Financing Fees w/JD 0% Financing?

[greenxblue]

Just as an update to my previous post, my JD 3520, MX5, and box blade were delivered last Friday. The dealer brought me a copy of my purchase order and the financing agreement. Everything looked fine until he asked me to sign the financing agreement. There were $170 worth of fees included for the 0% financing. $150 was for "origination fees", and $20 was "official fees". He told me that the "official fees" was a charge/tax from my state. I didn't mind too much because getting 0% financing is well worth $170. But it bothered me that he told me that there would be no fee for the 0% and then there was one when it was time to sign the paperwork.

I played on my tractor for more than 25 hours over the weekend though and I felt much better about the whole thing! LOVE IT!!

 

[PILOON]

I sold fork lifts a good while back.

Whenever we'd call the finance folks for rates, the first question was what commission or kickback rate we wanted to include.
A 'perk' went to the selling party (sometimes split between sales rep and house).

Mind you that practice may no longer exist.

 

[The Dougster]

Maybe I'm old fashioned and set in my ways but 0% financing suggests there will be no charge for it.. Personally, I wouldn't pay it... I suspect there are other dealers of other tractors out there that would love to sell a tractor...

 

[greenxblue]

I agree with you about the financing. Problem was, the financing paperwork wasn't available to me to sign until the tractor and attachments were delivered to my house. So, I test drove it, played with it a little, fell in love (still talking about the tractor ), and then was presented the financing paperwork which included the $170 in fees. After waiting for 3 weeks for it to be delivered and having chores around the house piling up, I caved in and signed.

 

[jenkinsph]

greenxblue,
Glad you finally have your new tractor, I'm sure you can find other places to buy implements.


Steve

 

[Ramairfreak98ss]

well maybe it is a 2% difference.. the dealer does pay for that 0% plan.

Most look at it this way.

Take the 0%, they give youa price, shouldn't be MORE because of it but you pay the price.

If its a cash deal, theyd probably knock off 2-4% more for not going through any finance avenues.

 

[vtcatrules]

The dealer either has to pay a fee or forgo some other promo to use the 0% financing. You should be able to negotiate a cheaper cash price if you don't want to finance. Sometimes there is a factory rebate or extended warranty instead. 2% of the purchase price is still less then if you had the cash and put it in a CD for 4 yrs. Equipment dealers and power sports dealers are always having to figure out what the cost of each promo is to them. I would rather have the dealer be upfront with me and let me know what my options are. Best possible price, finance, or extended waranties?

 

[MessickFarmEqu]

What your seeing here is that Deere is charging 2% dealer partisipation on the financing. When you use it, they take 2% out of the dealers pocket to pay for the program. Some companies do it, some do not.

We do this same thing on some products, for example... on Ferris mowers the partisipation fee can be as much has half our profit on a sale, so we always price the machines for a cash sale and pass along the cost. You almost have to do this when the manufacturers are advertising their financing programs, but passing some of the cost along to the dealer.

 

[JDCOMPACTMAN]

What your seeing here is that Deere is charging 2% dealer partisipation on the financing. When you use it, they take 2% out of the dealers pocket to pay for the program. Some companies do it, some do not.

We do this same thing on some products, for example... on Ferris mowers the partisipation fee can be as much has half our profit on a sale, so we always price the machines for a cash sale and pass along the cost. You almost have to do this when the manufacturers are advertising their financing programs, but passing some of the cost along to the dealer.

Does Kubota Or New Holland Charge The Dealer or Financing Programs?

 

[MessickFarmEqu]

Does Kubota Or New Holland Charge The Dealer or Financing Programs?

Typicaly no. There have been a few exceptions, but they are uncommon.

 

[Duffster]

Typicaly no. There have been a few exceptions, but they are uncommon.

How come they don't offer a rebate instead of a financing special for people with cash?

It has to cost the manufacturer something to let the buyer use the money.

 

[JDCOMPACTMAN]

Typicaly no. There have been a few exceptions, but they are uncommon.

Thanks for the reply. Just curious, is there dealer recourse on installment loans with Kubota Or New Holland?

 

[MessickFarmEqu]

Thanks for the reply. Just curious, is there dealer recourse on installment loans with Kubota Or New Holland?

We have a choice on recourse. Typicaly it lays with the financing company. We do have some obligations to REPO equipment and helpout if things go sour.

New Holland gives great cash rebates. Kubota does not, and we've been screaming for it for years. They say they like the continual contact with the customer though KCC. Its cost them some sales to NH in our dealership.

 

[greggh]

When I purchased my 5203 my dealer was up front about the 2%. The fee was on the amount financed not the price of the tractor. I paid the fee along with the down payment, it wasn't that large. I still saved about $1500 by going thru this dealer and he is super to work with.