Buying Advice What is going on here?

[newuser]

When purchasing and financing a tractor why would a dealer add money to the total and then put in that you made a deposit even though we weren't?

lets say buying a tractor for 10,000
but filling out the paperwork like the tractor cost is 13,000 and the deposit is 3,000

 

[Jim in ICT]

Probably makes it easier to run the financing through. I'm not sure I'd go further with the deal until I asked some questions.

 

[mburke121]

Also, unless you get the farm use tax exemption, you will pay sales tax on the higher amount.

 

[MtnViewRanch]

He is trying to get you the tractor with no money up front. The lender thinks that you have put $$$ down and is more likely to give you the loan. Lets just say that the lender would not like it if they found out and might not do business with that dealer any more. It shouldn't cost you anything, but what the dealer is doing is not right in my opinion.

Good luck

 

[newuser]

He is trying to get you the tractor with no money up front. The lender thinks that you have put $$$ down and is more likely to give you the loan. Lets just say that the lender would not like it if they found out and might not do business with that dealer any more.

not the case I would assume.. so again lets say he bumped the price up to 13000 .. I would still be required to have a downpayment besides the 3000 he put to offset what he added.

 

[RoyJackson]

When purchasing and financing a tractor why would a dealer add money to the total and then put in that you made a deposit even though we weren't?

lets say buying a tractor for 10,000
but filling out the paperwork like the tractor cost is 13,000 and the deposit is 3,000

That sounds pretty shifty, but I agree with MtnViewRanch...he's telling the lender you put $3000 down...I think.
But you really ought to ask him.
If he's doing what I think he's doing, it's fraud.

 

[mjncad]

Sounds fishy to me. Ask questions, and if you don't like the answers...run, don't walk away.

There are plenty of other places to buy a tractor.

 

[Thomas]

Maybe the dealer trying to help out w/purchase..better rate etc..I also be asking for the dealer to explain before signing.

 

[flusher]

When purchasing and financing a tractor why would a dealer add money to the total and then put in that you made a deposit even though we weren't?

lets say buying a tractor for 10,000
but filling out the paperwork like the tractor cost is 13,000 and the deposit is 3,000

When I used to finance car/truck purchases through my credit union, I'd get pre-approved for an amount maybe 10-20% higher than I expected to pay for the vehicle. Then go shopping and get the best deal I could find-always less than the pre-approved amount.

 

[jinman]

When purchasing and financing a tractor why would a dealer add money to the total and then put in that you made a deposit even though we weren't?

lets say buying a tractor for 10,000
but filling out the paperwork like the tractor cost is 13,000 and the deposit is 3,000

It doesn't matter what his reasons for doing this are, it is fraud and I'd politely tell him the price much match the real price. The tax consequences mentioned by mburke121 are enough reason to refuse to deal on a contract like this. If the dealer does this on a sale, do you think he would think twice about misrepresenting something else? My "red flag alert" would be flying high, and I suspect yours is too and why you posted about this.

 

[Pops15]

I agree with the others that say its a fraudulent way of getting your financing to go through, but it could be something legit like he's applying factory incentives to your purchase. Either way, you'll likely get stuck paying additional sales tax.

 

[ctlguy]

This does seem odd to do on a non trade purchase but does it happen on traded equipment? absolutely, When trading and purchase price is based on list the trade value is always overvalued over the actual cash value. That being said in this economy I would think that dealers would be more interested in gaining as much down as they can since a lot of equipment notes are full recourse to the dealer at least in terms of their reserve account with their lending institution. I can not think of any owner who is willing to let his reserve money be put at such a risk wich would lead me to believe that the purse string holders may not be aware of this misleading info being put on a retail note. I would ask the boss / owner if this is how they really prefer to run the note.

 

[beenthere]

Might this be the salesman doing this, rather than the dealer?
Maybe your salesman is turning in paperwork that looks good to his boss, and for the dealership to pass on within their own set of books. Could be any number of reasons to satisfy the book-keepers as well as other promotions. But someone should be wondering where that $3000 is floating around the room, or under the desk (so to speak).

But bottom line, ask who is doing it, and what it really means. Or don't do it.

 

[AustinTX]

I have moxed feeling son this.

Let's say the unit retails for 20K. And lets assume a lot of units were sold at financed on that 20K figure, with 10% down- financing 18K.

If you are a good negotiator or shopper and negotiate a price of 18K - why shouldn't you be able to make the identical financing of 18K on the same unit as the guy who paid retail? In both cases, the amount financed is the same. If the bank made you put down 10% on you 18K purchase, then you only get a loan for 16,200. For the same machines, why should you have to provide less risk to the bank than the other guy? That does not seem fair, either, to the purchaser.

THe good shopper and lazy shopper are buying the exact same machine- and the bank gives the lazy shopper 20K, but only 16.2K to the good shopper.

I think banks should loan based on the value of the asset (and the creditworthiness of the purchaser), which may or may be reflected in the price you pay.

 

[jimmyj]

I think if what is being put on the paper is different than the "truth" you should not do it.

 

[LBrown59]

I don't know about installment loans but I see nothing wrong with it when it comes to mortgages as the loan value should be determined by the real estates value rather than it's selling price.

 

[MtnViewRanch]

I don't know about installment loans but I see nothing wrong with it when it comes to mortgages as the loan value should be determined by the real estates value rather than it's selling price.

Isn't the value what the selling price is? I always thought that something was worth what someone would pay for it. :confused2:

 

[CurlyDave]

I don't know about installment loans but I see nothing wrong with it when it comes to mortgages as the loan value should be determined by the real estates value rather than it's selling price.

I have an even better analogy.

What is the difference between a dealer giving a $3000 discount and applying that as a down payment on a finance agreement, and a car manufacturer giving a $3000 rebate, which is applied as a down payment on a financing arrangement?

When Ford or GM does this they advertise it on TV and in the newspapers and no one bats an eye. If a tractor dealer does it, some of us think it has suddenly become unethical. Why?

It appears to me it is a tried-and-true business practice. Obviously the dealer did not explain it very well to the OP, but that doesn't make it unethical or fraudulent.

 

[newuser]

I have an even better analogy.

What is the difference between a dealer giving a $3000 discount and applying that as a down payment on a finance agreement, and a car manufacturer giving a $3000 rebate, which is applied as a down payment on a financing arrangement?

I'm trying to keep it anonymous. There no absolutely discount available. does this tactic show better sales or what? filling out on paper 13,000 and 3000 downpayment for a actual 10,000 deal. but telling my i still need to make a % downpayment.

 

[MtnViewRanch]

I'm trying to keep it anonymous. There no absolutely discount available. does this tactic show better sales or what? filling out on paper 13,000 and 3000 downpayment for a actual 10,000 deal. but telling my i still need to make a % downpayment.

Simple thing to do, point blank ask him what and why he is doing this. All that we are doing is guessing. If you don't like his answer, then do something else.