Full figured 25hp Tractors

[donotlickthetractor]

I don’t know where people are finding big cash discounts? Every place I looked, the price was the same, cash or financing. There were a few specials but even they weren’t significant cash discounts.

I bought a ck2620 and received it yesterday. They (Kioti Canada) were offering ak discount for the loader and 2.99 for 84 months.

 

[arrow]

Kubota runs their own bank, don't they? I know Deere does, so that probably affects things.

Honda power sports side does, and they offer better intrest or no required extra insurance, and other incentives, to prop up their sales.

I recall a study done on their financing several years ago.
Their "0%" came out to be the equivalent of an 8% straight up loan.
All they needed to do was move pricing around and increase their msrp.
So their $25,000 tractor became a $28,000 tractor a year later when incorporating the 0% financing.
I think every tractor manufacturer does this and is where the real cost increases are manifest.
We had one tractor that went up $1500 in a month. You cannot tell me that was about increased production costs when this same tractor had steadily gone up in price all along with the biggest jump happening when it entered the 0% realm.
All it is and will always be is a pricing scam to lure in buyers. Some think that's just fine to do as it moves the economy.
For me its akin to seeing that beautiful woman in the doorway of the cabin in the woods seductively luring you into her home, only to find out she is just an ugly old witch once inside that plans to put you in her kettle.
I only got fooled once with that scheme cuz as a former logger, you're always in the woods that have plenty of cabins with witches living inside.
"Phew", I escaped a close one on that day.

 

[Rdrcr]

I’m sure that the required KTAC insurance pays for part of the financing. But I’m good with that. The insurance is pretty good.

This is the only issue I have with Kubota financing…the forced KTAC insurance. It should be optional assuming the buyer has an equivalent homeowners insurance policy.

I cancelled the KTAC insurance on both new Kubota tractors I purchased. Both were paid off in 12 months so it wasn’t a big deal either way.

Mike

 

[jyoutz]

This may be true, but st

I recall a study done on their financing several years ago.
Their "0%" came out to be the equivalent of an 8% straight up loan.
All they needed to do was move pricing around and increase their msrp.
So their $25,000 tractor became a $28,000 tractor a year later when incorporating the 0% financing.
I think every tractor manufacturer does this and is where the real cost increases are manifest.
We had one tractor that went up $1500 in a month. You cannot tell me that was about increased production costs when this same tractor had steadily gone up in price all along with the biggest jump happening when it entered the 0% realm.
All it is and will always be is a pricing scam to lure in buyers. Some think that's just fine to do as it moves the economy.
For me its akin to seeing that beautiful woman in the doorway of the cabin in the woods seductively luring you into her home, only to find out she is just an ugly old witch once inside that plans to put you in her kettle.
I only got fooled once with that scheme cuz as a former logger, you're always in the woods that have plenty of cabins with witches living inside.
"Phew", I escaped a close one on that day.

This may be true, but many brands don’t offer a significant cash discount, so why not take the 0%?

 

[paulsharvey]

Saw this while messing around, Foothills Tractor, Massey 2860E HST, $35k cash or $38k with Subsidized interest

 

[jyoutz]

Saw this while messing around, Foothills Tractor, Massey 2860E HST, $35k cash or $38k with Subsidized interestView attachment 1057343

One thing to keep in mind is that prices in the southeast are generally cheaper than the Rocky Mountains and west coast.

 

[CloverKnollFarms]

I don't know that I believe a dealer just "absorbs" the financing cost, to charge the financed the same as cash. It's probably more like the cash buyers pay for the financing if the financed buyers. That is more believable

 

[paulsharvey]

So, there is also a lot of middle ground between Cash and 0% manufacter loan; there are Farm Credit equipment loans with fairly low rates, conventional rate loans, ect. Mine is through a Credit Union in another state that does equipment and Ag loans, in addition to normal car loans.

If you have a credit union, it probably worth discussing what a loan looks like from them.

 

[arrow]

This may be true, but st

This may be true, but many brands don’t offer a significant cash discount, so why not take the 0%?

That’s the design of it. They make it up w increased msrp’s but they disguise that with the insignificant cash differences corralling you into the 0% scheme.
In other words it gives the 0% credence and you tell all of your friends how great it is.
I don’t care how financing is paid for. What bothers me the most is the underhanded methodology that is based on a falsehood that this purchase is costing you no money.
It’s a lie and we have enough of that going around in todays existence.

 

[arrow]

I don't know that I believe a dealer just "absorbs" the financing cost, to charge the financed the same as cash. It's probably more like the cash buyers pay for the financing if the financed buyers. That is more believable

Depends on the tractor kick backs. If your product goes up say $2000 in a year, some of that goes back to the dealer. So if it’s say a $1300 difference between cash and 0% and the dealer is going to get $800 back from the manufacturer, then he is only making up $500. That figure is made up with the additional profit on the machine and he gains a customer with nothing coming out of his pocket. The dealer looks like a good guy.

 

[paulsharvey]

How much is a dealer making off a new machine sale? Max 10%? Maybe 15%? I'm sure they make more like 25-50% off trailers and impliments, so that's why they do the package deals, I assume. I'm guessing they also are counting return customers (service mostly, but also future sales), in their business model?

Reason I ask, we are typically talking about new sales from even a good sized homeowner focused dealer being, maybe 3-4 per week? Hard to pay for a building, 2 salesmen, and have profit in that.

Service, I'm guessing if we say, $120/hr; that's probably 1/3rd overhead, 1/3 labor, and 1/3 profit?

 

[arrow]

One thing to keep in mind is that prices in the southeast are generally cheaper than the Rocky Mountains and west coast.

Both coasts are nuts.
People want to be near their creation point or closer to the sea.

 

[paulsharvey]

Both coasts are nuts.
People want to be near their creation point or closer to the sea.

We are close too both coasts; maybe 1h 15m to Atlantic, about 2h to Gulf

 

[arrow]

How much is a dealer making off a new machine sale? Max 10%? Maybe 15%? I'm sure they make more like 25-50% off trailers and impliments, so that's why they do the package deals, I assume. I'm guessing they also are counting return customers (service mostly, but also future sales), in their business model?

Reason I ask, we are typically talking about new sales from even a good sized homeowner focused dealer being, maybe 3-4 per week? Hard to pay for a building, 2 salesmen, and have profit in that.

Service, I'm guessing if we say, $120/hr; that's probably 1/3rd overhead, 1/3 labor, and 1/3 profit?

It used to be a 25% margin. No more these days.
Most dealers cannot survive on just tractor sales especially if a typically small dealership like ours.
It is why we sell chainsaws, generators, weed whackers, grass cutters, etc, etc.

 

[jyoutz]

Both coasts are nuts.
People want to be near their creation point or closer to the sea.

Rocky Mountains aren’t cheap and we’re not near the coast. SE and Midwest have the lowest costs on most everything.

 

[paulsharvey]

Rocky Mountains aren’t cheap and we’re not near the coast. SE and Midwest have the lowest costs on most everything.

Well, FLa is it's own animal. It pays like a southern state, costs like a northern state... But at the same time, a lot of shipping come through Jax/Tampa, and it's not far to the major "assembly" plants in GA/S.Car

 

[arrow]

Rocky Mountains aren’t cheap and we’re not near the coast. SE and Midwest have the lowest costs on most everything.

You near skiing?

How much is a dealer making off a new machine sale? Max 10%? Maybe 15%? I'm sure they make more like 25-50% off trailers and impliments, so that's why they do the package deals, I assume. I'm guessing they also are counting return customers (service mostly, but also future sales), in their business model?

Reason I ask, we are typically talking about new sales from even a good sized homeowner focused dealer being, maybe 3-4 per week? Hard to pay for a building, 2 salesmen, and have profit in that.

Service, I'm guessing if we say, $120/hr; that's probably 1/3rd overhead, 1/3 labor, and 1/3 profit?

Service allows breaking even some months and losing money other months. Service is $140 on diesel and 120 on gas stuff.
A good week is selling two tractors for a smaller dealership.
Out of 12 months, we had 2 months where service created a profit.
Margins on tractors range from 11% to 19% these days.

 

[paulsharvey]

Dang, sounds like a rough business to be in...

 

[arrow]

Dang, sounds like a rough business to be in...

It is no bed of roses for sure.
Me? I just try to do as much as l can for these super nice and straight up owners and try to have fun doing it.
They’ve been around since 1976 and started with Yanmar and Wheel Horse tractors.
Got the Mahindra dealership in 2003.
Parts sales are a large factor in profit modalities.

 

[jyoutz]

Well, FLa is it's own animal. It pays like a southern state, costs like a northern state... But at the same time, a lot of shipping come through Jax/Tampa, and it's not far to the major "assembly" plants in GA/S.Car

Yes. 7 or 8 good ski areas from 30 minutes to 3 hours from me.