Kubota - Does 0% financing mean they have high markup

[art]

I currently sell three brands of tractors and they are all about the same on the mark-up.

Or I could say five! We've sold more brands then now but we are comfortable with what we have.

Some take more to assemble and add on the options, some charge more for freight. Over all the greater or higher priced ones that we get into often just touch more suppliers to get to me. That does not mean they are better and in some cases they just don't hold a candle.

They still sell, right color, right fit, ,right make, right financing programs for the more perfect payment.

 

[crazyal]

I paid cash because Kubota offers a $1000 discount above and beyond any price you work out. Once I figured in that an insurance to meet Kubota's requirements, about $1500 and a few other odd costs it was close to a wash. But I also don't have a payment. Of course I also lease the tractor to my business and in my case paying outright also made sense.

 

[Skyco]

I don't really care what Kubota's mark up or profit is.
I shopped 3 dealers, fortunately got the local one to match the best price and took the 3 yr 0% financing. Cash made no difference to the dealers I talked to.
Knew what I wanted and what they go for, so I got it. :thumbsup:

 

[montelatici]

Actually, Kubota is Japanese and money in Japan has cost nothing or less than nothing for years, given their deflationary economy. Kubota can get money at zero or near zero interest and offer it to customers.

The discount a Kubota dealer will give (after his best negotiated price, not based on MSRP) is minimal and does not begin to cover the zero interest benefit.

Anyone that doesn't take advantage of Kubota's zero interest offers is just financing better discounts for those of us that take the zero interest deal.

 

[rjkobbeman]

I see some folks expressing delight by paying cash because they "have no payment". I know other people that think the same way.

But my question to you is, if you have the cash to pay for it outright, is there a difference between paying for it in cash or putting the cash in a savings account and making your 0% payments out of that account? There never should be a worry to "make your payment" because you have the cash to cover it. In the mean time you are earning interest on your money.

I understand someone not wanting to take out a loan because they don't have the cash flow to cover the payment... or worry about future cash flows (possible job instability). But if you already have the money, you would never miss a payment right? It isn't like you are scraping up money every month to make your payment.

 

[montelatici]

But my question to you is, if you have the cash to pay for it outright, is there a difference between paying for it in cash or putting the cash in a savings account and making your 0% payments out of that account? .

I guess if you put your money in a savings account you may have a point. But many people invest in other types of investment vehicles that earn far more than 0%. Some CDs are earning 2-3%. At 2.5% is $2,500 in 5 years. I have been getting over 10% a year in somewhat more risky (but not crazy risky) stocks and ETFs. Taking 20K out to pay for a tractor would lose me $4,500 over 5 years at even 7.5% a year earnings. It made no sense to me to get $1,000 discount as opposed to zero interest.

 

[Agrantina]

Yes and YES again. My wife asked how much I was going to put down on mine. I said nothing.... Why she asked and said you had been saving some run away money so why not use it... Simple---0% is zero.. I can pay 2 yrs of payments on what I could have put down-- for what? lower note-- if that is what you are worried about then you should not be finacing a tractor if a 100.00 more note is going to break you. IMO.. Car companies offer 0% or 3k or 4k off--- Kubota dealers I spoke to were only 1k more.. BUT the one I bought was $500 cheaper than other dealers so I beleive its the deal you can strike that makes the 0% the way to GO.

AndyG

 

[LBrown59]

I don't really care what Kubota's mark up or profit is.
I shopped 3 dealers, fortunately got the local one to match the best price and took the 3 yr 0% financing. Cash made no difference to the dealers I talked to.
Knew what I wanted and what they go for, so I got it. :thumbsup:

I have bought 2 new Kubotas .
The cash price and the 0 percent price was the same on both of them so the o % was a no brainer.

 

[MarkV]

I have bought 2 new Kubotas .
The cash price and the 0 percent price was the same on both of them so the o % was a no brainer.

Same here LB. Now this was 4 years ago so things may be different. I never heard of a 1k discount for cash then and when I was dealing the price was the same for cash or 0% financing. I put the money in a CD to earn the interest and paid on time for 3 years. Seemed like the logical thing to do.

MarkV

 

[LBrown59]

Same here LB. Now this was 4 years ago so things may be different. I never heard of a 1k discount for cash then and when I was dealing the price was the same for cash or 0% financing.
I put the money in a CD to earn the interest and paid on time for 3 years. Seemed like the logical thing to do.

MarkV

Most people don't consider the time value of money when comparing the difference in the cost of things.