Passing Along The Price Hike?

[mcmxi]

better to write the big check and pay yourself back at least its actually yours with no "landlord"

I bought the M6060 for $7k below MSRP (based on kubotausa.com) and got 0% financing for 5 years. I use State Farm for insurance which is a lot less than KTAC but probably not as good if something bad happens, but even if I paid cash, I'd want to have the tractor covered in the event of significant damage or a complete loss.

I have no problem with Kubota "owning" the tractor for five years. All of their money is tied up in it, not mine.

Think about this too. Let's say the M6060 has issues and the local dealer and/or Kubota refuses to address those issues. If I'm making payments I'll simply stop making payments and Kubota can come and pick up the tractor. Making payments can provide leverage in some situations, and if Kubota has no financial interest in the item in question their incentive to address the issue might be less than optimal.

 

[Ridelght]

better to write the big check and pay yourself back at least its actually yours with no "landlord"

Yep.......and cant take it with you. Well maybe with those Am Ex checks. Would hate to wake up dead broke.

 

[Ridelght]

I bought the M6060 for $7k below MSRP (based on kubotausa.com) and got 0% financing for 5 years. I use State Farm for insurance which is a lot less than KTAC but probably not as good if something bad happens, but even if I paid cash, I'd want to have the tractor covered in the event of significant damage or a complete loss.

I have no problem with Kubota "owning" the tractor for five years. All of their money is tied up in it, not mine.

Think about this too. Let's say the M6060 has issues and the local dealer and/or Kubota refuses to address those issues. If I'm making payments I'll simply stop making payments and Kubota can come and pick up the tractor. Making payments can provide leverage in some situations, and if Kubota has no financial interest in the item in question their incentive to address the issue might be less than optimal.

60 months for a 45000.00 tractor. Could rent for 750 a month. I weighed that when bought mine. But i could so i did and have here as i want to use. Zero for 5 years no money down sounds like a awesome deal. You said they on tbe hook for value. BTW Statefarm is a pia. Have for cars. Some The grocery store caved bed of my truck in. 4 year old truck they wanted it just pounded out and bondoed.
Estimate for new side was only 600 more thzn all that labor. I paid difference and am looki g for new insurance. This was this spring.

 

[Ridelght]

I think the relatively low hours (from 1300 - 1850), had a lot to do with my 3400 good experience.
Mine was 3 cyl. gas also.
I did rebuild the carb., and change to electronic ignition, but I had no other issues similar to yours.
I did do a nice job complete repaint.

The beauty for me was that it was a TLB ( I never used the 3pt .)!
1970 Ford 3400 TLB with 1300 hours.
Paid $10,000 in 1986, and sold in 2019 for $9,000.

Bought the L48 TLB with 251 hrs., 3rd function, and hyd. thumb, from orig. owner, for $32K
[/QUOT
That was a good deal only losing 1000 bucks in value in all that time. I pad 5500 in 2013.

 

[top gnome]

60 months for a 45000.00 tractor. Could rent for 750 a month. I weighed that when bought mine. But i could so i did and have here as i want to use. Zero for 5 years no money down sounds like a awesome deal. You said they on tbe hook for value. BTW Statefarm is a pia. Have for cars. Some The grocery store caved bed of my truck in. 4 year old truck they wanted it just pounded out and bondoed.
Estimate for new side was only 600 more thzn all that labor. I paid difference and am looki g for new insurance. This was this spring.

Ha - state farm is still state farm 40 years ago they did the same type of thing to me. They were great until you made a claim. like I said maybe the smart money would have financed the tractor especially as rates are going up. probably would have come out ahead. For us if I financed it I may have build a garage with the money in the bank instead now that I bought the tractor will have to build a smaller tractor shed to keep the appropriate cushion. Debt would have let me spend more this way I know exactly where we are at.

 

[top gnome]

I bought the M6060 for $7k below MSRP (based on kubotausa.com) and got 0% financing for 5 years. I use State Farm for insurance which is a lot less than KTAC but probably not as good if something bad happens, but even if I paid cash, I'd want to have the tractor covered in the event of significant damage or a complete loss.

I have no problem with Kubota "owning" the tractor for five years. All of their money is tied up in it, not mine.

Think about this too. Let's say the M6060 has issues and the local dealer and/or Kubota refuses to address those issues. If I'm making payments I'll simply stop making payments and Kubota can come and pick up the tractor. Making payments can provide leverage in some situations, and if Kubota has no financial interest in the item in question their incentive to address the issue might be less than optimal.

All good points

 

[XSpecBx]

All good points

Decision to finance or not is certainly a situational and personal one. With 0%, unless there is a steep cash discount, it’s generally not going to make sense to pay cash. You could take the $30k, and if you wanted a truly safe investment, put it in a high yield account getting 0.5% annually or bonds if you were OK with tying it up for longer.

I hate debt as well, but sometimes it just makes sense, even if you have the money to buy it outright, but to each their own.

 

[fried1765]

Decision to finance or not is certainly a situational and personal one. With 0%, unless there is a steep cash discount, it’s generally not going to make sense to pay cash. You could take the $30k, and if you wanted a truly safe investment, put it in a high yield account getting 0.5% annually or bonds if you were OK with tying it up for longer.

I hate debt as well, but sometimes it just makes sense, even if you have the money to buy it outright, but to each their own.

I still can't figure out how Kubota can afford to loan "free" (zero percent) money.
Is it actually "free", ...like there is absolutely no cost for it ?
Banks won't loan money for "free",......but Kubota will?
Just how does that "free" part really work?

 

[XSpecBx]

I still can't figure out how Kubota can afford to loan "free" (zero percent) money.
Is it actually "free", ...like there is absolutely no cost for it ?
Banks won't loan money for "free",......but Kubota will?
Just how does that "free" part really work?

Im no banker, but my guess is Kubota has their own financing wing and unlike a bank, who makes money from loans, Kubota makes their money selling equipment, and any losses they take on offering low or 0% interest rates is more than made up by the higher volume and more expensive machines they sell.

My wife and I do pretty well for ourselves, certainly better than most, and the money I see people spending on their machines, with many of them used for property maintenance or as a toy, is insane. Clearly the low interest rate works because people wind up buying a more expensive machine, finance implements, etc.

I see a lot of people buying LP implements instead of better 3rd party ones simply because they can finance the implement instead of putting up $2k-$3k up front for an EA or other brand. That tells me they are in over their financial heads. Most people, including myself, don’t need a tractor, but that doesn’t stop people from buying that LX with a cab when their budget it more in line with a BX.

 

[hedgerow]

I still can't figure out how Kubota can afford to loan "free" (zero percent) money.
Is it actually "free", ...like there is absolutely no cost for it ?
Banks won't loan money for "free",......but Kubota will?
Just how does that "free" part really work?

There's no free lunch. When I bought my MX-6000 last summer the dealer I bought it from offered a nice cash discount. The dealers that didn't think cash was king I just moved on. I lived threw the 80's in the ag industry bought a lot of farms and had to borrow a lot of money on varying rate loans. Back then you couldn't lock money in. Paid a lot of 16-20 percent interest. Learned a lot of hard lessons. Made it threw it with no help from anyone. I learned a long time ago if something won't make money and paid for its self I don't need it if I can't pay cash for it. For me its been over twenty years since I have borrowed money.

 

[mcmxi]

I still can't figure out how Kubota can afford to loan "free" (zero percent) money.
Is it actually "free", ...like there is absolutely no cost for it ?
Banks won't loan money for "free",......but Kubota will?
Just how does that "free" part really work?

How much does it cost Kubota to build a tractor? What are the margins for each model? What incentives do they offer to the dealers? Without this information it's impossible to know much of anything. The MSRP shown on kubotausa.com is based on some profit algorithm with different models and options yielding different returns.

Is it possible that Kubota builds in a cushion to account for 0% financing, knowing full well that the idea of no interest is a big selling point for many ... absolutely.

For most manufacturing companies the cost to build a product is highly confidential and for good reason. Kubota does a great job of building excellent products that are in high demand, and also does a great job of selling them at premium prices without alienating a large and loyal customer base.

 

[fried1765]

How much does it cost Kubota to build a tractor? What are the margins for each model? What incentives do they offer to the dealers? Without this information it's impossible to know much of anything. The MSRP shown on kubotausa.com is based on some profit algorithm with different models and options yielding different returns.

Is it possible that Kubota builds in a cushion to account for 0% financing, knowing full well that the idea of no interest is a big selling point for many ... absolutely.

For most manufacturing companies the cost to build a product is highly confidential and for good reason. Kubota does a great job of building excellent products that are in high demand, and also does a great job of selling them at premium prices without alienating a large and loyal customer base.

"It is possible that Kubota builds in a cushion to account for 0% financing"
Yah really think they would do that?

 

[mcmxi]

better to write the big check and pay yourself back at least its actually yours with no "landlord"

I bought the M6060 for $7k below MSRP (based on kubotausa.com) and got 0% financing for 5 years. I use State Farm for insurance which is a lot less than KTAC and probably a lot less if something bad happens, but even if I paid cash, I'd want to have the tractor covered in the event of significant damage or a complete loss.

"It is possible that Kubota builds in a cushion to account for 0% financing"
Yah really think so?

Why not? A major part of their sales model is 0% financing. If you know for a fact that they don't then perhaps you can provide a CBOM and enlighten us all.

Some models are better deals than others, and some customers get more tractor for that money. There's no question that I paid less for more with the M6060 compared to the MX6000. You simply get more tractor for less money with certain models.

I don't for one second think that 0% interest is free, but it's not as simple as paying cash is always a better deal, or being debt free is always a better deal.

All I'm saying is that it's a complicated situation and at the end of the day, if an individual is happy with their purchase then that's all that matters. I LOVE being outside and working with tractors and that's what it's all about for me. Getting projects done, enjoying life, and looking forward to years of tractor use.

 

[fried1765]

I bought the M6060 for $7k below MSRP (based on kubotausa.com) and got 0% financing for 5 years. I use State Farm for insurance which is a lot less than KTAC and probably a lot less if something bad happens, but even if I paid cash, I'd want to have the tractor covered in the event of significant damage or a complete loss.


Why not? A major part of their sales model is 0% financing. If you know for a fact that they don't then perhaps you can provide a CBOM and enlighten us all.

Of coureYou just had your leg pulled!

Im no banker, but my guess is Kubota has their own financing wing and unlike a bank, who makes money from loans, Kubota makes their money selling equipment, and any losses they take on offering low or 0% interest rates is more than made up by the higher volume and more expensive machines they sell.

My wife and I do pretty well for ourselves, certainly better than most, and the money I see people spending on their machines, with many of them used for property maintenance or as a toy, is insane. Clearly the low interest rate works because people wind up buying a more expensive machine, finance implements, etc.

I see a lot of people buying LP implements instead of better 3rd party ones simply because they can finance the implement instead of putting up $2k-$3k up front for an EA or other brand. That tells me they are in over their financial heads. Most people, including myself, don’t need a tractor, but that doesn’t stop people from buying that LX with a cab when their budget it more in line with a BX.

You have very correctly described the customer marketing game that Kubota plays!
They very simply build the price of their "interest free" financing into the selling price of their tractors.
Buyers are thus tricked into thinking that Kubota financing is "interest free".
Kubota then offers little or no cash discount, to keep the scam functioning.
If you disagree with the above: Please tell me where else I can borrow $30K-$60K "interest free" for 5 years.


In a way, the Kubota pricing concept is somewhat similar to the use of VAT in Europe.
Buyers there never see the tax amount on the goods they buy.
It is built into the selling price!
Buyers can only buy at a total (VAT included) price, and never directly see the true cost/price/value of the merchandise they are buying.

In Europe, a buyer could work from the VAT included % amount backward if he so chose, and thus determine the actual cost of his goods.
Obviously, this is not even a possibility, with the Kubota "interest free" financing ploy!

 

[Daferris]

You can count on the fact that the cost of the financing is built into the price of the tractor...
That is why for example the 20% equine discount does not allow you to do any cut rate financing.
It's up to the buyer to decide on what the value of the tractor and the cost to finance it to them.
Even if you pay cash for your tractor there is still a cost involved. For example to potential earnings of the cash you used to purchase the tractor.

Bottom line there is not 1 answer for everyone. For some folks paying more for something and getting 0% is the best option. Still others might find it better to get a cheaper price on the tractor and pay interest on the money. Others may find that the piece of mind of not having payments is the best option.

 

[mcmxi]

Ha - state farm is still state farm 40 years ago they did the same type of thing to me. They were great until you made a claim. like I said maybe the smart money would have financed the tractor especially as rates are going up. probably would have come out ahead. For us if I financed it I may have build a garage with the money in the bank instead now that I bought the tractor will have to build a smaller tractor shed to keep the appropriate cushion. Debt would have let me spend more this way I know exactly where we are at.

I had a very positive and easy experience with State Farm recently when the barn collapsed. They paid out within a few weeks and gave me way more than I ever expected for a structure I was going to tear down and rebuild anyway.

 

[mcmxi]

You can count on the fact that the cost of the financing is built into the price of the tractor...
That is why for example the 20% equine discount does not allow you to do any cut rate financing.
It's up to the buyer to decide on what the value of the tractor and the cost to finance it to them.
Even if you pay cash for your tractor there is still a cost involved. For example to potential earnings of the cash you used to purchase the tractor.

Bottom line there is not 1 answer for everyone. For some folks paying more for something and getting 0% is the best option. Still others might find it better to get a cheaper price on the tractor and pay interest on the money. Others may find that the piece of mind of not having payments is the best option.

Excellent points.

 

[Ridelght]

Im no banker, but my guess is Kubota has their own financing wing and unlike a bank, who makes money from loans, Kubota makes their money selling equipment, and any losses they take on offering low or 0% interest rates is more than made up by the higher volume and more expensive machines they sell.

My wife and I do pretty well for ourselves, certainly better than most, and the money I see people spending on their machines, with many of them used for property maintenance or as a toy, is insane. Clearly the low interest rate works because people wind up buying a more expensive machine, finance implements, etc.

I see a lot of people buying LP implements instead of better 3rd party ones simply because they can finance the implement instead of putting up $2k-$3k up front for an EA or other brand. That tells me they are in over their financial heads. Most people, including myself, don’t need a tractor, but that doesn’t stop people from buying that LX with a cab when their budget it more in line with a BX.

good points. As you say about over your heads for some. I have made good decisions for the last 30 years and had the funds. This offer wasn't even brought up nor did I ask. Retiring Id rather pay up front than payments. Thats Fixed costs like payroll. I think age of person plays role as well.
I didn't know can finance Implements. I was though warned of buying used. Like in your case you said you financed it. With no title you CAN sell quit making payments. They will find the tractor and make that person assume the debt plus what they paid you. That scared me off of used late models.
Sure you could fight it legally but not worth it.

 

[Ridelght]

I had a very positive and easy experience with State Farm recently when the barn collapsed. They paid out within a few weeks and gave me way more than I ever expected for a structure I was going to tear down and rebuild anyway.

Maybe Homeowners different. I have Allstate for that. I crunch numbers like Ebeneezer Scrooge. Bundling either way not worth it yearly. Discount on 1 thing was added to other in my opinion.
Truck thing was a joke. Bed is 6 foot, Suv or Truck caught front of wheel opening back. Quote was 2500 to pound out Lots of Labor and filler. Or 3000 for new entire side. I made a lot of calls to corporate. Had them last 20 years no claims or tickets. Covid they quit sending out adjusters, looked at pics sent me email and check minus deductible and closed the claim.
Body shop dude said that's the new norm. Regardless of company.

 

[fried1765]

Maybe Homeowners different. I have Allstate for that. I crunch numbers like Ebeneezer Scrooge. Bundling either way not worth it yearly. Discount on 1 thing was added to other in my opinion.
Truck thing was a joke. Bed is 6 foot, Suv or Truck caught front of wheel opening back. Quote was 2500 to pound out Lots of Labor and filler. Or 3000 for new entire side. I made a lot of calls to corporate. Had them last 20 years no claims or tickets. Covid they quit sending out adjusters, looked at pics sent me email and check minus deductible and closed the claim.
Body shop dude said that's the new norm. Regardless of company.

Auto insurance companies will ALL always low ball on the 1st try.
I have found it very useful, to do a little homework, and not just jump into a settlement.