If that were true - and I don't know if it is or not - but, if it were true then wouldn't the dealer be likely to lower the price for cash?
I negotiated on several Kubotas at several dealers and none of them offered a different price or any kind of incentives if I would go cash instead of 0% financing.
And if that's the case at every dealer, doesn't it mean that the 0% financing is effectively the same as cash price?
The Dealer, unless he's an imbecile, should lower the price for cash.
The Company, Kubota in this case, makes the Dealer 'Co-Op' the cost of 0% financing. IOW, the Dealer has to kick in some of his profit in order to get the financing deal. Don't know the fine print but I suspect it's around a point (1 percent) or point and a half.
Money is a commodity. It is bought and sold like any other commodity.
So if you do a 0% loan on a $40k tractor, the Dealer, I can PROMISE you, is kicking in at least $600.
It gets complicated and I can barely understand it myself, much less explain it. But that's the deal. You just happened to run into a Dealer that's not exceptionally bright. Or maybe just clueless.
Maybe this will help. Or not..... Keep in mind, Money in Japan isn't like it is here. While Banks pay us to keep our money in them, Japanese banks actually charge their customers. I think it's that way in Germany, too. It's complicated. And cultural.
It's important to understand what mortgage points are when seeking a loan. Better Money Habits can help determine if buying discount points makes sense.
bettermoneyhabits.bankofamerica.com
Japan's negative interest rate policy has failed to generate economic growth, but the central bank keeps trying to print up prosperity.
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