Financing confused about kubota financing

[Ed_C]

Thanks Talon

You and I see eye to eye on this and I don't understand the agressiveness of the previous poster. I simply wanted to know how much insurance cost. I didn't know that was a Taboo subject here. Not like we were posting photos of the 2008 Kubotas or anything ;-)

But like you. If I can't afford to buy it outright, I don't. And I'd self insure as my tractor has little risk of theft and little risk of fire. Not sure if those policies insure collision.

Some posters ASSume everyone gets a regular paycheck each week and can afford to commit to 3 years worth of monthly payments. I can't predict at all what my income will be in Sep '08 and Sep '09. I don't even try.

Investing the difference sounds great, and works most of the time, but unless I am investing in CD's, As I found out on Sep 11, 2001, i may not be unable to unwind a formerly profitable investment when I need to for a profit (or as on Sep 12--AT ALL)

I lost a ton of money (for me anyways) in the aftermath of Sep 11. I am thankful it was ONLY money. But I did learn the lesson that liquidity is king. I still invest in stocks, real estate, etc, but I avoid debt whenever possible.

Regardless of the relative value of 0% financing, I can go half a year without making a penny in income. ZERO! It';s the nature of my business. Keeping my monthly nut in check is key to me. Mortgages get paid off as soon as possible. Cars are bought with cash. It allows me to sleep well knowing I'll always have a car to drive and a house to live in if I go 6 months with no income.

For my situation debt and other monthly obligations are deadly and to be avoided at all costs. But I don't presume to speak for the rest of the world. Only me.

The post is long winded, and not meant as an attack on anybody. Just explaining why an otherwise rational person might make the "irrational" choice to avoid 0% financing.

to me, it has little value. but that's just ME

 

[MarkV]

Another thing to watch for is some dealers charge a processing fee with the Kubota financing offer. As I understand it this is not a Kubota fee but one the individual dealership adds on.

MarkV

 

[LBrown59]

Another thing to watch for is some dealers charge a processing fee with the Kubota financing offer. As I understand it this is not a Kubota fee but one the individual dealership adds on.

MarkV

Those are the dealers to avoid.
Wouldn't doubt they charge the fee even if you obtained your own financing.
Pricessing feees are a scam - The paper work has to be done or the dealer can't make the sale.

 

[dieselmadman]

Ed C,

Whatever makes you sleep at night is the right thing to do for you. However, every argument you presented as reasons for not financing at 0% are the exact same reasons you should. Every investor/business entrepreneur live by the motto, "Other people's money"...

 

[66gladiator]

Kubota's Property damage program covers more than most homeowners (upset & collision) and is usually cheaper, especially considering deductables.
https://www.personal-plans.com/kubota

0% is not for everybody, that is why you can find plans out to 84 months and you can tailor your payment schedule to meet your income schedule (skips, semi-annual, annual, quarterly, etc.)
Don't forget the revolving programs, like 180 same as cash.

 

[hill]

I thought that the Kubota required insurance on a financed tractor is only loan gaurantee insurance that pays Kubota off in the case of a buyer becoming unable to pay for any reason.

That the insurance won't repair the tractor, won't replace it if stolen or burnt or because of any other reason for loss, it only assures Kubota that they will be paid for the tractor, come what may.

 

[TalonDancer]

I thought that the Kubota required insurance on a financed tractor is only loan gaurantee insurance that pays Kubota off in the case of a buyer becoming unable to pay for any reason.

That the insurance won't repair the tractor, won't replace it if stolen or burnt or because of any other reason for loss, it only assures Kubota that they will be paid for the tractor, come what may.

Just the opposite. Follow the link in the previous post for what the Kubota Insurance covers.

Essentially it is full comprehensive insurance that "guarantees" that you will have the money (less deductible) to FIX the tractor so that if you default on your loan, Kubota doesn't repossess a damaged tractor.

Talon Dancer

 

[JoeG]

Hill, unless the policy wording has changed you are correct. Talon, I don't see the phrase "comprehensive" anywhere on the page you reference. Please don't mistake this coverage for automobie comprehensive coverage.

I called Chubb a few months ago about this and is essentially "collateral" insurance. You have a personal loan with Kubota and the tractor is collateral. If you borrow 15k over 36 months and lose the tractor after 18 months this policy will pay Kubota $7500-$250 (deductibe). There is no protection for your part "ownership" in the tractor, assuming that it is worth more than $7500 (it is.)

You cannot find anything in their marketing about how they will value the tractor over time because it is valued at what you owe.

Again, unless they changed this, it is not a good deal for a tractor owner. I'd look for a good personal property or inland marine policy.

Thanks,

Joe

 

[TalonDancer]

....Talon, I don't see the phrase "comprehensive" anywhere on the page you reference. Please don't mistake this coverage for automobie comprehensive coverage.

I called Chubb a few months ago about this and is essentially "collateral" insurance. You have a personal loan with Kubota and the tractor is collateral. If you borrow 15k over 36 months and lose the tractor after 18 months this policy will pay Kubota $7500-$250 (deductibe). There is no protection for your part "ownership" in the tractor, assuming that it is worth more than $7500 (it is.)

You cannot find anything in their marketing about how they will value the tractor over time because it is valued at what you owe....

it took me awhile to find the Certificate of Insurance in my stratigraphic file system After reading it carefully and calling the Insurance company (Ohio Indemnity Co.) for clarification... it appears that we are both partially correct.

The policy is a "Collateral Physical Damage Installment Sales Policy. The insured party is Kubota Credit Corp. The Maximum Coverage is the Total Retail Selling Price of the listed items, which in my case includes the tractor, and both Kubota & 3rd party implements.

The key clause reads..."
4. LIMIT OF LIABILITY - SETTLEMENT OPTIONS
A. Our liability shall not exceed the lesser of the following amounts after deduction of any compensation for the loss paid by a third party and less the deductible appearing on the certificate of insurance:
(1) The cost of repairing or replacing the damaged or stolen collateral with like kind and quality; or
(2) The Actual Cash Value of the Collateral less salvage value; or
(3) The Maximum Limit Per Collateral Item listed on the certificate of insurance for any loss occurrence involving two or more collateral items, less salvage value.
B. At our option we may pay for the loss in money or may repair or replace the damaged or stolen collateral..."

Where "13. "Actual Cash Value" means the replacement cost of the collateral less depreciation or bettement...."

I asked the insurance rep. what would happen if 2yrs into my 3yr loan/policy, my tractor was "totaled" due to fire or theft, etc. He said that since Kubotas retain high resale value, the Actual Cash Value at that time would probably be higher than the amount I still owed. So Kubota would get paid their interest (the total of the remaining payments) and I would get the remainder up to the Actual Cash Value less deductible.

So yes it is "collateral" insurance, and Kubota gets their money first. But it also acts like a "comprehensive" policy for me.

Talon Dancer

ps I was very impressed with Ohio Indemnity. A real person answered the phone in less than 3 rings. I was so shocked, I though I had dialed the wrong number. And then she quickly transfered me to a very helpful rep who also answered in 3 rings and answered all my questions without putting me on hold, etc

 

[JoeG]

Talon,

That sounds like a very good policy. But it doesn't sound like a kubota policy as the one they sell is written by Chubb (see Gladiators link above.) Maybe your dealer steers his customers to Ohio Casualty?

Joe

 

[66gladiator]

Technically it is Marsh Affinity Group and is underwritten by Chubb currently, but previously was Ohio Indemnity, same type of coverage though.
But why do you think that KTAC requires insurance on collateral? Of course it is too insue that their interest is covered, but as Talon points out, you usually reap some benefit if a claim is made, plus it protects you from having to immediately pay off the loan should a claim occur.
Regardless, if you use your homeowners KTAC is the loss payee, not the homeowner and the deductable is usually much higher!!

 

[TalonDancer]

...if you use your homeowners KTAC is the loss payee, not the homeowner and the deductable is usually much higher!!

Exactly. The credit agreement requires you to make Kubota Credit Corp the primarly payee for any claims on the financed tractor regardless of who does the insuring. And our homeowner's insurance deductible is very high since we are only insuring against significant losses.

FWIW Most homeowner's insurance anciliary coverage limits are based on a % the value of HOUSE. This is probably not an issue for people with full scale houses. But people like us, who are living in a very modest cabin, which will eventually become the guest quaters (i.e. land rich and house poor), need to verify that their homeowner's insurance will cover the tractor being used to build the "big house"

Talon Dancer

 

[JoeG]

Gladiator,

I'm not sure I understand what your point is? Marsh is a broker; they market the product, they have a relationship with Kubota, they owe nothing to the customer (insured, you.)

I love insurance; I buy as much as I can (Auto, Home, Umbrella, Life)! Today's markets are creating some of the best prices in history. But the key to this is transparency and the ability to compare products apples to apples. Additionally I have worked in the insurance industry (IT/Systems) for much of my career and know many of the in's and out's of programs like the Kubota one. They are not known for their value or transparency. You would be surprised how far down the line (and how much!) commission is paid out on these products (or maybe you wouldn't?)!

First and foremost I buy insurance to protect ME. If it also protects Kubota well that's good too. So I want the best product and value that I can afford. Unfortunately for us consumers, this Kubota coverage is marketed alot like GAP insurance pushed when buying a new car (which by the way is a big market for Ohio Casualty.) You have to have it before you can leave with the car and we have the one and only policy that will meet this requirement! It's easy, just sign here. Oh by the way, we'll roll the cost into the loan for you, as a courtesy, wink, wink.

But in general this is an easy sell because, let's face it, claims are alow frequency. This is not a niche line. It is Property 101. Insure a stated value, assign a deductible and pay the premium. You should be able to get multiple quotes very quickly from your local agent. What's this "market value" notion? Who determines "market value"?

I never said the product marketed by Kubota is bad I'm just suggesting that there may be better/cheaper options out there. And I don't think that a true comparison of other comparable products is forthcoming.

If Kubotas product is so good they why don't they offer it after the loan is paid or to cash buyers?

I'm glad to hear that Talon is happy with his coverage. In the event of a claim I hope that he remains satisfied.

There has been alot of good discovery of the Kubota sponsored policy in this forum but it is still one sided. Let's hear some alternative to this policy that may (or may not) offer better coverage.

Just my .02

 

[TalonDancer]

....There has been alot of good discovery of the Kubota sponsored policy in this forum but it is still one sided. Let's hear some alternative to this policy that may (or may not) offer better coverage....

What I would like to hear is the results of claims on tractors with any/all sources of insurance: Kubota sponsored and ANY/ALL others.

Talon Dancer

 

[66gladiator]

If Kubotas product is so good they why don't they offer it after the loan is paid or to cash buyers?

Patience Grasshopper,
Insurance options and extended warranties coming soon (2008) to a Kubota dealer near you!

Joe,
I never intended to argue Insurance with you. (I am not a big fan of mandated insurance by any means)

With my customers, KTAC insurance is included in roughly half of our contracts. And KTAC just announced that there will be no finance charges on KTAC insurance included in contracts.

BTW, Kubota usually relies on the Iron Solutions Official Guide (endorsed by the NAEDA) which is released quarterly by region.

So if you can find a comparable plan coverage wise with a $250 deductable for $25 a month or less, by all means go with it.