Is 0% really 0%?

[Thorny]

I bought a new L2501 last week along with a FEL, snow blade, box blade and rotary mower. Total price after tax, delivery, assembly, filled tires, etc was $22.5K. I feel that was a fair deal where I didn't get hosed and the dealer makes a few bucks and I stand in their good graces in case I need them in the future.

I decided to buy new based on warranty and 84 months with 0% interest on the loan, which seemed like a good deal until I signed the documents. Required on this loan is Kubota insurance in the amount of $2,500!!!! That's the equivalent of an 11% interest rate! Considering that I'm paying the money to Kubota and it's required to get the loan, I feel like this insurance is a bit of a bait and switch. What do you guys think?

 

[Orangeglow]

Not a chance.

 

[LMTractorGuy]

I am buying the L2501 next week. Using the 84 month financing at 0%. I am also required to buy the insurance. Kubota financing needs to cover themselves in the event the tractor is stolen or damaged. Does your 22.5K number include the price of the insurance? Also $20,000 at 5% for 7 years would be $ 3745.00 interest. At 11% the interest would be $ 8765.00. Kubota does not require that you buy insurance from them, just that you have insurance for the life of the loan. I do not know of a lender that would not require insurance. Good luck with your new tractor.

 

[1970cs]

As said above the insurance is optional! Your dealer should have offered the insurance from Kubota and allowing you time to ask your homeowners insurance for a quote!

The Kubota insurance is better on coverage overall and the deductible is only $250.00.

Pat

 

[Daren Todd]

There is money built into the price to make up for the zero percent financing. From what I've read on the local dealerships website it looks to be somewhere between 1,000 and 1,500 dollars.

To put this into perspective. My camper I financed $9,000 at 9 percent interest. If I payed the minimum payment for the 4 year term on the loan. It comes out to $1,100 Already payed $5,500 on the note in the first year. So that $1,100 in interest will be knocked down to probably $500 for the term of the loan

 

[XSFMED18D]

Its a true 0% finance deal if the cash price is the same as the finance deal. The insurance is optional but since you dont own the tractor outright Kubota has to protect itself. You have the option to show proof of insurance if you decline KTAC. I have read multiple times that KTAC is worth the $$.

 

[Thorny]

I was told that I had to have the Kubota insurance to close the Kubota loan, and that I could change it later on (which I didn't intend to do based on the low deductible and terms of the insurance plan) but I was surprised that they rolled the entire insurance cost into the loan cost. Not really sure how I would recoup that if I switched to other insurance at a later date.

 

[Thorny]

I am buying the L2501 next week. Using the 84 month financing at 0%. I am also required to buy the insurance. Kubota financing needs to cover themselves in the event the tractor is stolen or damaged. Does your 22.5K number include the price of the insurance? Also $20,000 at 5% for 7 years would be $ 3745.00 interest. At 11% the interest would be $ 8765.00. Kubota does not require that you buy insurance from them, just that you have insurance for the life of the loan. I do not know of a lender that would not require insurance. Good luck with your new tractor.

My $22.5K includes L2501 4x4, HST, R4 tires, SSQA 66" bucket on FEL, 72" QA snow blade for front end, 60" land pride rotary mower, and 66" land pride box blade, and loading the tires, setup, taxes (3%), delivery to my house, and 10 gallons of diesel. The insurance price was on top of that.

 

[XSFMED18D]

You're going to want to keep KTAC insurance. I dont know why they mislead you but you will be glad you have it if something happens.

 

[Swampcollie]

I used my homeowners which was considerably less. I have state farm and have always been satisfied with their coverage

 

[afret]

I bought a new L2501 last week along with a FEL, snow blade, box blade and rotary mower. Total price after tax, delivery, assembly, filled tires, etc was $22.5K. I feel that was a fair deal where I didn't get hosed and the dealer makes a few bucks and I stand in their good graces in case I need them in the future.

I decided to buy new based on warranty and 84 months with 0% interest on the loan, which seemed like a good deal until I signed the documents. Required on this loan is Kubota insurance in the amount of $2,500!!!! That's the equivalent of an 11% interest rate! Considering that I'm paying the money to Kubota and it's required to get the loan, I feel like this insurance is a bit of a bait and switch. What do you guys think?

So that must be for the 7 year period which comes to a bit under #360/yr. I got the Kubota insurance for my L3901 after I bought it (did not finance it) and it costs me way more than that per year.

 

[1970cs]

I was told that I had to have the Kubota insurance to close the Kubota loan, and that I could change it later on (which I didn't intend to do based on the low deductible and terms of the insurance plan) but I was surprised that they rolled the entire insurance cost into the loan cost. Not really sure how I would recoup that if I switched to other insurance at a later date.

Total hogwash on the close the loan part! It has to be insured with a binder of some sort when the paper work is signed. Insurance is paid monthly with each payment at 0% you are not getting hurt folding in anything into the deal i.e sales tax and accessories.

Also the loan is O% point blank period! The only fee is a doc fee of $100.00 or 125.00 I believe and what ever state fees that may apply. The dealer my add a doc fee on their part, we do not charge a doc fee at our dealership.

Pat

 

[Thorny]

Also the loan is O% point blank period! The only fee is a doc fee of $100.00 or 125.00 I believe and what ever state fees that may apply. The dealer my add a doc fee on their part, we do not charge a doc fee at our dealership.

Pat

I didn't mean to imply that the loan is not 0%, simply that Kubota is getting their money one way or another. But it seems that I misunderstood the terms of the insurance, and the necessity of it being in effect to close the loan.

At the end of the day I was going to keep it in effect for the term of the loan, but I was surprised by it's total cost.

 

[jpf]

I think with some home owners insurance when you drive your tractor off your property it's not covered, but the kubota insurance still is in effect.

 

[southcoastlocal]

Kubota insurance is worth it's money you pay more for car insurance each year. Drop a tree on it or roll the tractor and they will cover it. Also 0% interest rate but read the APR rate which is around 0.015%. That's why cash price will always be cheaper than financed.


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[eipo]

I think with some home owners insurance when you drive your tractor off your property it's not covered, but the kubota insurance still is in effect.

Its usually defined as a "distance from"

Mine is covered with an individual binder on our homeowners up to 50 miles. It didn't raise the price of our insurance just specifically spelled out the tractor, loader and mmm were covered.

 

[1970cs]

Kubota insurance is worth it's money you pay more for car insurance each year. Drop a tree on it or roll the tractor and they will cover it. Also 0% interest rate but read the APR rate which is around 0.015%. That's why cash price will always be cheaper than financed.


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The APR shown on the contract is part of the "truth in lending" clause that the federal government mandates showing the doc fee charged by any lending institution.

If read the 2nd page after that with the start of all the legal spiel. IIRC the third sentence down "we will asses the finance rate of 0% for 60, 72 and 84 months"

Pat

 

[AndyM]

On my BX 25 purchase there was (of course) a difference in the Cash vs Finance price which I view is a financing cost. If you use your own money there is an opportunity cost (return you could have earned on it). So it's a choice. You can use your own insurance as opposed to Kubota's and I found that a good choice.

 

[Missouribound]

On the Kubota I just bought I took the 84 month option.
It is a true 0% finance charge. However the insurance is on top of that.
The deductible is only $250 and it covers everything except mechanical failure.
Drop a tree on it, dump it off the trailer anywhere and it's covered.
At the dealer I used I negotiated the price before I told him I was going to finance it. Some dealers will take advantage of you if they can, just like car dealers.
I got the best deal I could up front, then took the finance.
The dealer had thrown in the turf tires and the quick hitch for both the rear mower and the box blade. The loader is already quick attach.
I felt the deal was fair and the 0% is hard tol beat.

 

[1970cs]

Ok, lets get to the bottom of the Kubota insurance! The Northern division of Kubota insurance is under written by Ohio Indemnity. They are the ones collecting the $$$$ https://www.ohioindemnity.com/

It's true that Kubota does collect a small surcharge $80.00 IIRC.

Pat