trying to choose between three tractors...

[Anonymous Poster]

Zero percent financing...

I appreciate all the insight, and thoughts, on which way to fund this transaction, however, at the Kubota dealer, I went through the entire process essentially telling him this was a cash deal (and it is, or can be, if I decide to not use their money for the funding cost of $180)....It was at the very end of the deal, when he had already given me the cost, that I asked if Kubota had any type of financing incentives right now. He was very straight forward, and said, yes, there was the 0% for 36 months, but that to do that, the paperwork would cost the $180 (thats 1.08% of the total of the tractor if I financed the entire cost, which they won't do...they finance 80% of the total). He then told me if I were to do the financing, I would have to insure the tractor for the amount financed.....this, on the onset may sound like a ploy for Kubota Insurance, however, he gave me the cost ($13 a month for the term of the loan), and suggested I talk to the local insurance agent who I do business with for my other vehicles and farm, and see which is the better deal...

So, in a nutshell, unless ya'll think the price I was quoted of $19,500 for a MSRP tractor, mower, and FEL of $23,358 is wrong, I think this does amount to zero percent financing...

I can do it either way, write a check, or use my funds ($15,600 would be the 80% financed) to try to make a ton of money in this current stock market (just kidding).....unless ya'll know a great stock to place it in!

Well, thats a little tongue in cheek, but I do understand the financing, and there was no "squirming" when, at the end of the here's your cost for the rig, I asked if there were any special Kubota financing deals at this time...

As always, your thoughts are appreciated..Capper

 

[Anonymous Poster]

Homles..the 4310

If you read my later posts, I finally "sat" on the 4310 this afternoon..Its truly a wonderful feeling rig, and I'm sure you will enjoy it..If all other things were equal (a dealer here in town for the JD, and it not costing 2 grand more than the 3130), I'd more than likely buy it hands down....but, now, I'm in a bit of a quandry...as far as the feel of the FEL, I agree, the 3130 (or last years equivalent) was "tough, but rough"...the JD felt smooth all the way around.

Thats why I have decided to wait till the new L3130's hit the Orange dealer here in town, go down and sit on it, then head back up 30 miles to the JD dealer and sit on the 4310 one more time before spending my money, and making the final decision. I think either one would be a great rig for what I need it to do, but the L3010 (last years model, which they had on the lot today) didn't seem quite as smooth, and was a bit overwhelming to the wife....but, she gets used to things such as that..

thanks again for your input....Capper

 

[BigDave]

Re: Thanks Murph!

</font><font color="blue" class="small">( None of us here are dumies. )</font>

Whooaa!!! /forums/images/graemlins/shocked.gif I hope you aren't saying someone's a dummy if they take the free financing. In each offer, we non-dummies should run the numbers and determine which is the best deal. I believe I made out like a bandit when I bought my car. I took the 0.9% financing for 4 years, I let them make the first payement, and the dealer gave me $4000 off the price of the car. I saved $5800 in financing charges when compared to my Credit Union's best rate, AND there wasn't a cashback offer in lieu of the financing anyway. I'm pretty sure that I couldn't have gotten $9800 off the list price, even if I showed up with a suitcase full of cash. The $4000 discount took me down to invoice price anyway. I guess I could have asked the dealer if he had another $5800 of wiggle room, but why torture someone needlessly? /forums/images/graemlins/wink.gif

If you have been following the economic news, car sales had been up because of the low-rate financing offers, but the manufacturers were losing money on the deals. At the begining of the year, Ford said they couldn't afford to keep the low rate financing, but GM said they would. So Ford had to keep their programs to avoid losing market share. So it looks to me that the manufacturer's are carrying a good portion of the burden of the low-rate financing.

 

[Anonymous Poster]

Big Dave...

Thats pretty much how I'm seeing this Orange deal, not a lot of room for any more maneuvering, with almost 4 grand off list, and 0%...
By the way, I noticed at the end of your post, the R4's on your rig...how do you like them (the JD sales manager was mighty hot on them, after I told him I thought I needed turf tires, since I'm going to finish mow about 6 acres of lawn)...thanks in advance, Capper

 

[Anonymous Poster]

Re: Thanks Murph!

<font color="blue"> even if there isn't a cash incentive, you can't get "best" price and the "free" financing. </font>

I suppose that could be true if along with so called zero percent financing the factory took away hidden dealer incentives that the dealer could use to give you a better price. Then it just becomes a game that changes nothing. Unless you pay cash, then you lose because the dealer can't lower the price as much as he might have before...When he had those hidden incentives...

Last year when I bought my 2002 Ford van, I shopped around and bought it through the fleet manager at a local dealership. I offered my business to about 10 dealers, via fax, and I bypassed the salesmen completely. I was able to get a deal for the published "invoice" price. This may or may not be a real number, but if you can buy a vehicle for "invoice" it is generally considered a good deal. Often a couple hundred over invoice is considered a very good deal.

Anyway, after the purchase agreement and before delivery, Ford came out with 0% financing. I had the option to pay cash or take the zero percent. It was a no brainer. I did wish for a cash incentive, but it was not there. I am now paying it off over 36 months.

The point is...if this wasn't zero percent financing in real terms then I don't know what is. My gain and Ford's [not the dealer's] loss. As far as I know the dealer still made the same profit regardless. I had intended to pay cash for the van, but could not give the money early when I could let it gain something for me over the three years in a bank account.

I don't know if tractor dealers generally get some reward for getting people to finance things or not. Does anyone know if they do?

When I bought my Kubota last summer I asked the dealer if a cash deal would make a difference and was told it made no difference to him, and we talked price only, not whether it was going to be a cash sale or financed. And the price I got was not a bad one...

When it is all over and the price is agreed upon, if you have the option to pay cash or take a zero percent loan, take the loan.

Then try to figure out if you got the best price... /forums/images/graemlins/grin.gif

 

[BigDave]

Re: Big Dave...

Cappy,

This is my first tractor, & I only have about 70hrs, so I'm no expert....but I'll offer an opinion anyway. /forums/images/graemlins/grin.gif Basically, my dealer, who sells both blue & orange, said that if I was to use a FEL, then I needed R4's. They are a much stiffer tire, thus less bounce when using the FEL. I checked the great knowledge bank called TBN, and it seemed R4's were the best all-around tire. The R4's didn't mark up the lawn this past summer while mowing under somewhat dry conditions. I did mark up the lawn in areas where I had to do tight manuevers while using the FEL. That said, I am a little nervous thinking spring is around the corner and all of this snow is going to make for a wet & sloppy lawn. Time will tell.

 

[JimMc]

Re: Thanks Murph!

I definately am NOT saying you're a dummy for utilizing the 0% finance option. Just that you should understand that whether the dealer admits it or not, there are other incentives and they should be weighed if you can find out what they are. Of course, my only option right now would be to utilize the 0%. I have every bit of cash tied up. No way to cash flow a big ticket purchase. So if I were in the market for a new tractor, I would use the 0%. But I would also understand I had financed more than if I had walked in the door with real cash, regardless of the protestations of a dealer caught with his hand in the cookie jar. I guess that was a bit strong, sorry. /forums/images/graemlins/blush.gif I will make room for other possibilities. There are situations where dealers don't fully understand their programs and may honestly believe there are no (or they do not qualify for) other incentives. It's kind of like buying cars "below invoice". Technically, they're telling the truth, but I can sell cars "below invoice" all year and at the year end make a profit from incentives.

 

[thcri]

Re: Thanks Murph!

</font><font color="blueclass=small">( So it looks to me that the manufacturer's are carrying a good portion of the burden of the low-rate financing. )</font>


Exactly, someone had to pay it someplace. In some cases the manufacturer will share with a dealer or in my case with the furnaces it is split a third. These finance companies even though they say GMAC or FMCC or Lennox are not owned by the manufacture. In your case you got a good deal because of a program. And yes the manufactures all got hurt by it but it was the only way to sell cars at the time. Again someone paid a finance company for the lower interest rate. If the car manufacture revealed this maybe you could have bought lower???? Just not sure. And as far as calling any one dummies, I said no here is a dummie. This type of marketing is not new to anyone.

sorry I offended you Dave.

murph

 

[rockyridgefarm]

Re: 0% Financing!

OK, I work with car dealers, and it is well known that there IS one area where some manufactures have an advantage others don't get. An offshore corporation can make literally thousands on a deal just by the exchange rate. So, they could lower the price by several thousand, and still make the same profit as a domestic competitor. Except, then they get to look like a "low budget brand" and not as "high quality" So - price like the others, but pass on low interest financing. So the dealer may not be affected in the least by this, although I wouldn't put it past the manufacturer to squeeze a little from them, too...

I am not suggesting that this is unethical, or anything. Like "cheap foreign labor" it is a fact of business.

 

[Knight9]

Re: Thanks Murph!

</font><font color="blue" class="small">( Make your deal with them based on the fact that you are going to pay cash and then at the last minute tell them you decided to take them up on their offer of free interest for a year and watch them squirm )</font>

Had a situation similar to this. Was buying a Ford Windstar and didn't like their interest rate. I was going to do it through my bank who I had a number of other items going on and cheap interest. The dealership had done up all the paperwork and the salesman called to tell me that Ford had just announced 0% on the Windstars for 48 months. He offered that to me even though we'd written everything up. I took it....obviously. No change to the best price we had already negotiated. Sure looks to me like free financing.

Kevin