Will 0% Financing Be Around Again This Year?

[HappyOne]

I am looking at options for new Kubota equipment. Not sure I can decide by the end of June. I know the last time I bought it was in the fall and they offered 0%. Is it common for it to be offered several times during a year?

 

[sea2summit]

I’ve had Kubota’s since ‘09 and I think there’s always been a 0% option at some length. But it’s an odd market right now.

What type of equipment?

 

[HappyOne]

The ultimate toy. Skid Steer.

 

[Ortimber]

I do know that 0% isn't always available on construction equipment (skid steers and excavators).
On the AG side, it's always available to my knowledge.

 

[celtsrevenge]

It is only a sales gimmick to generate sales. The 0% financing is merely built into the sale price. There are no free lunches.

 

[Hay Dude]

You could have 0% financing even if interest rates are 20%. They just make the purchase price higher.

 

[JJZ 109]

With excellent credit I was at 4.8% for a 28 hour used BX2380 in June 2020 with KCC. Not sure if that was because it was considered "used" or if the zero percent just wasn't being offered at the time. I paid up front to have a loader installed instead of financing it with the tractor. Those 28 hours saved me a few thousand over buying new, even with a $600 delivery fee because the dealer was a few states away.
But yesterday I paid it off 3 years early so the rate has become null & void. I have no proof that the 2 posts previous to this one are true about the zero percent just being factored into a higher purchase price. But I can't say that I'd be shocked by that.

 

[MoKelly]

But yesterday I paid it off 3 years early so the rate has become null & void. I have no proof that the 2 posts previous to this one are true about the zero percent just being factored into a higher purchase price. But I can't say that I'd be shocked by that.

Every company in the US has paid off all their older, higher interest rate bonds early - and reissued long term under current interest rates. It’s a no-brainer. It’s historically low.

Businesses have competent finance people. They look at total profitability per unit sold - purchase price, interest received from customer, holding costs, etc. If purchase price goes down, they need higher interest to offset. If interest goes down, they need higher purchase price. As the late, great Milton Friedman said “there is no such thing as a free lunch”.

Today, holding costs are almost zero as demand is well above inventory.

MoKelly

 

[MHarryE]

I bought my SVL having to pay Kubota interest for the first time. I’ve had 5 other zero interest loans from GR2120 to RTV all the way to M7-171 which cost nearly 4 times the SVL but no give on construction.

 

[two_bit_score]

You could have 0% financing even if interest rates are 20%. They just make the purchase price higher.

I saw an email from Bobcat offering 0% for 84 months on new compact tractors. It’s always in their interest when they offer it.

JD was only offering 2% for 48 months on CTL’s.

 

[two_bit_score]

I am looking at options for new Kubota equipment. Not sure I can decide by the end of June. I know the last time I bought it was in the fall and they offered 0%. Is it common for it to be offered several times during a year?

The companies look at every angle and figure the best outcome for them. You must do the same. But don’t act out of fear that a good deal won’t last or that it will never come around again because it will.

 

[HappyOne]

I bought my SVL having to pay Kubota interest for the first time. I’ve had 5 other zero interest loans from GR2120 to RTV all the way to M7-171 which cost nearly 4 times the SVL but no give on construction.

They are offering 0% for 60 months on SVL's at this time. Pretty tempting offer.

 

[ericm979]

It is only a sales gimmick to generate sales. The 0% financing is merely built into the sale price. There are no free lunches.

Yes and no. Kubota (and many car and truck companies) use low or zero % financing as a factory sales incentive. The list price remains the same but the reduced interest lowers buyer's payments so it's like they lowered the price. Sometimes there is also a rebate for cash buyers.

It is a sales gimmick to generate sales. But so is lowering the price. There's nothing wrong with that. It's how markets are supposed to work.

 

[MHarryE]

That is good. I am paying 4.25% on mine.

 

[Daniel2021]

I'm not sure about the deals but whenever I need money to meet my urgent requirements, I always prefer to choose the services of payday loans in MI online. It is very easy to apply and avail of the loans there online.

 

[two_bit_score]

I'm not sure about the deals but whenever I need money to meet my urgent requirements, I always prefer to choose the services of payday loans. It is very easy to apply and avail the loans there online.

I usually hock my Relux watch to the loanshark on the corner.

 

[Hay Dude]

If I have to finance, I rarely use manufacturers financing. Instead, I negotiate best possible deal with the group of dealers I like, then use a separate financing company that offers me low rates and excellent terms.

 

[5030]

You could have 0% financing even if interest rates are 20%. They just make the purchase price higher.

Interest rates don't concern me all that much anyway. I write them off as a business expense. I'm pretty sure Kubota rolls the 0 interest into the price of a unit.

 

[two_bit_score]

If I have to finance, I rarely use manufacturers financing. Instead, I negotiate best possible deal with the group of dealers I like, then use a separate financing company that offers me low rates and excellent terms.

Back in the early 1980’s under Carter we had high inflation and high interest. I recall Jumbo CD’s paying over 16%. Banks were charging 20% at some point on Real property loans. It was crazy. I was a RE broker and people were actually buying property today because the interest rates might go up tomorrow. It was a frenzy. During that time more and more properties were ‘owner financed’ at below market rates. Prices were inflated to make up the difference.
But if you told a buyer that this property was 100k but the owner would finance with $xx down and 10% interest they were very interested in that property opposed to the bank rates.
Seems like most everything we closed for awhile was on a Warranty Deed with Vendor Lien.

 

[the old grind]

IMO 'beat the system' by getting a lower cash price, put a bunch down, get the best financing rate from your CU or bank and just pay the loan down early. I bet this is what many(!) of us do.

btw, financing will always be about a customer living with the payment negotiated. If a guy is willing to pay more for convenience, take longer, and/or if trading in having less equity it's often just a matter if budget. I'm sure this isn't news to anybody.