0% Financing vs. Standard Rate with Rebates

Depending Upon Down Payment Amount and Several Other Factors, 0% Financing May Not Be Your Best Deal, and Paying a Little Interest Can Be a GOOD Thing.

It may seem counterintuitive, but paying some interest may actually save a buyer in some cases.  It is a balancing act of sorts, but requires only some simple considerations.  Among these are how long the buyer intends to own and operate the product.  If someone likes to trade every couple years, it may be worth a look at taking the cash discounts in lieu of low rate offers.

Pay Cash for a Tractor?  Who Does That?

More people than you might think.  The reason is that manufacturers really don’t care where the payment originates, any piece of equipment that is “settled for” without using low rate financing is, simply put, a “cash sale”

While many local banks don’t offer financing on the things we sell, thankfully there are lenders that do.  Here in Pine Plains we use several, including CNH Capital, Wells Fargo, Sheffield, DLL and more.  Each of these lenders publishes rates each month, so it is just a matter of “doing the math.”

Another point is the amount of the down payment or trade-in value applied to the purchase.  In cases where a large (typically 30 percent or more) down payment is made, foregoing the low rate program may make sense, as the interest “saved” would not amount to as much as the value of the rebates applied.

Here at Pine Plains Tractor we’re glad to take the time to explain the differences and compare options any time, but it’s not all that difficult.  A look at the calculations we use to compare is described well in this bankrate.com article.

Other considerations may include how long the buyer intends to own and operate the product.  If someone likes to trade every couple years, it may be worth a look at taking the cash discounts and financing through another lender (we use several).  Why?  Because you paid a higher price in order to use the low rate financing.  This means that the loan balance starts higher and takes a while to come down.

So How Do You Know if You’re Getting the Best Overall Deal?

Give Pine Plains Tractor and Equipment, a locally owned and operated dealership with a 50+ year track record of customer satisfaction. a shot at your business.   We’ll both be glad you did!