Current financing offer from RK is 6.49% for 84 months. Why isn’t RK trying to offer financing comparable to competitors? Kubota, Kioti, LS, Massie all are offering 0% for 84 months.
Simple answer to your question-
RK uses a credit union to do the financing. The credit union is a separate company. The credit union needs to make a profit. The credit union is charging their regular rates.
RK has only contracted with the credit union so the customers of their tractors (and mowers snd ATVs) have an easy way to begin the financing process.
RK looks at their profit on a tractor. The credit union looks at their profit on loans.
The other companies (plus the major car manufacturers) use an in-house financing company. They are captive to the manufacturer. So, the manufacturer looks at the combined profit of selling the tractor plus the loan. So, theoretically, all things equal, a customer taking a 0% interest loan pays a higher price for the tractor. A customer not taking a 0% interest loan pays a lower price for the tractor. That way, the manufacturer makes the same (present value) either way.
That is theory. In reality, many many many people look at big purchase items as “what is my monthly payment”? So, manufacturers who have their own finance company can offer 0% interest loans and still charge a premium for the tractor - while keeping the “monthly payment” in a sweet spot such that people feel they can afford to buy. It works great - and that is why the big boys push financing so heavily. That is why some big bots would rather you finance v. offering discounts for cash.
MoKelly