Kubota contract

[3rd_Planet]

I just got a call from my dealer and my tractor is ready for delivery. He sent over the contract for me to review and sign. I will be using the tractor for projects at my house, my dad’s house, and for side jobs. I have two issues with the contract so far:

1. In section 5 “Location of Property” it says that the equipment must remain at my home address until it has been paid off in full unless I receive written permission from Kubota to remove it from my home address. This obviously won’t work as I intend to transport the tractor to different places on a regular basis.

2. In the contract for the KTAC insurance it says that the insurance will cancel on the day the account is paid in full.

I feel like this contract really ties my hands as they’re telling me I can’t remove the equipment from my property while it’s financed and if I pay it off early then I’ll lose my insurance coverage even though the premium will have been paid in full as the 84 month policy is already rolled into the original loan.

Anyone else have a similar situation as mine and how did you deal with it?

 

[Orange man]

If you pay it off early they refund you any remaining insurance and you can get a new policy through KTAC. I know KTAC covers the tractor off your property so I dont understand not being able to take off your property.

 

[3rd_Planet]

If you pay it off early they refund you any remaining insurance and you can get a new policy through KTAC. I know KTAC covers the tractor off your property so I dont understand not being able to take off your property.

That makes sense and is agreeable. One of the reasons I went with Kubota was because of the KTAC coverage working both on and off my property and in transportation. I never want to be in breach of contract for any reason but this caveat makes that impossible for what I am intending to use this tractor for.

 

[nbryan]

BTW if the insurance is cancelled early I believe any refund for remaining time cancelled will not be anywhere near proportional to the original amount paid for insurance.
Like if you had 72 months insurance paid for and cancelled after 36 months, the amount you'll get back for insurance refund will not be near 1/2 the original amount paid. Mre like 1/4 or less.
It's some formula of diminishing returns the insurers use. So for the first half of term if cancelled it will cost you about 75% of the full term, or something along those lines.

 

[Orange man]

I just payed off a tractor I only had 3 months, I got back all the insurance money less the 3 months I owned it. I know several people that have Kubota equipment and use them for a bussiness and have no trouble moving them from job to job.

 

[TheOldHokie]

I just got a call from my dealer and my tractor is ready for delivery. He sent over the contract for me to review and sign. I will be using the tractor for projects at my house, my dad’s house, and for side jobs. I have two issues with the contract so far:

1. In section 5 “Location of Property” it says that the equipment must remain at my home address until it has been paid off in full unless I receive written permission from Kubota to remove it from my home address. This obviously won’t work as I intend to transport the tractor to different places on a regular basis.

2. In the contract for the KTAC insurance it says that the insurance will cancel on the day the account is paid in full.

I feel like this contract really ties my hands as they’re telling me I can’t remove the equipment from my property while it’s financed and if I pay it off early then I’ll lose my insurance coverage even though the premium will have been paid in full as the 84 month policy is already rolled into the original loan.

Anyone else have a similar situation as mine and how did you deal with it?

I am not a lawyer but I suspect you are misreading (1). I imagine that means you cant "garage" or "house" the machine in a different location. It does not mean you can't transport and use the machine at a worksite off your premises. Ask the dealer for clarification and if still unsure ask a lawyer.

Dan

 

[TheOldHokie]

BTW if the insurance is cancelled early I believe any refund for remaining time cancelled will not be anywhere near proportional to the original amount paid for insurance.
Like if you had 72 months insurance paid for and cancelled after 36 months, the amount you'll get back for insurance refund will not be near 1/2 the original amount paid. Mre like 1/4 or less.
It's some formula of diminishing returns the insurers use. So for the first half of term if cancelled it will cost you about 75% of the full term, or something along those lines.

Have a look at your account statement - in particular the balance versus payoff amounts. I think you will find its a direct prorate.

Dan

 

[Fordtech86]

Regarding location of property clause, make your payments and don’t worry about it
If they don’t have a reason to come looking for it it doesn’t matter where its at

 

[3rd_Planet]

I am not a lawyer but I suspect you are misreading (1). I imagine that means you cant "garage" or "house" the machine in a different location. It does not mean you can't transport and use the machine at a worksite off your premises. Ask the dealer for clarification and if still unsure ask a lawyer.

Dan

This is how it’s written in the contract word for word:

5. LOCATION OF PROPERTY: Until all amounts owed under this Contract are paid in full, you promise that the Property will be located at the address at the top of this Contract (“Your Address”). You promise not to move the Property from Your Address without our written permission.

 

[TheOldHokie]

This is how it’s written in the contract word for word:

5. LOCATION OF PROPERTY: Until all amounts owed under this Contract are paid in full, you promise that the Property will be located at the address at the top of this Contract (“Your Address”). You promise not to move the Property from Your Address without our written permission.

This is why we are not lawyers.

If your interpretation of those words were correct contractors would be unable to use their machines in their business. You could not transport the machine to a repair facility. The list goes on and on so I doubt that's what it means

I have the same universal boiler plate contract as yours and it has the same clause. When I discussed financing with the dealer the requirement for damage insurance when the equipment was off my property was adressed explicitly. KTAC insurance covers the equipment when off my property and homeowners would not. If I wanted to use my own insurance I needed to get a rider covering the equipment when it was off my property. There would be no need for such a requirement if that clause prevented me from taking it off the property. I purchased the KTAC insurance for that exact reason - it cover the machine when off my premises and it covers damages caused by my negligence.

Since you have concerns talk to a lawyer. Wont cost you much more than a bucket of SUDT2.

Dan

 

[nbryan]

Have a look at your account statement - in particular the balance versus payoff amounts. I think you will find its a direct prorate.

Dan

The tractor+insurance payments are pro-rated. There's a clause in the insurance docs regarding early cancellation of the insurance i.e. if I went and paid off the loan before the insurance coverage expired thereby cancelling the insurance before full term, there's this formula:

 

[TheOldHokie]

The tractor+insurance payments are pro-rated. There's a clause in the insurance docs regarding early cancellation of the insurance i.e. if I went and paid off the loan before the insurance coverage expired thereby cancelling the insurance before full term, there's this formula:

The Rule of 78ths simply gives greater weight to the first months than the end months. In this case we are dealing with monthly insurance premiums on a steadily decreasing principle. Your monthly premium is higher in the early months because you are insuring a greater dollar amount. Assuming zero percent and level payments at the mid point of your contract your insured amount is half what it was at the start so the premiums for the remainder of the term are less than the premiums already paid.

Or more simply the monthly insurance premiums are higher at the beginning of the term than at the end

Dan

 

[ItBmine]

Regarding location of property clause, make your payments and don’t worry about it
If they don’t have a reason to come looking for it it doesn’t matter where its at

And if something happens......well damn......it got stolen from your yard. Imagine that!

 

[DustyRusty]

If you pay it off early they refund you any remaining insurance and you can get a new policy through KTAC. I know KTAC covers the tractor off your property so I dont understand not being able to take off your property.

Once the tractor is paid in full, the insurance ends, and KTAC will not issue you a new policy for the tractor. I know this because I asked KTAC about insuring my tractor which was paid for in full when purchased. They only insure tractors that are financed. Originally, they would issue a policy for any Kubota financed or not, but my guess is that they got too many claims on tractors that were insured and not financed.
I purchased a separate policy that insures my tractor only when it is on my property, against fire, theft, and accidental damage to the tractor and implements. I had to list each of the implements separately.

 

[ItBmine]

Really DustyRusty? I thought I had seen on these forums that you could now get KTAC without being financed?

I just have my stuff under my homeowners policy as I didn't finance. Not sure if one is better than the other or not.

 

[Fordtech86]

And if something happens......well damn......it got stolen from your yard. Imagine that!

If its “stolen” luckily OP has KTAC insurance.

Regarding the location of property, that is from the Kubota credit contract. They want to know where to pick up their tractor if the owner fails to hold up their end of the contract by making the payments.

Anybody here that has a tractor financed through KCC signed the same contract. So again to the OP, make the payments and don’t worry about it.

 

[TheOldHokie]

Once the tractor is paid in full, the insurance ends, and KTAC will not issue you a new policy for the tractor. I know this because I asked KTAC about insuring my tractor which was paid for in full when purchased. They only insure tractors that are financed. Originally, they would issue a policy for any Kubota financed or not, but my guess is that they got too many claims on tractors that were insured and not financed.
I purchased separate police that insures my tractor only when it is on my property, against fire, theft, and accidental damage to the tractor and implements. I had to list each of the implements separately.

That is not what KTAC says on the web site. But there are some limitations:

Q & A

Q- Can I purchase insurance through KTAC Insurance Agency if I pay cash for my equipment?

Yes! However, the Kubota-Endorsed insurance is only available for cash customers who can provide a bill of sale showing that they have purchased their Kubota equipment from an authorized Kubota dealer within the last 30 days.

Q- What happens if I pay off my contract with Kubota Credit Corporation, U.S.A. early?

Your insurance through KTAC Insurance Agency will cancel at the time of pay off and the unused portion is applied to your current balance. You can choose to purchase a new policy at this time by contacting a representative at 800-348-5802.