a poor man's perspective: 0% gives the illusion of getting a deal. I know they aren't giving money away and they are only in the buisness to MAKE money. It is a way of justifying the cost even when you know you are bending over. Isn't that the whole purpose of even having it - to create the illusion? I have done all of them - 0%, cash, and rediculous interest rate. anyone with money can brag and beat their chest. i have listened to all the brags and just chuckled to myself. Hell, every dang man with the money will claim they are the victor. It is the poor man that has create his own feel good. all about illusions.
Kubota still offering 0 percent financing
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DonaldP
Gold Member
I agree... money may solve just about all financial issues.
But I can say this... as a newbie 2 years ago, I just recently was awakened to the reality of where we stand today over two years ago...(June of 2020 just as COVID was beginning to take hold).
I wanted to possibly upgrade my Extremely clean and excellently maintained Kubota Grand L3560HSTC/L805 loader/BH92 Backhoe with 517 gentle hours ... for a new Grand L4060 with the same exact accoutrements. I paid $52,000 in June of 2020.
For a modest $3000 difference in the base price between the new L3560 and new L4060, I was handed a $21,000 bill showing my trade in ($45,000 of the $52,000 I didn't when I purchased new), a very generous credit towards new of $5000 from Kubota for service support that I won't go into right now, and matching up COMPONEMTS with the addition of 3 rear remotes and an air ride seat....
$21,000 ... and that was without state taxes of $5500 on the new tractor-so $26,500 to upgrade.
Getting back to the point though... delivery could take up to 15 months.
My concern was twofold:
First, there was no price hold on the tractor or implements once ordered. So any inflationary increases would be at my cost. (Possibly 5% to 6% or about $3500 on delivery - which takes the additional costs up by an additional $3500 to now $30,000 to upgrade)
Second, There was no promise to hold zero% financing going into a period of the feds raising interest rates at a level unprecedented since the 1980's... phat chance zero % would be available in 15 months at the rates they are increasing things right now. I can't see how anyone, including Kubota could hold rates at 0%, unless like most here believe, they just pad the price to hold that 0% in place.
At 2 to 3% rates you can add $5000 over the life of the load so taking that $30,000 upgrade and adding even a $3600 cost to finance I'm up to $33,600 more money TO UPGRADE to a new 4060 from my 2 year old 3560...
That's a ton of money to invest yet again, into upgrading a 2 year old 530 hour machine to new... so to get on board with this order with those three or four things on the table is a risk that's a bit high for my tastes.
I could add a third challenge to this ...
And one that is relatively innocuous from the surface, but much more likely to result in a serious conflict if something goes awry.
The dealer states that I can keep my tractor, and use it u til the new L4060 arrives.
Now that sounds like a great thing... as I will continue to place maybe 250 additional hours on the equipment... but at two years the "bumper to bumper" Kubota warranty will be up right away. Like right Now. Any damages not covered by my inland marine policy or by the base manufacturers drive train warranty (6 years from purchase - or 4 years remaining) would be out of pocket for the L3560 while I'm using it. So basically anything of a Wear and Tear, or cosmetic issue that could make the tractor less valuable in the next 15 months would be on my dime.
So... I might be tempted to buy the Kubota extended warranty for an additional year to cover everything for an additional $1800.
(See the above mentioned proclamation that money usually can solve just about any financial issue!) ugh!!
So add another $1800 to the $32,600 and you get a staggering $34,400 to upgrade a 2 year old L3560 to a New L4060...
What would you do?
The biggest increase by far is the base cost to enter the much higher base rates of inflation now and on the next year.
Folks have said that the best thing to do to try to minimize one's impact by inflation os to not buy anything that's not absolutely necessary. I'm finding that to be a very true sentiment.
If I opted to buy I would be entering into the higher than normal cost structure that is making up the inflationary practices that fuel even more of this craziness.
This is not a "have to do" or "necessary" expenditure. So I'm thinking I do not need to spend that kind of money chasing something new. It's not worth that much to me. It's a portion of my life, not my life. For some it may be worth the expense and that's fine. I can't gauge someone else's needs to my own.
So in the end I may just buy the two year extended warranty for $3250 to cover the equipment (and all implements) for an additional 2 years and keep on keeping on. That's $3250 instead of almost $35,000. That sounds like a pretty cost effective choice for us ...
It's a mad Mad Homestead
Don
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jyoutz
Super Star Member
I think where Kubota makes up for the 0% finanacing is the requirement to buy KTAC insurance. It’s good insurance, but not cheap. And the odds are always with the insurance company.
DonaldP
Gold Member
I didnt have to buy KtAC insurance for the 0%.
I purchased my own I got an inland marine policy at $245/year ($1800 over 7 years) and it covers the same equipment... just not all managed in house via Kubota. It definitely beats the $5,500 Kubota would have charged me and rolled into the financing to cover the unit and the implements for the 7 or so years of the 0% financing.
I purchased my own I got an inland marine policy at $245/year ($1800 over 7 years) and it covers the same equipment... just not all managed in house via Kubota. It definitely beats the $5,500 Kubota would have charged me and rolled into the financing to cover the unit and the implements for the 7 or so years of the 0% financing.
Torvy
Super Member
@DonaldP. Lots to say in that post.
I am guessing that you would get more selling your tractor than trading it.
If you are not married to the orange paint, you could get a tractor with same or better features for much less. For about $34k, you could get T494H, B4820H, or MT347 and still have your existing tractor to sell. Bh would be another $7K or so. Even if you only sold your existing tractor for the trade offer, you would be +4k in your pocket, have more HP. That's about a $25k savings and you get a new tractor and new warranty.
Where are you that taxes tractor sales...can you get an ag exemption?
Spending by individuals does virtually nothing to inflation. Inflation is primarily about the money supply and that is the Fed and the Treasury. Against trillions, we could all buy or not buy new tractors and it would do nothing.
I am guessing that you would get more selling your tractor than trading it.
If you are not married to the orange paint, you could get a tractor with same or better features for much less. For about $34k, you could get T494H, B4820H, or MT347 and still have your existing tractor to sell. Bh would be another $7K or so. Even if you only sold your existing tractor for the trade offer, you would be +4k in your pocket, have more HP. That's about a $25k savings and you get a new tractor and new warranty.
Where are you that taxes tractor sales...can you get an ag exemption?
Spending by individuals does virtually nothing to inflation. Inflation is primarily about the money supply and that is the Fed and the Treasury. Against trillions, we could all buy or not buy new tractors and it would do nothing.
Torvy
Super Member
You may want to check with the insurance company, not your agent, about inland marine coverage. Unless you are using your tractor for business or the tractor is in transit between locations, you may not actually be covered. Read your policy in detail.
I have heard a lot of people who have this insurance, but may be at serious risk of non-payment because it is the wrong type of policy.
Inland Marine Insurance: What It Covers, How to Get It - NerdWallet
Inland marine insurance is business property insurance covering materials and equipment in transit or away from primary locations. It also covers special items.
DonaldP
Gold Member
It's true... one of the biggest positives is that I have 3 properties and it requires trailering to one and driving to the other.
Additionally, when it's used on one of the other properties it's not on the "home" insurance so it's covered under the inland marine policy.
Additionally, I was doing some downed tree log removal for a town near me. I had mentioned to my carrier that it was a personal agreement and not a business agreement that I would removed the downed trees (from a storm) at no cost to the town, while I would be able to use the materials for firewood.
This was considered something that would fall under my home insurance police as it's not a commercial agreement.
However in transporting the tractor to and from the site, the tractor would be covered under the inland marine police. Any other damages would be covered under my homeowners policy.
Were I to do commercial work and the tractor was damaged that would also be covered as far as the tractor, under the inland Marine policy.
Any damages outside of the tractor would be covered under my regular business policy.
So many choices but it sounds like the additional warranty will be needed to insure the deal. The fact that everything in the deal is dynamic and changes due to delivery timeframe is new to me. Since You cant lock In, that would cause me to wait because of my finances. I have to know what i am committed to. But that is me… i wish you luck and good results…
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DonaldP
Gold Member
I could ask several questions with respect to your comments about inflation.
Are you saying that if there is more money, such as the $ injected into the system by the govt between MAR of 2020 and DEC of 2021, that Inflation went up due to that?
Or are you saying that due to the very low supply side of materials and labor during that time that inflation went up for to lack of availability and the same amount of demand?
With respect to your thoughts about individual decisions not making a difference in inflation....
Are you saying that individuals purchasing items regardless as to price during inflationary times like this has no impact to the overall inflation rates?
Im looking at the real estate market..... I see hundreds of thousands of "individuals" buying homes at the highest rates in years during the 2020 to 2022 timeframe, regardless as to the asking prices.
Granted... they are individuals so assuming your thought process that these are "individuals", then we can assume that the increase in real estate values in that time frame (inflation) are not driven by demand because these are individuals?
I do agree that low interest rates (and available money supply) begat the initial phase of inflation...but I disagree that we as individuals can't impact the direction of inflation per the choices we make to pad our own desires over the good of our communities as a whole. No I'm not a socialist, but I do agree that personal choices can be made that positively impact not just ourselves, but all of those that we share this country with along with the world as well. example: purchasing Chinese goods and services vs American goods and services...
Were we to be competing against ourselves, and maybe not in a world where social communities like China beat out our American labor rates because they could care less about their air and water with non managed environmental controls that could but do not prevent dumping pcb's or other toxic materials that makes its ways to the farm fields and waters that grow the foods we import and feed to our families.
In reality, I think "individual" choice can only be available to us in its purest form if we each lived isolated on our own planets, maybe with only our families, where the choices we make only impact those we love most.
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Hay Dude
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Same here. Bought new Kubota M-126X and financed. Told KTAC to pound sand when they demanded insurance. I proved my own insurance and 10 years later I’m still running it. Tractor has been vandalized and had a tree fall on it while in transport and all was covered.
Torvy
Super Member
No, I teach economics and prices rising on real estate is not inflation (but it could be partially due to inflation). Inflation is an across the board increase in prices due to a rapid increase in the money supply. The biggest recent influence on inflation was the series of so-called COViD relief bills that dumped trillions into the market. Low interest rates have been there for a long time, they didn't create inflation, they were preventing a recession.
So, buying real estate may put upward pressure on home prices in that localized area, it does little to nothing as far as increasing prices a cross the country or outside of real estate.
This is a good interview that helps explain it.
News and Events - VCU Business - Virginia Commonwealth University
VCU Business News & Events page is your destination for stories that show the impact of VCU Business. Find events related to your interests.
business.vcu.edu
You are claming that the great covid giveaway is a big cause of our situation? I have heard that it was abused by many companies for wrong purposes. I know it helped a lot of poor folks, temporarily, that are still poor. It was Christmas!No, I teach economics and prices rising on real estate is not inflation (but it could be partially due to inflation). Inflation is an across the board increase in prices due to a rapid increase in the money supply. The biggest recent influence on inflation was the series of so-called COViD relief bills that dumped trillions into the market. Low interest rates have been there for a long time, they didn't create inflation, they were preventing a recession.
So, buying real estate may put upward pressure on home prices in that localized area, it does little to nothing as far as increasing prices a cross the country or outside of real estate.
This is a good interview that helps explain it.
News and Events - VCU Business - Virginia Commonwealth University
VCU Business News & Events page is your destination for stories that show the impact of VCU Business. Find events related to your interests.
I am fortunate in that i didnt qualify. I dont blame common families that benefited. I do blame any corporations that took it and used it for whatever. But that is on them. But corporations have no conscience…
I believe it was the perfect storm for our current situation.
Wow - this is really a great tooic. Maybe not the right place but anyway…
Randy
DonaldP
Gold Member
Randy, kudos to you for saying that. There are so many folks early on that said "heck ... it's free money, why not take it and run". Now those same folks are wishing to be still unemployed because they made so much money in unemployment that it wasn't necessary for them to work well into the end of non vaccination for the general public in post pandemic times.
I believe that's what started the US in it's slow demise and fall into high demand and low supply price increases.
We reacted too late in bringing folks back to work... Trump said immediately after he got COVID and just before he lost the "so called election" that we needed to get every single person that could work back to work, and we need to do it now. I agreed. But we waited and the dollars kept flowing into the hands of work capable folks for another year. In my opinion, that failure to act is what cost us the place we are in now.
Now it's catch-up time with an increase in rates to slow that demand, but it's becoming more and more clear that we can't blow smoke up the skirts of anyone now... the waiting may have cost us two to three years in a recession.
DonaldP
Gold Member
Great points!!!No, I teach economics and prices rising on real estate is not inflation (but it could be partially due to inflation). Inflation is an across the board increase in prices due to a rapid increase in the money supply. The biggest recent influence on inflation was the series of so-called COViD relief bills that dumped trillions into the market. Low interest rates have been there for a long time, they didn't create inflation, they were preventing a recession.
So, buying real estate may put upward pressure on home prices in that localized area, it does little to nothing as far as increasing prices a cross the country or outside of real estate.
This is a good interview that helps explain it.
News and Events - VCU Business - Virginia Commonwealth University
VCU Business News & Events page is your destination for stories that show the impact of VCU Business. Find events related to your interests.
So you are saying that these localized real estate areas of the country are not indicative of inflation?
My house went from $90,000 to $135,000 in 2 years in Central NY... am I in one of those localized markets? Same thing happened in Pittsburgh, San Antonio, Spokane, Providence, Tampa, Louisville, Denver, Sioux Falls, Wilmington, Boise, Cheyenne, and
Minneapolis.
hiddentacocatneddih
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Financing had caused inflation of vehicles. If financing went away over night, prices would come to reality.
Torvy
Super Member
All inflation involves price increases, but not all price increases are inflation.
If I had the time and the data, I could probably give you an idea of how much of the price increases are due to inflation and how much is due to regional price increases.
The CPI (consumer price index), which is the advertised inflation rate, takes a "market basket" of various goods and compares them over time to arrive at an inflation rate.
The PPI (Producer price index) takes a similar approach, but from a cost of inputs standpoint.
The CPI often understated inflation and the PPI is a leading indicator. PPI has been showing over 10% inflation. Inflation causes the price of raw materials to rise which is reflected in home prices. It can get complicated.
rScotty
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I don't teach economics at any level. I do advise & invest for a town, several businesses, and some individuals.
Donald, I don't know if you are in one of those localized markets or even know what localiaed means anymore. It sounds like your real estate went up 50% in two years. I'm familiar with the real estate in the rural area surrounding several of those cities that you mention. In every case I know, real estate prices have gone up much more steeply than has yours. Even had your house doubled - or higher - it probably would not be enough to enable you to move directly into a similar place in those areas you mention. So although your area house price increase may look startling, it is very modest by comparison with those others.
The resulting changes in your tax base may be something that you should pay attention to.
Keeping the local taxes from from increasing is the one area of monetary policy where local action may actually do some good. It is also an area of money policy where small changes can have a large influence. Please become active in deciding local tax issues.
When using economic theories as anything more than coffee conversation, I would caution that economics is a "soft" science. Economics has not yet progressed to the point of having many theories that can reliably predict results.
On inflation, there is always confusion about the popular use of "inflation". Experts & talking heads use the word "inflation" when they are actually talking about consumer prices & related indexes - not inflation at all. Sticking to consistent definitions helps to understand trends. And in economics, trends are eveything.
But regardless of definitions, our economy is what it is. It may not be true science - or much influenced by what we wish it to be - but that doesn't make it difficult to understand.
Economics is simple, understanding it is necessary, and it would be nice if it were more influenced by discussion.
One good thing is that helps keep things optimistic is knowing the USA with all it's economic problems is not the worst economy in the world - not by a long, long shot. Ours is down recently, but the USA trend since 2020 is up, not down.
The world has a bewildering variety of entirely different types of economies that all seem to be able to interact as they stumble along. That makes dry subjects like comparative finance fun to talk about.
rScotty
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Hay Dude
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I think that wasn’t the beginning, but the end. The US had already given away all it’s industry to China and Mexico from the mid 90’s (NAFTA) until 2019. Interest rates were too low for too long. The Covid checks and the trillions spent were the final nail.
Now we have what we have. A complete and utter mess.
I totally agree with Hay Dude. I/we watched as asia became our candy maker. I saw the gigantic ships up close loaded with all the neat plastic for us to enjoy. Myself being no exception. But always in the back of my mind that little voice saying ‘something is wrong with America’. Wal mart and the likes found their sweet spot without regard for their own. Money talks and BS stands watching…
Dare i say i am on the side that believes it was a normal election…but again - probably way off topic.
Randy
Dare i say i am on the side that believes it was a normal election…but again - probably way off topic.
Randy
jyoutz
Super Star Member
I don’t know how the US ever returns to manufacturing of cheap consumer goods; high end manufacturing yes. I can give some examples of great US products I own that will never be economically feasible as a mass product: I buy Whites boots (completely US made) for $500. I own several Pendleton wool shirts at $125 each. This is the cost of US made goods. I love these products and am proud to continue to support these companies, but I think they will always be a niche market. The US cannot compete in the mass market with affordable prices.
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