Purchase Dilemma

[MasseyWV]

Your on the right track with paying cash. I do not finance anything anymore. If I can't pay cash I can't afford it.

Well said.

 

[GaryCrowell]

My personal choice is to stick to all mainstream brands do to the fact that I trade tractors often enough that resale is an important issue to me. (Skip blasting me about Mahindra going the be #1 someday, I've heard it all before and I'm not knocking them except on resale)

I strongly agree with this. I suggest you go take a look at the Kubota's, especially in this size machine. I've purchased an off brand tractor before and got burned 15 years later when I couldn't find parts for it. Mahindra might be #1 some day and good for them if they are, I'll consider purchasing one of their products when that time comes. Right now they might make fine tractors but they're a second tier player with a substandard dealer network and parts support. A Mahindra would have to be priced considerably less than a comparable Kubota to warrant consideration in my opinion. A couple of grand isn't going to do, it would have to be much cheaper to make up for the risk you'll be assuming by buying from a company without a stable parts/dealer network. You mentioned Deere being priced too high, yet they sell a lot of tractors. The reason for this is they are established and reliable. If your machine breaks down (they all break sooner or later) Deere will have you up and running in a very short time, guaranteed. Caterpillar is the same in construction equipment, their machines are priced high but you get reliability and if it breaks it WILL be fixed quickly. This is critical for farmers and other commercial operators who must have their machinery running when the job is there. You've already stated that you don't trust the Mahindra dealership and their credit dept. has jerked you around. I'd be done with them already. In my opinion there's really no good reason to go outside of John Deere, Kubota, Massey Ferguson, or Case/New Holland when purchasing a tractor. These are the first tier companies and what sets them apart from the others are their vast dealer and parts networks. If you need something for one of their tractors it's most likely in a warehouse within 200 miles of you and can be there within 24 hours. Need something for a Mahindra, Kioti, or Branson? Good luck. Stick with the first tier brands, you'll be glad you did in the long run.

 

[chh]

As part of the "sales" game check the price of the tractor if financed and for cash. You might be suprised how much more the financed price is than the cash price. Many times 0% isn't free. The last tractor I purchased, a MF 596, the difference was $1500 between cash and low interest financing.

 

[IslandTractor]

. In my opinion there's really no good reason to go outside of John Deere, Kubota, Massey Ferguson, or Case/New Holland when purchasing a tractor. These are the first tier companies and what sets them apart from the others are their vast dealer and parts networks. If you need something for one of their tractors it's most likely in a warehouse within 200 miles of you and can be there within 24 hours. Need something for a Mahindra, Kioti, or Branson? Good luck. Stick with the first tier brands, you'll be glad you did in the long run.

Here is one good reason: $$$$$. I could have paid $5000-7000 more for the same functionality on a 40hp tractor by buying JD or Kubota instead of Kioti. That's at least one very good reason. You can buy the JD/Kubota or get a Kioti/Mahindra and for the same total outlay have a tractor, a mower or two, a grapple and a couple of other implements that will help you get your work done a lot more efficiently.

Another: Kioti and Mahindra are actually doing better than at least MF in the CUT dept. How long will MF bother to carry CUTs and their parts if Kioti and Mahindra win their business. JD and NH are not going to go away but they are dependent on other companies for the parts to almost all their CUTs so I would not say that is the most reliable parts chain system in the world. Kubota has an advantage in this department over all others I agree.

Another: With UPS virtually any tractor part anywhere in the country can be at your doorstep in a couple of days. Kioti and Mahindra are pretty well established today just like Subaru, Hyundai, Nissan etc. Buying from Ford or GM is no guarranty that the part will be any more available today or tomorrow.

Another: Kioti has a 4 year warranty. Who else does? Not JD, Not Kubota, Not NH. That is worth something extra and should be part of the equation for almost any buyer.

Another: You certainly have to pick who you think will do well but I for one would choose a Hyundai car over a GM or Ford these days for value. Point being that new comers to the market do not all fail and one can distinguish between cheapo imports like a Belarus, Yugo and some current Chinese tractors imported by marketing firms versus a newish entry into the market by a quality well organized company. Mahindra ain't gonna disappear. I'm happy with Kioti in that regard too. I agree you need to pick and choose when straying from the big three but it's possible to pick up and coming companies without significant risk. Honda, Toyota etc were once fringe companies in the US too.

JD and Kubota (maybe NH too) deserve their big market shares because they put out fine premium price products. They also charge a lot and have therefore created a viable market for other companies to come in as value brands. A well organized value brand company can do very well in the US market as Costco, Walmart etc have shown us while established "big three" brands like Macy's, Sears and other traditonal retailers sometimes have fared poorly.

So, I certainly respect the products of the big three but I think it is simplistic to just tell people to stay away from anything else. We'd all still be driving Chevy Novas and Ford Pintos, maybe even AMC Gremlins, if that was the case in the auto industry. Competition from the value brands gives people a viable alternative and if you have the confidence to pick and choose you can save a bundle.

 

[ChuckinNH]

I have recommended both Kioti, and Mahindra tractors to some users in some applications. In the smaller sizes, they have strong loaders, and backhoes available, and I will agree that one can buy either as a TLB setup somewhat cheaper than an equivalant Kubota. As pulling tractors, both are good too, and I am happy to suggest them for creating landscaping, etc. If you want other things like front mounted implements, mid mount implements, or even backhoes that mount very easily, and take little storage space, the Kubota will win, and the JD / NH will come very close. For all around use for the average landowner, these things can be important, and I still favor the Kubota in particular for those considerations. In my area, there is no price advantage for either when pricing just tractor / fel combinations. Kioti just decided to drop the mmm they offered, so good luck if you have a tractor already and were thinking about one for example. Mahindra offers one, but most dealers admit that it isn't something you want to R/R very often. All are very good tractors, but are but another example why it is important to understand what you are trying to accomplish, and what your needs are actually going to be.

 

[Negligence]

The way I see it is simple. If Agricredit (or any other lending institution) doesn't think I am trustworthy enough to pay them back, I am quite happy to pay cash and pay myself the interest that I would have been paying to them. In fact, before I got the "itch" to buy a tractor, I had always insisted on paying cash for everything.

But with 0% interest on terms of three to four years, by paying cash you can actually lose money.

If you do a pure cash deal, you lose out on the interest the bank/market would have paid you for your money. And you gain nothing from the tractor company offering to lend you money interest-free.

Let's say you do 0% financing for four years on a $30,000 tractor. Here's why it's worse to do a cash deal:

- You immediately lose access to $30k of cash today
- Because you've lost that cash, you can't earn an interest on that $30k cash. You could have kept that $30k in the bank for the four years, using it to make payments. Every month you would earn interest on it
- The company doesn't lend you $30k, interest-free (you can't get that kind of a deal anywhere).

Sure, it's nice to say the tractor is yours, but the interest you can earn over four years will help offset the depreciation cost of the tractor if you bought with cash. Just a thought!

 

[MasseyWV]

Sure, it's nice to say the tractor is yours, but the interest you can earn over four years will help offset the depreciation cost of the tractor if you bought with cash. Just a thought!

Saying the tractor is mine is the only reason I need to pay cash and any interest I earned on that money would be offset by the interest I had to pay to the financing company unless I invested the money in high-risk accounts which could mean that I would lose all the money plus have to pay interest.

Depreciation is not a concern for me because I plan to keep the tractor I purchase for a very long time. Durability and long-term parts availability are my biggest concerns aside from the initial cost.

0% interest is just a gimmick to get people to go to the dealerships. Not many people have good enough credit to qualify for 0% interest and the lenders know it.

 

[Negligence]

I can't speak for the other brands, but I believe both Case and Kubota will finance you, somewhat regardless of credit, if you give them a larger down payment. At least in Canada. The idea there is you put your application through at 10% down, 15% , then 20% down, etc., until you get approved.

Either way you look at it, the 0% financing is better than a cash deal unless you sleep on top of piles of money surrounded by beautiful ladies. You did say it would eat into the security of your savings, and to me that's a stoplight. I wouldn't run from financing just because you got denied. Offer a larger down payment and try again, or try another manufacturer.

 

[bandit67]

I agree with taking advantage of the financing if it is offered - Negligence makes some excellent points. Also, not all manufacturers give different pricing for cash vs. financing.

As for the lesser known brands, it's a crap shoot. Kioti has been in this country for at least 20 years, but they still have a rather poor market share in this country. They've got some great features. But they aren't built with heavier materials strictly in the interest of being good at ground engaging work, it's because it's cheaper than going with higher quality, stronger, lighter metals. They have to offer a 4 year warranty - not because they believe in their product more than the other manufacturers do, but because they are trying to increase market share.

None of these smaller market share companies can be compared to Kubota. For example, when folks say remember when Kubota started out - look what they've done. Kubota is where it is today because it broke into a market with a niche product and basically made the small compact market what it is today. And along the way, corporate invested in dealerships across the country to grow their market share. Kioti certainly doesn't seem to have done that, as there are still areas of the country that you find only a scattering of dealers that price the Kioti's at or above the better established competition.

Mahindra is another company that hasn't invested in establishing it's market share. There are states with not even ONE Mahindra dealer. Mahindra, Kioti, and the other 'lesser known' brands aren't creating a market where there existed none or very little before, but are simply trying to 'get in on' an established market, and there lies the reason that most of those companies will never have a huge market share.

And if there are folks in some parts of the country getting great deals on the lesser known brands, then when other folks are finding significantly higher prices for the same machines, then someone is getting ripped off. You can't tell me it costs Kioti, for example, an additional $5k per machine to send a trailer load across the country.

Out here in the west, you'd expect to see only JD, CNH, Massey. But there are tons of Kubotas because they've done a great job marketing and selling quality machines. I just don't see Mahindra, Kioti, or many of the other lesser known brands putting forth the effort needed to significantly grow their market share throughout the entire country. Kubota's been in the US for what, 15 years longer than Kioti?

If there is going to be an up-and-coming market leader in the tractor world in the future, I think that company will need to establish a new niche to take the market by storm. For those that also mention what Toyota's done, well, they pretty much created a niche too, and it was rough going for a lot of years, but now look at where they are. You can't break into an established market with the same-ole-same-ole, and expect to make a significant impact. You also can't act like you don't need all the customers that come through the door, and turn away someone who is ready to buy without even trying, like in wvtechs case.

 

[MasseyWV]

Either way you look at it, the 0% financing is better than a cash deal unless you sleep on top of piles of money surrounded by beautiful ladies. You did say it would eat into the security of your savings, and to me that's a stoplight. I wouldn't run from financing just because you got denied. Offer a larger down payment and try again, or try another manufacturer.

I still believe that cash is better than financing, even at 0%.

It would eat into the security of my savings if I bought it and paid cash now but in a few months things will be different.

 

[AchingBack]

Around Father's Day of 2005, I bought a brand new Mahindra 2615 HST, financed through Agricredit Acceptance LLC. The purchase price was, $14,995. My down payment was $1,399.00. At 0% interest, my monthly payment was $390.90 for 36 months. In addition, there was an administration fee of $239.68, and $226.00 for physical damage insurance. I believe the administration fee is charged in case of default it gives them some money for recovery cost to pick up the unit, return to dealer, etc.. In addition, I paid a $10.00 filing fee. It took a couple of days to get the approval, and I was quite happy because my income at the time was barely $800.00 per month from social security. However, I had a good credit score, and evidently that was what mattered; thank God.

Had I not loaned several thousand dollars to my brother, I would have had
enough money to pay cash, and receive $400 off the price, in lieu of financing. Now, my brother has repaid the loan, and says he will be giving me some interest on the loan when he has it. If it happens, I think I will use it to buy some precious metal.


For now, my paid for precious metal is sitting proudly in the tractor shed, and I couldn't be happier.

 

[MasseyWV]

there was an administration fee of $239.68

I was not aware that there would have been an "administration fee" and believe that is their way of making money on a 0% interest loan. I knew there had to have been a catch somewhere.

Just another reason for me to pay cash when I decide to purchase.

 

[CurlyDave]

I bought my tractor with 0% financing, even though I had the cash available to buy it. The machine was ~$40k, and the payments were around $1600-$1700 per month.

Now I can tell you from experience that at the mid-point of this loan I had over $30 k in the bank, and payments of ~$1650/month. My credit score would have been higher if I had no payments and $10 k in the bank.

I have no idea why this is the case, but it is.

Fortunately, I had no need to borrow money until I paid off the tractor, but depending on your situation you may be better off paying cash and keeping your credit score higher. For instance, if you are looking at the possibility of a new mortgage.

 

[ChuckinNH]

Perhaps the credit rating is based on the ratio of "discretionary" debt in this case. I know banks didn't like to see that back when I was buying homes. The same thing can happen if you have too many credit cards...... even if you haven't used them.

 

[AchingBack]

I was not aware that there would have been an "administration fee" and believe that is their way of making money on a 0% interest loan. I knew there had to have been a catch somewhere.

Just another reason for me to pay cash when I decide to purchase.

Whether on not it is a catch depends on how you look at it. If you know up front, and sign on the dotted line, it is a good catch. Would a person rather finance at 0 % interest, or at , 5.9% which is a pretty common rate.

In your perfect world, you would go to the Mahindra website, buy the tractor for at least 20% under what a dealer would charge, expect free shipping, extended warranty, and a gift bag. After that, if you had a problem with the tractor, you would gripe because there was no dealer nearby to check your oil.

 

[MasseyWV]

Whether on not it is a catch depends on how you look at it. If you know up front, and sign on the dotted line, it is a good catch. Would a person rather finance at 0 % interest, or at , 5.9% which is a pretty common rate.

In your perfect world, you would go to the Mahindra website, buy the tractor for at least 20% under what a dealer would charge, expect free shipping, extended warranty, and a gift bag. After that, if you had a problem with the tractor, you would gripe because there was no dealer nearby to check your oil.

Being a catch means that they do not tell you about the extra fees until just before you sign on the dotted line. They are hoping that by that time, you have fell in love with a tractor after having gone through so much trouble to get to that point and are more likely to overlook it as being no big deal and complete the sale.

From some of the information (and actual quotes) I have gathered while doing my homework, I would suspect that "20% under what a dealer would charge" would be a very conservative estimate.

In my perfect world I would...

1. Buy direct from the manufacturer (at a reasonable cost).
2. Have several shipping options to choose from (at a reasonable cost).
3. Have a standard warranty.
4. Get a free hat.
5. Check my own oil.

If a warranty issue were to arise, I am more than capable of doing ANY repairs or maintenance that needed to be performed and would only request that any needed parts that were covered under warranty, be shipped to me by the manufacturer.

Back to reality...

I am well aware that unless I decide to buy a used tractor, that I am forced to negotiate with several dealers to get the best price possible then I will have to do business with one of those dealers to get my new tractor.

I am no stranger to business and have no problem with a dealership making a reasonable profit in exchange for the benefit of getting useful information, the ability to physically see and test-drive the tractor to be certain it is the one I want, warranty service, parts, etc... I mentioned parts but will add that the "dealership" is the last place I will look for parts because they are always much more expensive than the alternatives.

It is not the "dealer" that I have a problem with, it is the fact that it is so hard to get a consistent (or reasonable) price right off the bat and to make matters worse (in the case of Mahindra), the MSRP is apparantly a state secret.

I still think that "salesmen" are bottom-feeders but that is just my opinion.

 

[AchingBack]

Not everyone is a wrench turner, thus we have mechanics. Not everyone can transport their tractor for service, thus, someone must come and get it. These people come from dealerships. Dealers would not exist if not for customers, would they?

I think anyone who is in a frame of mind that salesmen are bottom feeders, probably cuts their own hair because barbers charge too much.

I've been in sales most of my life. It always amazes me when someone thinks we should put in 40 - 60 hours a week for nothing.

How about some cheese with your whine?

 

[MasseyWV]

Not everyone is a wrench turner, thus we have mechanics. Not everyone can transport their tractor for service, thus, someone must come and get it. These people come from dealerships. Dealers would not exist if not for customers, would they?

I think anyone who is in a frame of mind that salesmen are bottom feeders, probably cuts their own hair because barbers charge too much.

I've been in sales most of my life. It always amazes me when someone thinks we should put in 40 - 60 hours a week for nothing.

How about some cheese with your whine?

I am sure that there are exceptions to the rule but in my experience, conducting business with any sort of "dealership" or "salesman" has been an overwhelmingly bad experience.

I agree that "dealerships" exist for a reason and that "salesmen" serve a purpose but still think that buying direct should be an alternative option for those of us who just don't like to go through the hassle.

 

[AchingBack]

It will only happen in Utopia. If we had it your way, there might be a few "wrench turners" able to do whatever "wrench turners" do. But someday, one of those wrench turners gets in over their head, and the next thing you know, in order to save face, they are bad mouthing their crappy brand of tractor.

Tractor manufacturers know and understand this fact. It would be hard to imagine how they could exist without a dealer network to professionally service their equipment.

However, if I were the manufacturer, I would make an exception just for people who live in Utopia, but only if they had proof of residence. Period, end of report.

 

[MasseyWV]

It will only happen in Utopia. If we had it your way, there might be a few "wrench turners" able to do whatever "wrench turners" do. But someday, one of those wrench turners gets in over their head, and the next thing you know, in order to save face, they are bad mouthing their crappy brand of tractor.

Tractor manufacturers know and understand this fact. It would be hard to imagine how they could exist without a dealer network to professionally service their equipment.

However, if I were the manufacturer, I would make an exception just for people who live in Utopia, but only if they had proof of residence. Period, end of report.

I never said the world was a perfect place but with the advent of the internet and changes in the overall marketplace, a lot of things have changed that people said would never happen. Manufacturers know and understand this and change accordingly. Take this forum (and others) for example: I have little doubt that manufacturers routinely read posts to get an idea of user opinions, market trends, etc... I would if I were them.

I have yet to get in over my head but as to other "wrench turners", they can speak for themselves. As to the quality (or lack thereof) of a product, I only speak the truth in regard to actual experiences and let people judge for themselves. It is the consensus of opinions that determines an overall portrait of the quality of a product.

As to dealers "professionally servicing" equipment, it is sometimes a crap shoot at best which is precisely why I prefer to service my own equipment. Granted, some dealers may provide top-notch service, but I would rather do it myself to be certain it is done right.

If I were a manufacturer, I would be more concerned with proof of purchase as opposed to proof of residence.

Let's agree that we disagree and leave it at that.