Interest Free Financing

[mx842]

In 2014 when I bought a Kubota 23 hp mower, I was offered free interest for five years, but I had to buy their insurance at 800 dollars per year times 5 years which would be 4000 dollars. I paid cash! My State Farm policy already covered it.

I too had to buy their insurance, but I don't think it was that much. It seems to me it was around $2500.00 for the 5 years. Shortly after I got my tractor, I had problems with the quick hitch and also discovered some scratches on my hood. The insurance put everything back like new and the bill was right at $7000.00 for what they did. That insurance is a good thing because what warranty doesn't cover, they pick up.

 

[mx842]

When I bought a Kubota a month or so ago I got a $3500 discount for cash instead of the 0% interest. It's hard to call a $3500 upcharge "zero interest". Car dealers are the opposite - they practically beg you to get a loan and offer $500 or more off it you finance.

Yes, they do because when they sell the loan they will make more off selling the loan than they make off the car/truck sale.

 

[Will_C]

I bought a Kubota in 2009. I was quoted the same price for cash or 0% financing. The same for my RTV in 2013. When I bought my L3560 in 2018, it was 0% or a $700 rebate. As I was only planning to finance $14,000, I paid cash.
I see now that Kubota offers 0% or a hefty discount for cash.

 

[WaffleDespair]

Marketing gimmick. You still pay interest, it is rolled into your final price. Hence the cash discount if you don't go the 0% route, they subtract the interest from the final price. Usually 0% financing allows people who cannot make a large down payment or pay cash for something to buy on credit. But sometimes the cash discount is so small that 0% makes better financial sense. When I bought our Kubota RTV-X I had the option of $300 cash discount or 0% for 48 months. The $15,000 I would have paid for the cash discount makes me $600/yr in interest, so I opted for the 0% financing and left my money in the bank. I don't mind using other people's money if it makes me money.

Yeah, I look at it the same way. If the cash discount is small, I’d rather take the 0% financing and keep my money working for me. In some cases you actually come out ahead that way, so it really just comes down to doing the math.

 

[Shawn T. W.]

I'm kind of the opposite ... I'd rather not have the payment, I can save other money to "invest" ...

Debt free is a great feeling, which I enjoy!

 

[CloverKnollFarms]

I'm kind of the opposite ... I'd rather not have the payment, I can save other money to "invest" ...

Debt free is a great feeling, which I enjoy!

Amen