Just out of curiosity , is anyone getting different offers like a cash price vs financing price for 0%? Seems the 0% interest offer comes with a higher price tag.. essentially building the interest you might pay into the upfront price of the machine instead of having a purchase price and paying a certain interest rate.
Financing through Bank
- Thread starter SteveBX23
- Start date
I paid cash for mine. I simply didn’t want to carry a loan for it. Two different dealers gave me a “cash discount” in their quotes. I bought mine in Feb.
mcmxi
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***Current*** M6060HDC, MX6000HSTC & GL7000 ***Sold*** MX6000HST & BX25TLB
My dealer offers no discounts for cash vs. Kubota financed since it makes absolutely no difference to them how I pay for the tractor since they're not the ones financing it. Kubota doesn't give them a kick back on cash or non-Kubota financed sales so I don't really get why any dealer would give a lower price for a cash purchase.
Here's the funny thing, paying cash for a tractor that you can buy at 0% doesn't make much sense since the tractor depreciates and that money could earn money if invested. If you have a mortgage, using that cash to pay off a substantial chunk of the mortgage would be a far better investment since it would greatly reduce the interest paid over the life of the loan.
As for payment options when buying a tractor, if you own a house you can get a Home Equity Line Of Credit (HELOC) which at my credit union has an interest rate of 5.25%. The interest can be deductible depending on what you use the money for and a tractor could be used for home improvements. The risk is that many will only pay off the interest each month rather than the principle plus interest so get stuck with a lump sum pay off down the road. If you use it like a standard loan you can borrow money fairly affordably compared to other loans.
Here's the funny thing, paying cash for a tractor that you can buy at 0% doesn't make much sense since the tractor depreciates and that money could earn money if invested. If you have a mortgage, using that cash to pay off a substantial chunk of the mortgage would be a far better investment since it would greatly reduce the interest paid over the life of the loan.
As for payment options when buying a tractor, if you own a house you can get a Home Equity Line Of Credit (HELOC) which at my credit union has an interest rate of 5.25%. The interest can be deductible depending on what you use the money for and a tractor could be used for home improvements. The risk is that many will only pay off the interest each month rather than the principle plus interest so get stuck with a lump sum pay off down the road. If you use it like a standard loan you can borrow money fairly affordably compared to other loans.
I just upgraded from a2019 L2501 with 5 years still left on the kubota financing to a new mx5400.
the dealer offered me $14000 tradein on the L2501 I didn’t think that was enough so I put it on Craigslist for $17500 the very next day had a guy buy it for $17250 in cash.
the day after that I paid off the loan threw kubota on it and took the $6000 I had left and put it down on a new mx5400.
I checked around on private financing and found U.S. Bank will finance tractors at 3.99% interest on terms up to 12 years. So I called my credit union and asked for a rate match.
It took a couple days for a top loan Officer to call me back but after talking she crunched a few numbers looked at my credit and matched it 3.99% for 12 years.
I bought a new mx5400 with backhoe and loader from my dealer for $40600 a with a payment of $306/month
the dealer offered me $14000 tradein on the L2501 I didn’t think that was enough so I put it on Craigslist for $17500 the very next day had a guy buy it for $17250 in cash.
the day after that I paid off the loan threw kubota on it and took the $6000 I had left and put it down on a new mx5400.
I checked around on private financing and found U.S. Bank will finance tractors at 3.99% interest on terms up to 12 years. So I called my credit union and asked for a rate match.
It took a couple days for a top loan Officer to call me back but after talking she crunched a few numbers looked at my credit and matched it 3.99% for 12 years.
I bought a new mx5400 with backhoe and loader from my dealer for $40600 a with a payment of $306/month
mcmxi
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***Current*** M6060HDC, MX6000HSTC & GL7000 ***Sold*** MX6000HST & BX25TLB
That's almost $9,500 in interest, not to mention insurance for 12 years. I don't like paying interest on things that depreciate significantly.
Agdirect has loans for private party equipment, catch is, they start at $25,000 minimum. Rates are 3.49% to 4.29% depending on life of loan. This is on equipment up to 15 year old. Rates go up on older than that.
As the post above me said, think of what that tractor will actually cost AFTER it has been paid off. I could find used tractors instead of ordering a new L4060, however, that difference in price between new and used, in today's market, is slim, $2,000-4,000 if lucky, would actually be $3,000-5,000 more than the new one at 0%.
If you can't qualify for 0%, you more than likely won't qualify for 3.49% either. Even then, a slightly higher rate on new will still be better than the higher rate on used.
As the post above me said, think of what that tractor will actually cost AFTER it has been paid off. I could find used tractors instead of ordering a new L4060, however, that difference in price between new and used, in today's market, is slim, $2,000-4,000 if lucky, would actually be $3,000-5,000 more than the new one at 0%.
If you can't qualify for 0%, you more than likely won't qualify for 3.49% either. Even then, a slightly higher rate on new will still be better than the higher rate on used.
fried1765
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Equipment
Kubota L48 TLB, Ford 1920 FEL, Ford 8N, SCAG Liberty Z, Gravely Pro.
"doesn't make much sense, since the tractor depreciates"
It does?
I bought a tricked out, exceptionally low hour 2006 Kubota L48 TLB 28 months ago, for $32K cash.
Today, the dealer estimated value is $45K +!
I'll take that 13K+ "depreciation" over 28 months, any time I can get it!
No kidding. Back in 2002 I bought a B2410 with loader, total cost with financing was $17,450. That's the full amount it cost me when it was fully paid for. Today, it is selling for ~ $12,000. So I used the tractor for nearly 20 years, and only lost $5,450. Try doing that with a car. I have a backhoe on it now, and that setup is somewhere between $15,000 and $18,000 depending on hours. I would say it has a pretty good ROI.
mcmxi
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Lifetime Member
Equipment
***Current*** M6060HDC, MX6000HSTC & GL7000 ***Sold*** MX6000HST & BX25TLB
Yes, let's take an anomaly and apply it to all tractors, at all times and for all times.
fried1765
Well-known member
Equipment
Kubota L48 TLB, Ford 1920 FEL, Ford 8N, SCAG Liberty Z, Gravely Pro.
No!Yes, let's take an anomaly and apply it to all tractors, at all times and for all times.
Let's not apply your reasoning to JUST tractors.
I also got a similar gain on a used Mercedes E350.
Same for many other items, including real estate.
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