Why buy new

[coobie]

Keep my money in the bank? The Interest charges don't even cover the Service Charges like they did, even a few short years ago.

Ya,banks are paying HUGH interest on your $$.Maybe 2%..Laffin..

 

[Geotech]

I am no financial expert. But all these "CREDIT" companies, associated with the big manufacturers, are they all just not for profit companies staffed by volunteers? After all, there isn't any profit in 0%, is there? Who then pays for the bricks, mortor, electricity and computers? It's a serious question.

Who cares who pays for bricks and mortars if by taking a small loss or breaking even through financing, they sell more total units and make overall more money? This is how a business sees it while individuals get all caught up on departmentalizing finances that, in reality, are fungible.

Tell you what - go pay cash for a new Kubota L Series. You'll save a whole $900.00. I'll eat more than that in hamburgers over five years. Now let's put this whole conversations into the correct context...It has been said that zero percent financing is not zero percent. That's true. It cost me $900 to finance 20K over five years. That is really about 1.2 percent. That is probably still not realistic. So how are they subsidizing the financing? Guess what - from folks who pay CASH. So when you proudly plop down cash for a new machine, you subsidize my loan! When you buy your great used deal, all the new tractor prices, financed or not, contribute to the appraised value of the used equipment. So we are all in this together. Nobody is getting over on anybody.

SO - are the manufacturers just getting fatter and fatter.... NO, because they will still undercut each other - competition. So in the end, the aggregate valuation and selling prices of tractors are competitive. But CASH buyers SUBSIDIZE the low interest rates for those of us who borrow.

So, thank you for paying cash for your tractor. Somebody needs to pay interest that I am not paying.

 

[Geotech]

Ya,banks are paying HUGH interest on your $$.Maybe 2%..Laffin..

If you think banks are the only place to park your money...you should stick to paying cash.

 

[fried1765]

Am I the only one tractor buyer who believes that cash (actual stacks of $100's) should get a discount? Because I do.

I start the negotiation on a piece of equipment stating I want to finance it, preferably thru their dealership.

Then after they are salivating thinking they can get a bigger ski boat, I walk out the door with papers in hand to sleep on it. I then call them the next morning from home with papers in front of me and ask for their cash price. If they are smart, they'll call me back with a fair number. If they're scum, they'll back pedal for a mile with excuses.

It outs a lot of sleazy dealers/sellers, I'll tell you that.

I do the same with automobiles,......but I am never a new auto buyer, and I am not a frequent auto buyer either.
For me it is somewhat of a pricing/shopping game, because I never allow myself to be convinced that I NEED a particular vehicle.
I have several backup automobiles, and more than one tractor.
A vehicle dealer may not like me, but I am not buying a friendship.

 

[fried1765]

Who cares who pays for bricks and mortars if by taking a small loss or breaking even through financing, they sell more total units and make overall more money? This is how a business sees it while individuals get all caught up on departmentalizing finances that, in reality, are fungible.

Tell you what - go pay cash for a new Kubota L Series. You'll save a whole $900.00. I'll eat more than that in hamburgers over five years. Now let's put this whole conversations into the correct context...It has been said that zero percent financing is not zero percent. That's true. It cost me $900 to finance 20K over five years. That is really about 1.2 percent. That is probably still not realistic. So how are they subsidizing the financing? Guess what - from folks who pay CASH. So when you proudly plop down cash for a new machine, you subsidize my loan! When you buy your great used deal, all the new tractor prices, financed or not, contribute to the appraised value of the used equipment. So we are all in this together. Nobody is getting over on anybody.

SO - are the manufacturers just getting fatter and fatter.... NO, because they will still undercut each other - competition. So in the end, the aggregate valuation and selling prices of tractors are competitive. But CASH buyers SUBSIDIZE the low interest rates for those of us who borrow.

So, thank you for paying cash for your tractor. Somebody needs to pay interest that I am not paying.

Kubota L series......"you'll save a whole $900".

Not me!
Kubota is not the only tractor manufacturer on the planet.
There is someone out there selling very similar tractors, who will provide a meaningful cash discount.

The Kubota $900 cash discount example...... would simply mean no Kubota tractor sale to me.
Virtually the entire world beyond the USA, operates on an age old concept called.......bargaining.
I understand that many folks do not have the time or intestinal fortitude to play the game.

Then of course, there is the instant gratification issue.....I gotta have it NOW!

Having traveled throughout much of the world during my working life, I have learned to be patient, and enjoy the bargaining game.

 

[coobie]

If you think banks are the only place to park your money...you should stick to paying cash.

Never said that.DAH !! Laffin though..Note to self I do PAY CASH..

 

[Industrial Toys]

I can't even imagine using something that I don't own. I love machines, but heck, if I had to pay for it again and again and again, and again, I would learn to love something else.

And maybe, just maybe, Companies don't want to offer a true cash discount, because it reveals their racket for what it is. It's a catch 22 situation, and they have decided that the money is in financing.

It's also like companies that will not give you a cash discount over credit card purchase, because next people want that price and STILL use their credit card. So since credit is the biggest part of their business they just accept the possible loss of a cash customer.

 

[rScotty]

Isn't it odd how so many threads about choosing a tractor so often end up discussing the financials rather than the technical? Why is that? Does it even make sense?

After all, the difference in price is only a few percentage points, while any real difference in quality is worth far more.

It's as though all tractors really are the same, and it's only the price that makes them different.
Well, pardon me....but I don't think so. What I think is that it's the same competitive world out there for every manufacture of anything, and that any manufacturer who focuses on quality first is aware that his cost is going to go up.

I'll grant you that a higher price doesn't insure higher quality, but also true that focusing on high quality is going to raise the price of making most anything.

Hey Mr. Salesman.....talk to me about things that matter.
rScotty

 

[Industrial Toys]

Frankly, I see more people proudly flaunting stuff they don't own. And often, a lot of stuff!

 

[coobie]

Frankly, I see more people proudly flaunting stuff they don't own. And often, a lot of stuff!

How do you know that for sure do you check there bank accounts?Funny though keep them coming..

 

[Industrial Toys]

I guess you have heard little about high consumer debt. Nothing like people pretending to have it all!

 

[check]

I like dealing with the country tractor dealers/salesmen. With me they have always been straightforward and down to earth. My tractor purchased in 2008 was a very pleasant experience. When it comes to auto dealers, however, that is another matter. It is all out total war from the get go. My last five vehicles have been pick up trucks, and the salesman at the end of the day was always mad at me. That is how I could tell that I got a good deal. But I always felt like I had to go home and take a shower after.

 

[Geotech]

You asked the question,I answered.Sorry your butt hurt..

I didn't ask any questions. I do like the turn of phrase butt hurt though. We can both agree that's funny.

 

[kenmac]

well, I pay cash. That said, I most of what I purchase is used. So, I save the finance charge, the insurance, and the depreciation

So, ''why buy new'' ? I have no clue. Unless, some want the latest and greatest gadgets.
Which to me, the latest and greatest gadgets isn't worth getting all the emissions crap that's included

 

[mopardude318]

Ok. I'll be honest.

I was looking for a good used tractor. I had 5 grand cash. (All I had, lol) Obviously I couldn't afford a good used tractor in the size I needed, which were going for low 20's. So I financed a new Kubota and I am making a monthly payment that I can afford. It's been a year & a half since then. I don't make a bunch of money, my house is not paid off, but I'm a younger dude and have many more years till I retire. Lol

Maybe not the smartest thing, but my Mopars sure take all the rest of my cash. :banghead:

 

[djefferis]

Frankly, was not aware there are so many arm chair "financial planners" on here.

The whole debate of "paying zero interest" is better or "cash should get a discount" is meaningless AS YOU DO NOT KNOW ALL THE VARIABLES. Zero interest in theory is better than paying cash - assuming the buyer has both options - provided the buyer has income to make the monthly payments and not effect their credit score/debt to income ratios - and there are no other viable options to the zero percent offer. All of these criteria are pretty narrow though.

Income is typically a limited amount...even if I work overtime, I am limited in the number of hours of OT I can work...and even if I demand a raise or take a higher paying job...my salary has a ceiling. Now if I'm a doctor making 300k+ a year....buying a 20k unit is probably not a problem either way - and for the 2 people on this forum who meet that criteria - good on you, job well done - stop reading here. For everyone else you need to begin by figuring can you afford the payments without effecting your budget and credit profile otherwise - if so, its going to come at a cost above "0" likely.

Then as mentioned - are there alternatives. Again, many makers offer "0" percent financing in house - and if those are the only makes you can consider - then that is an easy decision. BUT - as the original title of this thread suggest, used is an option. Perhaps there are no quality used units available local (rare - but clean used can be scarce at times in some locales) - of course used tractors exist in other markets and we have trucks that can haul these at a cost anywhere in the world - so within the lower 48 is not a problem. Its a cost to factor in - and on a unit that sells new for 11k, shipping cross country is probably not cost effective for a 1 year old low hour unit...but the higher up the food chain you go, the better the shipping cost ratio becomes.

And of course again as mentioned - many brands offer substantially similar performance/features. Of course some things will limit your choice...using the example of my friend, a union tradesman. They need a 1 ton diesel and it must be from a union company...so his choices are limited. If they could get by with a half ton gas truck- there would be many more options. PREFERENCE is a choice, not a requirement...my grandfather taught me long ago the only color that matter when dealing with equipment is green - as in $$ - and cost is not measured by cost of acquisition alone, upkeep is part of the equation too (lets put aside resale for the moment - assuming this is a long term purchase - so resale is not a great of a factor). There is no reason most people are limited to dealing with the closest dealer other than PREFERENCE.

Bottom line is - used is TYPICALLY cheaper - however there are exceptions to the rule, and PREFERENCE many times over-rides practicality and new is more popular as the cost is close enough to justify the expense for many people. New is presumed (in my opin often wrongly) to be less likely to fail than used and be lower cost of repair and payments are more easily justifiable to many people than spending accumulated savings. Again, can i invest savings at 2% in CD - sure...but that interest only applies every 90-180 days in general - and i cannot draw down the principle to make the payments. Are there 2% savings rates out there - yes, but in general promotional only in nature and require either a large account (25k+) or have a low limit (5k) and most always expire after a term of 90-365 days. So again - in theory could I invest my 25k for a year for 2% and take advantage of the savings...sure...but still have a year of payments to make (so either need to set back about 4k for payments or be prepared for the budget hit) and the interest earned will only be $500.

Im not even going to start on used trucks/autos. I've worked in the field - and if some of the people in this thread understood how these people earn a living - it would completely change the way you "negotiate". All I can say is these salespeople see anywhere from 35-200 prospects a month - and sell anywhere from 5 to 40 units - so a 10% "close" rate. They know how to close profitably - and sometimes that means letting the buyer who is demanding a unit at a bare bones profit walk. Sales numbers are nice - but higher bonuses are nicer...no bank account cares that you sold the most cars last month..they care what your draw was. Used is a different beast than new in cars (and tractors) - we all agree clean, low miles/hours used is hard to find cheap - and when I only have 1 of something and many potential buyers...I need to maximize profits. Even new - certain units I am limited in what I could acquire - so acting like you are the only buyer I have interested is likely to turn off your salesperson quickly. The know they can close much better than 10% - but opt to service only the profitable clients - no point making a nickel on 20 customers when I can make a dollar on one sucker and deal with 5% of the customer demands (free add in's, service specials, ect - keep in mind sales gets little to zero break on pricing...even in the same dealership - while the profit goes to the same company - 2 different departments/cost centers and making service/parts money is a low priority for sales).

 

[fried1765]

well, I pay cash. That said, I most of what I purchase is used. So, I save the finance charge, the insurance, and the depreciation

So, ''why buy new'' ? I have no clue. Unless, some want the latest and greatest gadgets.
Which to me, the latest and greatest gadgets isn't worth getting all the emissions crap that's included

AGREED....100% !!!

 

[ch1ch2]

well, I pay cash. That said, I most of what I purchase is used. So, I save the finance charge, the insurance, and the depreciation

So, ''why buy new'' ? I have no clue. Unless, some want the latest and greatest gadgets.
Which to me, the latest and greatest gadgets isn't worth getting all the emissions crap that's included

:thumbsup: