New Tractor Sales Are Declining

[5030]

Never say, "never". Our Kubota was purchased at zero percent, so the program did exist. I have no knowledge about what kind of deals that other people do.
rScotty

So was the balance I financed with KCC on the new round bailer. There are no incurred finance charges on the remaining balance.

 

[5030]

My Kubota loan in December 2021 was also at 0%. But I believe that the company makes up for these loans by requiring KTAC insurance on financed units.

Was not a requirement on the round bailer and candidly, never came up. All I was required to do was provide a dec sheet copy that showed I had it insured for replacement cist and no, I don't insure anything with Kubota.

 

[Milo]

A reason Japanese companies like Kubota have offered "0%" interest is because Japan has been experiencing deflation, so it costs them nothing. Plus as mentioned they make some off their insurance and probably nick the dealer a little when they sell at 0%. Even now with our 10+% inflation Japan is only maybe 3%. But 3% inflation is a lot more than deflation so I imagine we'll see it change to "low interest" rather than "no interest".

 

[rScotty]

My Kubota loan in December 2021 was also at 0%. But I believe that the company makes up for these loans by requiring KTAC insurance on financed units.

Mine didn't. But my loan was over a decade before yours. Did KTAC insurance exist then?

Our existing rural insurance probably covered our equipment. I checked that. The dealer simply accepted my word on that; no more was said & no proof was necessary.

After we both arrived at a final price on the sales contract I offered to pay cash if he would throw in a shop manual or $100.

He said cash vs financing made no difference to him. If he faxed the signed 0% finance contract to Kubota Corporate the full purchase price would be in his bank account faster than he could drive to the bank and deposit my check.

So we financed it. Set up automatic payments at the bank. Cash price divided into 60 payments. It made depreciation calculations easier and didn't cost a penny on my end.

The question remains: Did I pay for the financing in the negotiated price? Maybe.... there's no way to tell. All I can say is that I am an old school guy and an ex dealer (motorcycles) myself, I was satisfied with the cash price, and cash vs financing costs were equal.

And I don't think we can draw any general conclusions about Kubota and 0% just because it apparently worked in one instance a decade ago. All deals are different.

rScotty

 

[Cahaba Valley Farm]

The question remains: Did I pay for the financing in the negotiated price? Maybe.... there's no way to tell. All I can say is that I am an old school guy and an ex dealer (motorcycles) myself, I was satisfied with the cash price, and cash vs financing costs were equal.

Scotty, dealer cost on a tractor is 23% below MSRP. Kubota's Equestrian discount is 20% off for cash buyers. So if you take a dealer like mine who only knocked off $700 (Manufacturer rebate from Kubota) from the MSRP price then there is the profit for the dealer. In my case he was going to make about $5200 more in profit if I financed versus just $780 in profit if I took the cash discount and that was just the tractor, no extras. So if you do the math he was charging me around 4% a year to finance that tractor for 60 months. I could of gone to any bank or credit Union and financed for that.

I'm surprised that the FTC hasn't cracked down on this industry for doing this as this is in my opinion a form of predatory lending.

 

[2manyrocks]

Used car dealers put customers into high interest subprime loans all the time........

 

[BleedingOrange]

Yes they do, but even thou it is legal, doesn,t make it ethically correct.
Then again, if you are that hard up to agree to those high rates, then maybe, just maybe, you shouldn,t be buying a vehicle in the first place.

 

[Milo]

You're right people with poor credit shouldn't be buying because they'll naturally be charged high interest. But many go out on a limb regardless and purchase new tractors, trucks, SxS's, motorcycles, etc. anyway.

 

[Fixastuff]

If they won't sell it cheaper for cash then it is 0%

 

[ovrszd]

If they won't sell it cheaper for cash then it is 0%

Why would they sell it cheaper for cash? They know you are bluffing.