you be saving interest on the mortgage, but will accelerate the payoff in doing so. The mortgage paydown is coming straight off the balance, so you could cut substantial time off that baby.

jim_wilson · Mar 4, 2005

I responded to your other post but when I did I didn't think of the option you mentioned of using the money you have to pay down the mortgage and take advantage of the 0% financing on the tractor. If you intend on keeping the tractor for a long time and you intend on taking that money you would put on the used tractor and putting it down on the mortgage I would bet that if you sit down and calculate the overall financial impact it comes out pretty much even in the end - meaning you save as much money paying down the mortgage as you do buying the used tractor.
I have seen a lot of people who figure out their finances by asking themselves how much can they afford right now and/or how much can they stretch now assuming that they will make more money in the future. The fact of the matter is that over the course of your life you are only going to make so much money - most of us aren't going to win the lottery, marry rich, or get jobs that just keep paying more and more. Think of it as when you are born you are given a lump sum of money and that is all you ever get for your life - you would change the way you spend vs. assuming you are just going to keep making more and more.
Take that money you would put on the used tractor, apply it to your mortgage and see how that affects what you end up paying for the house when it is said and done. Then compare that to how much you save by buying the used tractor - factoring in those 110 hours somehow (I guess you would have to figure out the useful life of the tractor in hours and that would translate into a $ figure per hour). I bet paying the house is a better bet - or at the worst it comes out pretty even.

rozett · Mar 4, 2005

I agree!! I didn't catch that in the original post.... but paying down the mortgage is a big financial win. In either deal, you end up with a great tractor. But over time, taking the 0% financing and putting the cash towards the mortgage will pay for the tractor.

Many hours of enjoyment (err.... productive work) with your new NH. /forums/images/graemlins/grin.gif

jfdlaw · Mar 4, 2005

Go new w/ 0%, as long as you are going to use the money to pay down the mortgage or other higher interest debt. You also get the benefit of a warranty and knowing no one else has done anything stupid to your tractor.

anojones · Mar 4, 2005

I agree- pay down the mortgage and take advantage of the 0% - don't think of it as going into more debt- it's the same debt just owed to someone else (but at a lower interest rate). If you lower your mortgage $50 a month thats saves $18,000 over a 30 year loan (the amount you save each month will be a factor of your loan amount and interest rate see the BankRate Calculators ). Subtract the 15K you put in and you still save $3K over the long run- but that doesnt' count the interest you'd be paying on that $15K over the 30 years, and you'll have more money freed up every month with the lower mortgage (after you pay off the tractor). And, you get a new machine, with a new warranty. My thinking may be off here- but it makes sense to me.

dholly · Mar 4, 2005

To all who threw in their .02, thanks for your time and comments. The wise men prevailed - somebody pinch me - I'm getting a new tractor! WooHoo, where do I sign?