Low or zero percent financing isn't always paid for by higher unit prices. There are factory subsidized programs, such as rebates or low rates, and then there are buy down rates. About 25 years ago, as a sales manager at a car dealership, I hooked up with a bank and sold the heck out of cars with a buy down rate. We paid the bank a flat $500 for every deal they financed for us and all of the contracts written through them was at something like 5% interest rate (normal rates were well into the double digits). It didn't matter if it was a new or used car and they did any term up to 48 months (remember, 25 years ago). We pretty well sold out of cars in 2 months. Then every dealer in town came out with a similar deal.
What I described, a buy down rate, is just what it says; the interest rate is bought down by the seller. Obviously, we had to hold $500 more profit on each unit we sold to cover the expense. For some, it was still a bargain because they financed enough that the lower rate saved them over $1000 in interest expense. For others, who didn't finance so much, it wasn't such a good deal. For the dealership and the bank, it was a good deal. The bank put a ton of business on their books and our dealership had record months. I think it was along in about 1985 or 1986 that Chrysler was the first manufacturer to jump on that band wagon and actually subsidize the rates from the factory. I do recall the rate then. It was 7.5%. We had it painted in huge letters across the large glass windows on the showroom. The next morning we had people literally standing next to new minivans physically holding on to them to make sure nobody else got them (no other manufacturer had the minivan then and they sold like hotcakes without any incentive - with incentives we pretty well had customers literally fighting over units).
Anyway, most of your special rates now on tractors are factory subsidized incentives. I would assume that most would offer zero percent interest or some rebate in lieu of the zero percent interest. Either way, it is basically a factory price reduction and not something done at the dealership level. Dealerships may try to hold out for more gross (profit) on units if they are selling particularly well, but that will always be the case with supply and demand. They have to make a profit to stay in business. I wouldn't want to buy from a dealer who wasn't making profit because he wouldn't be there in the future to serve me. I just ask that I am able to buy something at a fair profit, that's all. I'd assume most people would be pretty well the same.
