I would say "yes". Simply because you can MAKE money on that cash in the time it would take to pay it off.
Thoughts on financing
- Thread starter R4744
- Start date
re: What if you don't need a 2nd mortgage, don't have a job, and don't have monthly payment.... still finance it?
I fit all 3 of those conditions and I paid cash... Prefer to OWN outright everything from the getgo.
I fit all 3 of those conditions and I paid cash... Prefer to OWN outright everything from the getgo.
fried1765
Well-known member
Equipment
Kubota L48 TLB, Ford 1920 FEL, Ford 8N, SCAG Liberty Z, Gravely Pro.
Fortunately, your $ situation seems solid.
What Jay is pointing out is that if economic conditions should go sour, a tractor payment could possibly spiral into a major issue,..... for some.
Jay did pick a worst case scenario,...... but not an impossible scenario.
dirtydeed
Well-known member
Lifetime Member
Equipment
B2650 BH77, U27-4R2, BX23TLBM, box blade, rear blade, flail mower, Stump Grinder
Just to set the record straight, you do not need to have KTAC insurance when using Kubota financing. You just need to have the machine insured. Kubota credit will require all that insurance information prior to approving the Kubota credit application.
I did not elect to get KTAC on the excavator purchase using Kubota credit. The KTAC insurance was better that 4X the cost of adding the additional equipment coverage to my business policy. Yes, I may regret that decision some day but I wasn't about to pay the KTAC premium on top of an already inflated equipment price.
As far as 0% financing. I bought a new BX23 in 2006 with that very same credit offer. It's been around for a very long time.
I did not elect to get KTAC on the excavator purchase using Kubota credit. The KTAC insurance was better that 4X the cost of adding the additional equipment coverage to my business policy. Yes, I may regret that decision some day but I wasn't about to pay the KTAC premium on top of an already inflated equipment price.
As far as 0% financing. I bought a new BX23 in 2006 with that very same credit offer. It's been around for a very long time.
I often wonder how Kubota do financing, and whether it's in the local country/franchise, or done by Kubota global.
The reason this matters is that Japan has long had near zero interest rates. Companies like Kubota can borrow in Japan at rates that American companies only dream about (albeit Japanese interest rates have started normalising recently).
So if you're looking at zero % financing and thinking "oh, they're embedding 6% financing somewhere in the price", the reality may be that they're actually only embedding 1-2%, and taking the currency risk themselves. They probably treat it as a secured loan, because to them it's secured against a tractor that they'd be happy to have back (they know resale values on Kubota equipment), and that has KTAC insurance that covers basically everything that can go wrong. Financing for them is quite different than if you were going down to your local bank and getting an unsecured/personal loan.
The reason this matters is that Japan has long had near zero interest rates. Companies like Kubota can borrow in Japan at rates that American companies only dream about (albeit Japanese interest rates have started normalising recently).
So if you're looking at zero % financing and thinking "oh, they're embedding 6% financing somewhere in the price", the reality may be that they're actually only embedding 1-2%, and taking the currency risk themselves. They probably treat it as a secured loan, because to them it's secured against a tractor that they'd be happy to have back (they know resale values on Kubota equipment), and that has KTAC insurance that covers basically everything that can go wrong. Financing for them is quite different than if you were going down to your local bank and getting an unsecured/personal loan.
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When I bought my tractor in the fall of 2021, I paid cash and got a discount on the price because of that. I don't remember the amount, but it wasn't "huge". Now in 2025 I bought my KX-033 and decided to go with the 0 % for 36 months offered then along with the KTAC insurance. I could have paid cash, but figured why not use their money for a while and since I am very new at excavators the KTAC would be a good investment just in case. I know not everyone agrees with this approach, but it works for me.
This way I get to keep my wife happy by having more disposable funds available for other projects around the property (electrical upgrades in the house, landscaping etc.)
This way I get to keep my wife happy by having more disposable funds available for other projects around the property (electrical upgrades in the house, landscaping etc.)
The OEM does not do the financing. They 'might' have a company named 'Kubota Finance' that is really owned by "Household Finance' or 'GE Financial'. Cars are the same. The loan is not 'Made in Japan';.
When a vehicle contract is sold to the financing arm and is a zero rate loan, the OEM provides a holdback, a monthly payment to the financing company to make up for interest not earned. This is why you can buy at zero percent OR get a rebate.
For informational purposes, you can... do a sim0ple interest loan calculation, see how much in interest at a low rate (4%) you'd pay over say, five years. Compare that to the rebate. In Kubota world, you have to also factor in the value of KTAC too.
For some, knowing you own it from day one, not having to make that monthly payment (or debit) has value as well. Peace of mind.
Ass, grass or cash, no one tractors for free.
When a vehicle contract is sold to the financing arm and is a zero rate loan, the OEM provides a holdback, a monthly payment to the financing company to make up for interest not earned. This is why you can buy at zero percent OR get a rebate.
For informational purposes, you can... do a sim0ple interest loan calculation, see how much in interest at a low rate (4%) you'd pay over say, five years. Compare that to the rebate. In Kubota world, you have to also factor in the value of KTAC too.
For some, knowing you own it from day one, not having to make that monthly payment (or debit) has value as well. Peace of mind.
Ass, grass or cash, no one tractors for free.