Interest rates on new tractors!

[Chuckie]

Those cab tractors are really looking nice this time of the year.
I did look at the interest rates on tractors. They will give you a new one for almost 0% interest rate, and charge you more for the used one.

I could buy a used one, put it on a fixed rate, with a multi flex pay plan, and pay it off in a few years. I just can't see getting saddled to one of those nice bright green shiney ones with all that pretty glass and clean seats and smelling new. But paying for it like a second house.

The only prices I found at Farm Credit Services had 3 yr rates for used equip for 5.05%, 5 yr at 5.65% and 7yr at 6.1%.

It would be nice to set one up on a monthly payment to fix the rate while it was low, then slam it when you sold crops, calves, and pay extra each month. You could have it knocked out in a matter of time.

I still do not want to take money out of retirement. Tis the time to invest!!!
And buy a cab tractor.
Chuckie

 

[Nesikep]

I'm 30, and i can't ever see myself ever buying anything new.. I like buying stuff that's like new though, for 1/3rd the cost

 

[Chuckie]

I would like to correct myself Nesikep, when I said I could buy a new one. There is no way I would buy a new one. I just meant that as a matter of speech.
Nesikep, the new stuff is no longer new, when you use it the first week. I like the new used stuff, but I get the new used stuff that has been used longer than just the recently new used stuff.

Everyone is different. The tractor I buy, I will always have the cash to pay it off, otherwise, I do not need it. But I may still be making payments on it. Hopefully I have some money elsewhere drawing more interest than I am paying on the tractor.

But when I see those new tractors and trucks, I see debt. The wealthiest farmer around here, runs the same tractors, and occasionally buys a used late model tractor. Each winter he puts his tractors in the shop and goes over them and makes sure they are in top shape for the following season. Equipment too.
He does not borrow money to put in his crops. He is my hero!!!!!!!
Chuckie

 

[dun]

I bought one new tractor (open station, paid cash). 2 years later I traded it in on a used one (cab, paid cash) that had fewer hours and was the same age. It was one of the few really really good deals I made. They allowed me only 1000 less on my used tractor then I paid for it new. Except for land, if I can;t write a check for the whole amount I don;t need it.

 

[Alberta farmer]

One thing about a tractor...it holds its value much better than a truck or a car?
I have a reclamation business that requires two tractors in that 100 hp range. It is actually cheaper to trade them every four or five years(warranty). If you stay with the same dealer/brand you get a pretty good deal. I have been buying Kubotas as they have a superior warranty/ 0% financing/price/ quality built in. Also the local Kubota dealer is way superior to the John Deere dealer or Massey dealer or New Holland dealer. The Case-IH dealer is pretty good but can't match the warranty/financing/price of the Kubota.

 

[dun]

One thing about a tractor...it holds its value much better than a truck or a car?
I have a reclamation business that requires two tractors in that 100 hp range. It is actually cheaper to trade them every four or five years(warranty). If you stay with the same dealer/brand you get a pretty good deal. I have been buying Kubotas as they have a superior warranty/ 0% financing/price/ quality built in. Also the local Kubota dealer is way superior to the John Deere dealer or Massey dealer or New Holland dealer. The Case-IH dealer is pretty good but can't match the warranty/financing/price of the Kubota.

That's the way the dairy does it. hey just call the dealer and a new tractor is delivered and the old one picked up. If anyhting goes wrong with the tractor they'll come out and pick it up and drop off as near to identical tractor as they can get while the other one is in the shop

 

[Chuckie]

Dun,
Paying cash may be the way it has to be this time. It just depends on how things are looking. As far as going into debt, I had as soon someone shoot my foot off.
It has been hard for me to pull money out of funds where they were drawing 10-15% interest when I could use the banks money for less than half.
Right now they are fickle.

But one way or another, I am going to get that cab tractor!!!
Chuckie

 

[mobgrazer]

I got a 2008 Dodge 5500, 4x4, quad cab, 6.7L Cummins, 6 speed manual, and some of the extra odds and ends. We paid cash for the truck for the best deal. Wife made me charge the bed, lights, brush guard, and running boards; had to pay cash on the labor. I refused to drive it until she paid it all off 2 months latter. I did find out she wanted some flyer miles, if I got a truck she can take a trip with out me and the kids.

I just made it to 1,000 miles. It stays in our shop and when all 6 of us go somewhere and need to haul stuff we forget about it and take the old truck and a car. It's too big to fit in the garage at the house but never thought about that until we got it home.

We pay cash for most stuff. Land we take out on loan for the tax write off. Large orders are credit card but are good about paying 90% of it off every month. Everything else is cash or check card.

We have 2 cab tractors and 2 non cabs. When we cut and haul hay I end up without the cab and the other 2 bicker about who gets the better AC and CD player

Chuckie your right about how hard it is to pull money out of 12.9% when you can get a loan for all most nothing.

 

[Chuckie]

On those new equipment and truck loans, those 0% interest loans, they have a lot of hidden costs that cover a lot up. Used to, they would do the 0% loans for the 1st year. Are they doing them for the whole term of the loan now?
I still go used. If I were Warren Buffett, I would buy a used cab tractor.
My rule of thumb is, (e.g.) borrow money from someone for equipment at
4.9%, and leave money alone in funds making 10-15% alone. But you can get in trouble if: you do not have the cash to pay it off at any given moment. You must have the cash where you can get your hands on it within a few days.
Sure keeps the stress down.
I keep the stress down so low, that I still don't have that cab tractor. I have been talking about it for over a year!!!!!
I guess I want to see if I really want it. :shock:
I saw on TV, the "Repo" show, and they went to a farm and repo'ed a Kubota tractor. I don't want to see anyone get anything repo'ed. I bet you won't see them going to a farmer's house to pick up a 9030 JD.

Chuckie

 

[Angus Cowman]

I got a 2008 Dodge 5500, 4x4, quad cab, 6.7L Cummins, 6 speed manual, and some of the extra odds and ends. We paid cash for the truck for the best deal. Wife made me charge the bed, lights, brush guard, and running boards; had to pay cash on the labor. I refused to drive it until she paid it all off 2 months latter. I did find out she wanted some flyer miles, if I got a truck she can take a trip with out me and the kids.

I just made it to 1,000 miles. It stays in our shop and when all 6 of us go somewhere and need to haul stuff we forget about it and take the old truck and a car. It's too big to fit in the garage at the house but never thought about that until we got it home.

We pay cash for most stuff. Land we take out on loan for the tax write off. Large orders are credit card but are good about paying 90% of it off every month. Everything else is cash or check card.

We have 2 cab tractors and 2 non cabs. When we cut and haul hay I end up without the cab and the other 2 bicker about who gets the better AC and CD player

Chuckie your right about how hard it is to pull money out of 12.9% when you can get a loan for all most nothing.

Well they way I look at that is if you bought the truck and haven't used it why waste the money on it when i am sure that it could of had better uses on the farm instead of a new trk that sits in the shop that is a want not a need

I buy cab tractors because we use them I have only bought 1 new one in my life and it was this yr i did because it only cost me 10k more than the used one I was looking at and I got 2 yrs more warranty on it than was left on the used one I could of extended the warranty on the used one but was going to cost 5k so the new one figured out as a better deal

 

[mobgrazer]

The truck is a need as it's a replacement for the truck we have now on it's last leg. Were just not used to having it around yet so it doesn't get many miles. It would get more miles but I haven't driven it to church or in to the city when a large gas car holds the 6 of us and gets better gas mileage.

As for tractors we have one extra when we roll hay. One is 2, one is 5, one 15, and the last one 16 years old. As long as they stay reliable and not money pits we will keep them. We do try to keep the hours off the newer ones if the old ones can do the work just as well.

 

[TexasBred]

Dun,
Paying cash may be the way it has to be this time. It just depends on how things are looking. As far as going into debt, I had as soon someone shoot my foot off.
It has been hard for me to pull money out of funds where they were drawing 10-15% interest when I could use the banks money for less than half.
Right now they are fickle.

But one way or another, I am going to get that cab tractor!!!
Chuckie

Depends on what type retirement fund you're pulling from. Don't know if there will be any penalties but it might be taxed as income which would raise the cost of the funds to buy the tractor. that 5% might be better. Now I want to know how you guys are earning 10-12.9% on your retirement funds today????

 

[Cowdirt]

On those new equipment and truck loans, those 0% interest loans, they have a lot of hidden costs that cover a lot up. Used to, they would do the 0% loans for the 1st year. Are they doing them for the whole term of the loan now?
I still go used. If I were Warren Buffett, I would buy a used cab tractor.
My rule of thumb is, (e.g.) borrow money from someone for equipment at
4.9%, and leave money alone in funds making 10-15% alone. But you can get in trouble if: you do not have the cash to pay it off at any given moment. You must have the cash where you can get your hands on it within a few days.
Sure keeps the stress down.
I keep the stress down so low, that I still don't have that cab tractor. I have been talking about it for over a year!!!!!
I guess I want to see if I really want it. :shock:
I saw on TV, the "Repo" show, and they went to a farm and repo'ed a Kubota tractor. I don't want to see anyone get anything repo'ed. I bet you won't see them going to a farmer's house to pick up a 9030 JD.


Chuckie, Seems your rule of thumb is out the window right now for me. Most funds are delivering negative numbers now. Not a good time for the faint-of-heart investor.

Chuckie

 

[Nowland Farms]

Two years ago when we bought the new Kubota 7040 w/cab we were going to pay cash until the dealership offered 1.9% interest on 2 year financing. We financed the tractor at 1.9% and put our cash in a 24 month CD drawing 4.3% interest. The tractor is now paid off and we earned a bit more than interest than we paid out.

Likewise when I bought a new truck in july of this year, it was cheaper for me to take the 72 month 0% financing GM was offering and invest the cash (we had put back for the truck) in a 60 month CD at 5.25%. In situations like this, I don't mind using someone else's money (GM or Kubota) if I have the money to pay it off.

 

[BeefmasterB]

The only probelm I've found with those zero interest loans is that it's almost impossible to get them down on the sale price on the car or tractor your buying.

 

[Texas Gal]

About 18 months ago we choose the 0% interest for 36 months on our new tractor. We negotiated the price first THEN asked about the 0 %. We always try to use their money for nothing and put ours where it'll earn a some interest.

 

[Alberta farmer]

When I buy the tractors I just go to every dealer and say give me your best deal. On the last two I got 0% financing for 48 months. 5 year warranty.
The John deeres were priced at $73,000. The Masseys at $69,000. The Cases at $71,500. The Kubotas at $64,000. The NewHollands at $58,000. All with front end loader and grapples, three point, and all the bells and whistles.
The John Deeres were definitely the heaviest tractors and the New Hollands the lightest. The Kubotas are fairly light, but then that is okay for the work they are doing.
The John Deeres and New Hollands were made in India or China. The Kubotas are built completely in Japan.
I realize these prices seem high compared to US prices, but remember that is in Canadian dollars and in Canada we pay more for everything.
These tractors will easily pay for themselves in about a year in the oil patch.

 

[Jogeephus]

The only probelm I've found with those zero interest loans is that it's almost impossible to get them down on the sale price on the car or tractor your buying.

That's where the interest is hidden. Matter of fact, if you decide later to pay it off early they will then knock off interest from the payoff price. Nothing is free - not even money.

 

[novatech]

Nothing is free - not even money.

You need to tell the politicians and broke mortgage companies

 

[Angus Cowman]

When I buy the tractors I just go to every dealer and say give me your best deal. On the last two I got 0% financing for 48 months. 5 year warranty.
The John deeres were priced at $73,000. The Masseys at $69,000. The Cases at $71,500. The Kubotas at $64,000. The NewHollands at $58,000. All with front end loader and grapples, three point, and all the bells and whistles.
The John Deeres were definitely the heaviest tractors and the New Hollands the lightest. The Kubotas are fairly light, but then that is okay for the work they are doing.
The John Deeres and New Hollands were made in India or China. The Kubotas are built completely in Japan.
I realize these prices seem high compared to US prices, but remember that is in Canadian dollars and in Canada we pay more for everything.
These tractors will easily pay for themselves in about a year in the oil patch.

I would like to know what JD and what NH you were looking at because My NH hollands are as heavy or heavier than my JDs were also their seems to be to much price difference between the JD and NH the same tractors in green or Blue are only a couple 1000 different here
and I haven't seen a Kubota that will compare in weight to either one of them also my JD was made in France and my NH was made in England