I get this question from nearly every compact utility tractor shopper at my dealership, Midstate Turf & Tractor in Springfield, TN. “Which is really better, 0% or rebates?”
I opened MT&T after nearly 20 years of experience as a service manager working for some of the most brilliant minds in the business. Today I take their knowledge and pass it on to my own customers.
During my 10+ years of being a tractor dealer selling hundreds of tractors, I have concluded 3 things in sales…
- 0% Apr financing is designed and used to take your focus off of the actual price.
- Charges such as dealer “doc” fees and “origination” fees are all but made up.
- Cash rebates almost always outweigh the financing interest charges.
Here is an example of a recent tractor sale at Midstate.
A Kioti DK5010 tractor with Loader has a retail price of $30,990 At 0% APR for 72 months the payment is $430 Standard rate APR Gives us an instant $ 8000 discount $22,990
CONCLUSION: AT STD. RATE 5.5% APR. THE MONTHLY PAYMENT IS $375 $55 LESS. AND THE TOTAL PAYOFF IS $27,043 STILL ALMOST $4000 LESS THAN AT 0% APR!
Another opinion I have is on the crazy long warranties that some companies have recently been offering that aren’t worth the paper they’re written on, But, we’ll save that for another day.