To finance or not to finance ...

[Rock Crawler]

0% is simply a tactic to appear as borrowed money cost you nothing. An absolute fairytale. Proof? The price of the tractor will be more financing at "0" or if it stays the same, they are insuring that they are paying the financial companies with the residual with a high enough mark up. In other words you are not getting 15-18% off a tractor plus 0% unless the list for the tractor has been elevated as they do at some car dealerships.

Regarding Kubota.... you are 100% incorrect. The 0° price and the cash price are the same price. This is part of why I went to Kubota. Kioti, MF, Mahindra and everyone I considered had a cash price and a financed price. That is crap. Kubota had multiple rebates offered in Jan 2018 that were valued at around $2000 from the MSRP, the dealer also pulled off another nearly $1500 so I was just about 10° under MSRP. Cash, financed at 0° or financed at a credit union had ZERO effect on the deal or what amount I would pay. So I picked 0% financing with 70% cash down on the deal to put the monthly payment where my wife demanded that it needed to be.

The point is that Kubota does not (at least at the start of 2018) play that stupid game where you have a cash price and you have a financed price.

 

[prichard]

Regarding Kubota.... you are 100% incorrect. The 0° price and the cash price are the same price. This is part of why I went to Kubota. Kioti, MF, Mahindra and everyone I considered had a cash price and a financed price. That is crap. Kubota had multiple rebates offered in Jan 2018 that were valued at around $2000 from the MSRP, the dealer also pulled off another nearly $1500 so I was just about 10° under MSRP. Cash, financed at 0° or financed at a credit union had ZERO effect on the deal or what amount I would pay. So I picked 0% financing with 70% cash down on the deal to put the monthly payment where my wife demanded that it needed to be.

The point is that Kubota does not (at least at the start of 2018) play that stupid game where you have a cash price and you have a financed price.

My experience was the same 3 or 4 years ago. No premium price to get the 0% financing through Kubota.

I also put a large amount down to reduce payments and not have an upside down loan. I do the same on cars.

 

[Diggin It]

Skimming so some of this may be rehash....

Several of the colors I looked at had 0% offers, but you lost all incentives and rebates in most cases. The one question that was asked several times was whether or not I planned on paying the loan down early. When I said yes, they recommended not going with the 0% plan because there was no savings in paying early. They suggested taking the incentives to lower the initial price at the non 0% rate and paying it down to save on interest and lower the total payback.

In my case, the money is coming from a Federal Employees savings plan (there is another thread on that). Over the last 5 years, the monthly increase has averaged to be about double what the tractor payment will be. Who knows if that will continue for the next 5 years though. I could have taken the entire amount to pay in cash, but there would have been a mandatory 20% withholding. I would have gotten most of that back next filing year, but I could not put it back in the plan since I'm no longer a Federal employee.

As it stands, a monthly scheduled withdrawl from that fund will make the tractor payment plus a small buffer for future implement or tool purchases, or maybe an extra loan payment each year. Since I wasn't using that money for daily living, I won't miss it and the fund should continue to grow as long as the market doesn't go nuts. It's really like Uncle Sam is making my payment for me at no real cost to me since there won't be any tax withholding this way and the monthly amount won't increase my annual income enough to make any difference. And it will all be done automatically once I get it set up, so I won't even see the money come or go at all.

 

[Silvic]

0% is simply a tactic to appear as borrowed money cost you nothing. An absolute fairytale. Proof? The price of the tractor will be more financing at "0" or if it stays the same, they are insuring that they are paying the financial companies with the residual with a high enough mark up. In other words you are not getting 15-18% off a tractor plus 0% unless the list for the tractor has been elevated as they do at some car dealerships.

Maybe for some manufacturers (Kubota for one) but not all.
I know when I got my JD back in 2007 there was no difference and it was not inflated.
When I got my ASV in 2015 the price was the same either way and I saw the dealer's cost so I know what the real price was. The dealer did not care how it was financed. Whether from my pocket or from the bank or from the Manufacturer's finance plan, the dealer made his profit, the same no matter how it was paid for.
In neither the JD nor the ASV case was there a cash rebate.
That I have seen with car companies and Kubota but those are the only ones that I have seen where it happened.

Your experience and so called proof only applies to the instances that you are familiar with at the time you knew of it.
Same as me.
I only know of the two instances when and where I bought.
Yes I did not get the Kubota as the pricing was VERY shady and I could not get a straight answer from 3 different Kubota dealers.

 

[bigcut]

You are coming from a direction that does not necessarily help you. You are looking at this as an "economics" lesson. Seems you're struggling attempting to justify a purchase. Answer this very basic question and everything else will be more clear cut: What do you need more of at this point in your life?

arrow, you're absolutely correct !! You really put things in perspective.

 

[dodge man]

Just my opinion here, if you need it buy it, if you don't, then save your money. I wanted a small tractor pretty bad and bought it, but I also paid cash for it, we could afford it. Now that I have it, I realize I didn't want a tractor, I needed it. You might be in the same boat, once you have it, you might realize how really bad you need it. If you look at just the money side of things, you would be living in a crappy house, driving a beater car, have bad worn out cloths etc.

 

[jdom84]

If you have a mortgage and you are paying cash for a tractor... you are paying way more money for that tractor then the cash value or a short term loan with interest would cost you.

lets say you just bought a house and land for $200k and you have $30k cash for a tractor. @ 4% you will pay $143,739.01 in 30 years in interest...

now lets say you bought that same house but paid $30k towards your mortgage and got an interest loan for your tractor at your local credit union for 3%.

$170k@4%x30years = $122,178.16
$30k@3%x5years = $2,343.64

but most people dont see it that way... they just see the monthly payments...

I personally don't like to pay any finance fees but on occasion I will when it makes the most sense and I really need what I'm buying. My wife and I worked our asses off to pay off everything we own at the age of 33 and we are just your average american wage workers.

 

[RSR]

Just my opinion here, if you need it buy it, if you don't, then save your money. I wanted a small tractor pretty bad and bought it, but I also paid cash for it, we could afford it. Now that I have it, I realize I didn't want a tractor, I needed it. You might be in the same boat, once you have it, you might realize how really bad you need it. If you look at just the money side of things, you would be living in a crappy house, driving a beater car, have bad worn out cloths etc.

Who says I don't?

 

[ZTMAN]

I really did not need a tractor, and really did not need to finance one, BUT, at 0 percent I am paying $228.00 per month. Only had it for one month but already got a year of smiles out of the little work horse.
I think I will enjoy the fruits of my labor instead of my heirs.

 

[Will_C]

0% financing is a tricky deal. I have bought a Kubota in 2009 and one in 2013. Both times i got 0% financing-dealer told me the price was the same no matter how I paid. When I bought my L3560 this past spring, the same salesman pointed out I could get $700 more in rebates if I paid cash. I had some money earmarked for the tractor, plus the proceeds from selling my B2620-I was going to borrow around 14k. Didn't want to raid savings that much, but I did to get that extra $700 off.

I'll add that this salesman put my L3560 together for me ( with $2500 worth of options) ) without a sales order, contract, etc. I trust them.

Will