Brand new tractor...appraisal?

[KretZ]

Looking into buying an RK55, trying to go through a local credit union for a better interest rate (and to keep money local). My local CU makes loans for farm equipment regularly, but the system they use to determine the value of the tractor doesn’t have RK tractors in it. So they are telling me I need to have the brand new tractor appraised by someone other than the dealership I am buying it from. I am not sure how to go about this. The value of an item is based on what people will pay for it, thus it seems like the current value of a brand new item, would be the asking price that the company is charging so long as the company is selling them regularly and staying in business? Any ideas?

 

[Torvy]

This is from my background in auto finance, so it may not be 100% apples to apples...the bank doesn't care what an asset sells for new. Their concern is for what happens if they need to repo. What can they get for it once it is used? They also have to follow Generally Accepted Accounting Practices (GAAP). In other words, they have to be able to show a regulator that they did due diligence to assess the value of an asset on their balance sheet. Bank regulators, in my experience, know the regulations very well. They tend to know too little about the actual realities of life. Ergo, they are unlikely to have a clue what a tractor is worth or what an RK is compared to another brand. So, your bank, or CU in this case, is playing CYA. The bad part for you is that the value will likely be less than full price.

That being said, your best bet is to find an independent mechanic who works on farm equipment...even better if they also sell used ones. Not sure how likely that is in your area. You might be able to find another RK dealer to quote you on the same model. Ultimately, the CU wants to make the loan, so if you make a reasonable effort, they will likely take it.

 

[workinonit]

How much lower could the CU interest rate possibly be? Go buy a green or orange tractor and you won't have any interest.

 

[Torvy]

How much lower could the CU interest rate possibly be? Go buy a green or orange tractor and you won't have any interest.

That assumes excellent credit. OP also wanted to keep money local.

 

[LD1]

Sounds like a case where "keeping it local" is more hassle than its worth. IF they dont want your money, dont give it to them and find a lending institution with less hassle and BS

 

[CADplans]

That assumes excellent credit. OP also wanted to keep money local.

If you can get a better deal using "Greene" financing, rather than local,,
use the Deere financing, then donate $100 to the bank.

Really,, why loose $300 to help the local bank get $100,, ?

 

[IndyJay]

That assumes excellent credit. OP also wanted to keep money local.

Credit Unions are non-profit.

 

[RickB]

Credit Unions are non-profit.

CU employees work for real paychecks.

 

[IndyJay]

CU employees work for real paychecks.

True.

 

[fried1765]

How much lower could the CU interest rate possibly be? Go buy a green or orange tractor and you won't have any interest.

And .......the OP will have a higher quality, commonly known/respected brand, with much higher resale (or repo) value.
Unless the bank folks are totally incompetent, they will already know this!