New Tractor Sales Are Declining

[Cahaba Valley Farm]

Ah yes. If you think today is a problem, better first look back only 40 years to the 1980s. That 18% was for a secured real estate mortgage - just about the lowest rate on the best loan package available. Vehicle loans were higher, personal loans much higher. Machinery and farm loans were pushing unaffordable. Any loan typically required required equal collateral value to be pledged as part of the contract. Student loans required a co-signature by someone with financial backing who was willing to risk it.

Yet the financial media and Wall Street crowd is acting like today's inflation and interest rate hikes are the end of the world. I was reading a story a few days ago where the journalist went back to 1988 just to be able to say this is the fastest interest rate hikes in 34 years. Anyone who's been around knows this is not the highest or fastest interest rate hikes this country has experienced and if she had gone back 6 more years it would have made the interest rate hikes today look like nothing. This is what's wrong with the equities industry. It's not the equities themselves that's bad, it's crap like this that gives the industry a bad name and causes all the problems.

A lot of today's type of loans just didn't exist yet.
By comparison with then, today looks pretty good.

You mean in terms of low rates and easy approval?

To give the president at the time his due, he was a good guy who honestly thought his "trickle down" economics would work, and seemed surprised to find that those who were being "trickled on" weren't so happy about it.

The economy roared under him. So it did work but like anything there are going to be people who don't prosper. That doesn't mean it was a failure but rather a reality of life. It even says in the bible that there will always be poor among us.

 

[Cahaba Valley Farm]

Even with a decline in sales, not sure new prices will decline because of inflation affecting costs of production and delivery.

The prices will decline because people will not be able to afford the financing.

 

[5030]

My new tractor no computer, no emissions.

Not much in the way of tires either...

 

[Snobdds]

I bought my first house in 1987. My mortgage was 10% with FHA.

that means nothing.

What was the house price to income ratio? Back then it was around 2.5 as an average. There was a time a bank would not let you borrow more than 2.5x your annual salary for a house.

Today the house price to income ratio is around 8. Add that to the financing costs and you suddenly have a huge problem if income shocks hit.

 

[ovrszd]

If you've nothing better to do than argue with strangers on the internet with no point other than making yourself feel right then maybe you should look for a hobby or go for a walk. Cheers

If you have nothing better to do than listen to a couple knot heads argue on the internet with no point other than making themselves feel right then maybe you should look for a life. Cheers.

 

[ovrszd]

You obviously have a hair up your butt about something. I suggest you take a happy pill and go elsewhere and please, clean up your language.

Seems to be a trend...

 

[5030]

The prices will decline because people will not be able to afford the financing.

More like the payment plus the financing.... and the longer you stretch it out, the more finance you pay.

 

[jyoutz]

that means nothing.

What was the house price to income ratio? Back then it was around 2.5 as an average. There was a time a bank would not let you borrow more than 2.5x your annual salary for a house.

Today the house price to income ratio is around 8. Add that to the financing costs and you suddenly have a huge problem if income shocks hit.

We helped our son finance his first house last year. Mortgage lenders are still focused on a maximum 40% debt to income ratio like back in 1987.

 

[5030]

With interest rates going the way they are, I wonder when Kubota will curtail their 0 percent financing?

 

[CloverKnollFarms]

With interest rates going the way they are, I wonder when Kubota will curtail their 0 percent financing?

Depends on how robust sales are…..?

 

[Cahaba Valley Farm]

It was never zero percent but that is a whole another matter entirely.

 

[rScotty]

It was never zero percent but that is a whole another matter entirely.

Never say, "never". Our Kubota was purchased at zero percent, so the program did exist. I have no knowledge about what kind of deals that other people do.
rScotty

 

[jyoutz]

Never say, "never". Our Kubota was purchased at zero percent, so the program did exist. I have no knowledge about what kind of deals that other people do.
rScotty

My Kubota loan in December 2021 was also at 0%. But I believe that the company makes up for these loans by requiring KTAC insurance on financed units.

 

[Cahaba Valley Farm]

I have a question for you guys, do you believe in free shipping?

 

[Hay Dude]

I have a question for you guys, do you believe in free shipping?

You have to believe theres a “free lunch” if you believe in free shipping & 0% (free) financing.

 

[2manyrocks]

Kubota still had the 0 interest program when I purchased in April, 2022. I got the last L2501 that my dealer had in stock. Other dealers said they didn't have them in stock or that they were selling out quickly. It didn't make sense to me at the time that Kubota would be offering 0 interest when they apparently couldn't keep up with demand. Am I misunderstanding their 0 interest program? Is it really a money maker for them?

 

[ovrszd]

Never say, "never". Our Kubota was purchased at zero percent, so the program did exist. I have no knowledge about what kind of deals that other people do.
rScotty

His point, which I believe, is that the finance charge was written into the markup of the product.

No Corporation is going to lend you money free.

 

[ovrszd]

Kubota still had the 0 interest program when I purchased in April, 2022. I got the last L2501 that my dealer had in stock. Other dealers said they didn't have them in stock or that they were selling out quickly. It didn't make sense to me at the time that Kubota would be offering 0 interest when they apparently couldn't keep up with demand. Am I misunderstanding their 0 interest program? Is it really a money maker for them?

Yes.

 

[jyoutz]

His point, which I believe, is that the finance charge was written into the markup of the product.

No Corporation is going to lend you money free.

I think the finance charge is hidden in the required KTAC insurance. The cash discount isn’t very much, so Kubota can’t hide too much in the purchase price. Unless the cash buyers are subsidizing the people who finance?