Financing Best rates on used tractors?

[SonnieP]

Looking at about $40k on a 2021 model. The local dealer is 5.9% lowest rate for any term... local credit union is about the same. I don't have a banker per se because I don't borrow much. I financed my truck at 0% for 36 months and my wife's car at 1.9% in 2020 for 60 months. I may pay cash for it, but I would probably finance it if I could find a rate of around 3%. Is there any such animal around? Rates seem to be a bit high right now.

Thanks,
Sonnie

 

[ddbackhoe]

if you have cash another option may be…..from NFCU

Savings Secured Loan​

Secure financing without dipping into your savings, and at a lower rate.

Features:​

• Fully secured by your Navy Federal savings account
• Savings continue to earn dividends and become available to you as the loan is paid off
• Extended terms of 61 to 180 months available for certain loan purposes,3 subject to loan amount minimums4

Tiered Rates for the Savings Secured Loan

Terms	APR5
61 to 180 mos.	Share rate + 3.00%
Up to 60 mos.	Share rate + 2.00%

 

[SonnieP]

Yep... a friend I know at Max Credit Union was telling me about that option. I'd rather use someone else's money, but that is no doubt a viable option.

 

[rScotty]

if you have cash another option may be…..from NFCU

Savings Secured Loan​

Secure financing without dipping into your savings, and at a lower rate.

Features:​

• Fully secured by your Navy Federal savings account
• Savings continue to earn dividends and become available to you as the loan is paid off
• Extended terms of 61 to 180 months available for certain loan purposes,3 subject to loan amount minimums4

Tiered Rates for the Savings Secured Loan

Terms	APR5
61 to 180 mos.	Share rate + 3.00%
Up to 60 mos.	Share rate + 2.00%

What does "Share rate" mean? What does the NFCU pay on savings accounts?

 

[SonnieP]

What does "Share rate" mean? What does the NFCU pay on savings accounts?

That's what you pay to borrow your own money.

 

[ddbackhoe]

What does "Share rate" mean? What does the NFCU pay on savings accounts?

regular savings is rather abysmal @ 0.25 apy. If I understand correctly, the loan would then be 2.0 apy but as you pay it back, your payment money gets freed up.
I use them for short term cd’s, those rates are pretty good by today’s numbers.

https://www.navyfederal.org/rates.html

 

[AndyMA]

UFB Direct is paying 4.81% No minimum, No fees

 

[rScotty]

regular savings is rather abysmal @ 0.25 apy. If I understand correctly, the loan would then be 2.0 apy but as you pay it back, your payment money gets freed up.
I use them for short term cd’s, those rates are pretty good by today’s numbers.

https://www.navyfederal.org/rates.html

So by keeping their savings there in the NFCU a person would qualify for a 2% loan.

But by taking that same money and moving it to a different bank and taking out a one year CD in that new bank they could make 4.45% on their money....the downside to that being that since they are no longer borrowing against their own money, the NFCU loan for the tractor would be at 7.45% interest.

Basically by doing some paperwork, moving the money makes it still a 3% loan (7.45-4.45=3) , but the difference is by moving the savings into a CD at another bank it becomes "new money" there, and you now have control of your own savings in the CD. There is a penalty for early withdrawal, but at least the savings is no longer "hostage" for a loan.

Inflation is a whole other story. Who knows which way it will go? uh, probably up...but what matters today is that since inflation percentage is higher than either the loan interest or the CD interest - then what happens is that both the borrower and the lender are losing money by the amount of (inflation-3%).

I'd say move the money and take the full price loan. It comes out the same, but you have more control.

Actually, I'd first stop by the Kubota shop and see if that dealer is participating in their equine program and low percent loan program.
I like that you are looking at a used machine.
rScotty

 

[ddbackhoe]

I'd say move the money and take the full price loan. It comes out the same, but you have more control.

Actually, I'd first stop by the Kubota shop and see if that dealer is participating in their equine program and low percent loan program.
I like that you are looking at a used machine.
rScotty

Best bet, pay cash and be done with it. Pay yourself the monthly payment and replenish your account.

Last Kubota tractor I wanted to buy, you had to take KTAC for their financing which added something like 7k to the price tag.

 

[rScotty]

Best bet, pay cash and be done with it. Pay yourself the monthly payment and replenish your account.

Last Kubota tractor I wanted to buy, you had to take KTAC for their financing which added something like 7k to the price tag.

That's the way people used to do it. Pay cash or do without. And for us old folks it is ingrained to do things that way - so we did and still do. But part of the reasons that worked for us no longer apply. It's a different world now and it belongs to a different group. Frankly, we missed a lot because we felt that debt-free living was so important.

Kids now are unwilling to miss out on some of life's adventures even if it means debt for the other 95% of the time. I won't say they are wrong. Wish we had done some of that as well. For instance, we would have loved to go to college as a kids instead of as adults.

Of course don't be stupid. It is common for rural land & house insurance to also cover machinery used on the property. That was acceptable to Kubota; KTAC not required. Paying 7K for additional insurance is just the sort of scam one has to sort through and reject. Another thing that has changed with the generation is the professionalism with which sellers will gladly take your money if they can.

All that means is that rejecting the new generation of business & banking BS is a normal part of today's buying skills.
Study up & succeed.
rScotty