TYM T474 vs John Deere 4044M

[arrow]

0% on my MF meant the same length loan but lower payments. As I plan on keeping this tractor past the end of the loan(forever?), 0% made sense for my case.

It makes no sense at all.
You already paid the interest within the price of the commodity which I'm quite sure you have no idea what that interest rate really was.

 

[Hozzie]

What is it you think you're taking advantage of?
You don't even know the percentage of interest they hide in the cost to make it look like you're paying no interest.
I'm glad you're laughing thinking there are "grays" in financing.
Basically it is quite black and white...you pay money to buy time....all the time, every single time.

I will explain exactly based on my recent purchase of a M7060 cab with selected options.

For me specifically, I received prices for cash and 0% financing. The price difference was $700 more for 0%. I will use whole numbers rounded to the nearest thousand to make this easy. My purchase price at 0% was $54,000. I paid a down payment of 5k so they would change an existing order to my specs to I get it sooner. I told them I would borrow 45k as I like round numbers and I will pay it down to that.

I could simply pay cash, but I can pretty easily get 7% return on that cash as an investment. Over 5 years, that same 45k will net me 18k in profits while I only paid $700 to get the 0%. If I had not taken the 0%, and went with 1.9% financing, I would have paid 2.2k in interest over that same 5 years.

So all in, I will net 17k by taking their 0%. Seems like a pretty smart decision to me. Maybe everyone can't do that, but making blanket statements about 0% being dumb doesn't fly. Everyone's circumstances are different and there are plenty of people who can figure out if it makes sense.

Or pay the full price in cash and lose the investment it could return. For me, that's dumb.

 

[jyoutz]

It makes no sense at all.
You already paid the interest within the price of the commodity which I'm quite sure you have no idea what that interest rate really was.

Not true. Dealers do not give very much cash discount on the price of a new tractor. I was offered a $1100 cash discount on a $40k tractor if I paid cash. I went with the 0% for 72 months and paid the extra $1100. I found this to be true with the 4 dealers I got quotes from (in 3 different states). Tractor dealers aren’t offering much discount for cash. Where the Kubota dealers make up for the 0 interest is in the Ktac insurance that is required for financing. But it’s good insurance so I’m ok with the $75/month that it costs.

 

[Hozzie]

the Ktac insurance that is required for financing. But it’s good insurance so I’m ok with the $75/month that it costs.

You don't have to use KTAC, but you do have to show proof of insurance. I use my local Farm Bureau for a lot less cost than what they quoted me for KTAC.

 

[CADplans]

I'm glad you're laughing thinking there are "grays" in financing.
Basically it is quite black and white...you pay money to buy time....all the time, every single time.

I was wondering about WHY Honda offered me 0% financing on my last two car purchases,,
THEN, I happened to see an article that explained why Honda DID NOT WANT PAID right away.

It turns out, that they were betting on a change in the exchange rate as the reason for offering 0%.
By being paid in future dollars, and moving that money at the future exchange rate,, Honda made BIG money.

The 0% financing benefited me, the loan repayment in future dollars benefited Honda.
IT was a WIN-WIN.

So, yes, there are gray areas, not all financial transactions are black, or white,,,

Something similar had to have happened in 2018 when I bought my Alaskan,,
I got a significant discount,, AND 0% financing. I can see no other explanation.

My final cost for my 2018 2500 Chevy was less than I paid for my 1999 2500 Chevy,
that is actual dollars, not inflated dollars, or some such thing.

 

[jyoutz]

You don't have to use KTAC, but you do have to show proof of insurance. I use my local Farm Bureau for a lot less cost than what they quoted me for KTAC.

I know, but I think that the Ktac is worth the extra money. Any accidents with the tractor and $250 fixes it.

 

[Cougsfan]

It might be just me, but I can think of at least a half a dozen tractors I would buy before buying a JD compact tractor in any size range. They are drastically overpriced and not a bit better nor more reliable, more comfortable or more functional than their many competitors.

People keep talking about the high resale value of the JD over other less expensive brands. That has been shown in this forum repeatedly to be faulty logic. Research it and you would find that you take a fairly equal percentage of devaluation over the original purchase price of most any tractor you buy. Simple math logic tells you that a more expensive tractor to fill the same need of a less expensive tractor, both with the same ratio of depreciation is not a financial advantage at all for the expensive tractor. Over the lifespan of your ownership of the tractor, the expensive one will still be more expensive.

As far as "buying American" goes, there isn't that much difference of how many of your purchase dollars stay in the US with any brand of compact utility tractor you buy, despite whose flag they claim to wave.

 

[plastikosmd]

My opinion differs but that is why they are called “opinions”

But as stated, I only had 2 local dealers of machines and one wasn’t a great experience
Moreover, the price differential between what is considered as the “top 2” was equivalent (shocking)

 

[arrow]

I will explain exactly based on my recent purchase of a M7060 cab with selected options.

For me specifically, I received prices for cash and 0% financing. The price difference was $700 more for 0%. I will use whole numbers rounded to the nearest thousand to make this easy. My purchase price at 0% was $54,000. I paid a down payment of 5k so they would change an existing order to my specs to I get it sooner. I told them I would borrow 45k as I like round numbers and I will pay it down to that.

I could simply pay cash, but I can pretty easily get 7% return on that cash as an investment. Over 5 years, that same 45k will net me 18k in profits while I only paid $700 to get the 0%. If I had not taken the 0%, and went with 1.9% financing, I would have paid 2.2k in interest over that same 5 years.

So all in, I will net 17k by taking their 0%. Seems like a pretty smart decision to me. Maybe everyone can't do that, but making blanket statements about 0% being dumb doesn't fly. Everyone's circumstances are different and there are plenty of people who can figure out if it makes sense.

Or pay the full price in cash and lose the investment it could return. For me, that's dumb.

I am not arguing cash vs financing. nor what your money returns.
I am talking about the fallacy of 0% financing. Everyone IS paying interest on 0%.
To use round numbers, if a machine would normally go for 45K, once the 0% is conjured by the manufacture, the msrp for that machine can raise to anything they deem fit as a return on their loan.
If they add 6K more, that machine is now priced at 51K. Anything you pay on this amount no matter how you work it down, will be based on the 51K.
Cash "price" is again dictated by the manufacture and they can make that number anything they wish to make the 0% appealing.

Just tell me what the price for the commodity is w/o the 0% crap and that "real number" is never gonna happen anymore because there is too much to gain for the 0% scam for the manufacturer.

It is an "illusion" at best.

 

[arrow]

I was wondering about WHY Honda offered me 0% financing on my last two car purchases,,
THEN, I happened to see an article that explained why Honda DID NOT WANT PAID right away.

It turns out, that they were betting on a change in the exchange rate as the reason for offering 0%.
By being paid in future dollars, and moving that money at the future exchange rate,, Honda made BIG money.

The 0% financing benefited me, the loan repayment in future dollars benefited Honda.
IT was a WIN-WIN.

So, yes, there are gray areas, not all financial transactions are black, or white,,,

Something similar had to have happened in 2018 when I bought my Alaskan,,
I got a significant discount,, AND 0% financing. I can see no other explanation.

My final cost for my 2018 2500 Chevy was less than I paid for my 1999 2500 Chevy,
that is actual dollars, not inflated dollars, or some such thing.

There are no "grays" in the aspect of borrowing for time. You always "pay".
It only appears that it is a win-win and that is exactly what they're after.

 

[arrow]

Not true. Dealers do not give very much cash discount on the price of a new tractor. I was offered a $1100 cash discount on a $40k tractor if I paid cash. I went with the 0% for 72 months and paid the extra $1100. I found this to be true with the 4 dealers I got quotes from (in 3 different states). Tractor dealers aren’t offering much discount for cash. Where the Kubota dealers make up for the 0 interest is in the Ktac insurance that is required for financing. But it’s good insurance so I’m ok with the $75/month that it costs.

Their "cash price" is positioned to make the 0% crap more appealing.
It is part of the hoax.
Don't take too much off the "cash price" because we don't want the customer to go to his bank and acquire a home equity loan at 1.9%.
They figure their cash price so it looks commensurate to you taking the extra step of going to your bank for the loan.
You are still paying interest on an over priced item to equate to the illusion of 0%.

 

[Hozzie]

A manufacturer can raise the MSRP for a multitude of reasons. One of those could be 0%, but I don't believe that is the major contributing factor to an increase in MSRP. It's impossible to say exactly what the impact is (without seeing their internal docs) and I also won't disagree that it probably has some impact, but I don't believe it is a 1 to 1 offset.

At the end of the day it doesn't really matter. The price is the price regardless of the reason. People have to decided to pay it or not.

 

[RSR]

My LS dealer offered me a $2500 cash price reduction over the finance price. Kubota didn't offer anything. One of the reasons I didn't go with Kubota. I'm not willing to pay a finance charge when I'm not financing the tractor.

 

[espacef1fan]

It makes no sense at all.
You already paid the interest within the price of the commodity which I'm quite sure you have no idea what that interest rate really was.

I did have an idea of the interest rate, loan terms and monthly payment.

They drew up both sets of paperwork.

In the end, it was about $70/mo less to do the 0% +finance charge than the 5% or whatever it was without the finance charge.

The risk for me is I owe more in pay off which would affect me if I needed to sell it or trade it in.

However I’ll pay less overall with the option I chose.

 

[Cougsfan]

I agree with you that some things say made in america and yet have foreign parts. However, there are products that are made 100% in the usa. Plus, i guess im struggling to understand when you say "sub-standard in quality". Are you saying these are sub quality to their chinese counterparts? Plus, isn't buying something that has 60% of componets made in america better than buying something with 100% made overseas?

Are you really naïve enough to think a JD4044 is 100% American made? Or even 60%? Unlike JD's larger tractors, the JD4044 and their other compacts are no more "American made" than any other Korean, Japanese or Indian tractor. In fact some "foreign" tractors (Kubota and Branson for instance) have a considerably larger percentage of their final assembly done in the States. The American JD workers get no benefit at all from the sale of JD compact tractors. The only Americans who makes more money from a JD compact tractor sale are the overpaid JD executives and the company stock holders (a large percentage of whom are actually Chinese).

 

[arrow]

I did have an idea of the interest rate, loan terms and monthly payment.

They drew up both sets of paperwork.

In the end, it was about $70/mo less to do the 0% +finance charge than the 5% or whatever it was without the finance charge.

The risk for me is I owe more in pay off which would affect me if I needed to sell it or trade it in.

However I’ll pay less overall with the option I chose.

Only because the company dictated the purchase price and its buy down price was commensurate to achieve to look like a "savings".
Who ever thought of this scheme was very clever and looked at all angles to make it seem like the consumer is getting something for nothing.
It's the "lie" of the entire thing that is bothersome to me.

As far as your concern of being under water with an eventual loan, they also considered that with themselves.
With what has happened to tractor prices in the last15 years, it is doubtful that you would "lose" money on the deal.
People are getting not only what they paid for their tractors 5-10 yrs ago, but in some cases more.

 

[arrow]

A manufacturer can raise the MSRP for a multitude of reasons. One of those could be 0%, but I don't believe that is the major contributing factor to an increase in MSRP. It's impossible to say exactly what the impact is (without seeing their internal docs) and I also won't disagree that it probably has some impact, but I don't believe it is a 1 to 1 offset.

At the end of the day it doesn't really matter. The price is the price regardless of the reason. People have to decided to pay it or not.

Hozzie, yes there can be a multitude of reasons for price increases but that is not my argument. The jist of "0'% as a marketing scheme, has substantially added to the pricing of commodity.
It is the "big lie" about the whole thing that bothers me the most.
The gullible fall for this and run to buy stuff thinking they are not using their money and its not costing them anything to do so. That is total bull****e.

We have a commercial on the local channels right now for a local furniture store staying "when was the last time you went to your bank and was charged nothing for your loan"? "Well we are doing just that at Jordan's Furniture with 0% interest with as much furniture as you want to buy and you have 84 months to pay". I want to shoot the TV every time I hear this ad.

The "plus" for this is totally for the company but they make it look like the customer is the one really getting the advantage and make it seem like "win-win".
0% does several things advantageous for the company: 1, They get to be their own finance institution and able to glom the interest that would ordinarily go elsewhere.
2. they can dictate pricing anywhere they want to appear advantageous. Haggling is reduced to a breath in many instances. 3. They achieve total retail pricing without making it seem so bad for the consumer. 4. They purport how convenient it is for the customer not to have to shop for financing.
5. The scheme is quite ingenious as it increases customer traffic with the customer thinking it is not costing them anything and they don't have to use their own money.
Exactly like you thought.

It is pulling the wool over the publics eyes and I for one, abhor that kind of funny business. I didn't do such when selling Dodge trucks, I don't do it now with working for Mahindra and i will always tell people the truth and show them their best avenues to acquire what they want even to the extent of perhaps they should not be considering such a heavy purchase right now.

I have 3 daughters and when they went to buy cars for themselves, it was like the sharks were circling at the dealerships. That to me was abominable to treat people in such a way because one thinks to take advantage of them.

That is what 0% is for me, taking advantage of people and I will never buy furniture at Jordan's Furniture.

 

[ruffdog]

I would sure lean towards the green color.

 

[jyoutz]

Their "cash price" is positioned to make the 0% crap more appealing.
It is part of the hoax.
Don't take too much off the "cash price" because we don't want the customer to go to his bank and acquire a home equity loan at 1.9%.
They figure their cash price so it looks commensurate to you taking the extra step of going to your bank for the loan.
You are still paying interest on an over priced item to equate to the illusion of 0%.

Your argument makes no sense. The cash price is the lowest price available. I’m sure not going to pay interest on a bank loan to lower the price of a $40k item by several hundred dollars. Neither am I going to pull money from investments making 10% to save a few bucks.

 

[espacef1fan]

Only because the company dictated the purchase price and its buy down price was commensurate to achieve to look like a "savings".
Who ever thought of this scheme was very clever and looked at all angles to make it seem like the consumer is getting something for nothing.
It's the "lie" of the entire thing that is bothersome to me.

As far as your concern of being under water with an eventual loan, they also considered that with themselves.
With what has happened to tractor prices in the last15 years, it is doubtful that you would "lose" money on the deal.
People are getting not only what they paid for their tractors 5-10 yrs ago, but in some cases more.

I even cross shopped loans at credit unions and stuff but the 0% “scheme”still worked out to be the best deal even if it “feels” deceiving.

Still, everyone should do their homework and do some simple math.

And I agree about tractor pricing, that’s why I bought the tractor 2 years earlier than I planned.