To Finance or Not to Finance…That is the Question!

“Would I be better off paying cash or financing”?    I get this question a lot.  No one knows your financial situation as well as you do, but here are a few tips that may help you to decide which option might work best for you.

Cash Discount:   This is a discount in the selling price if cash can be paid.  If you’re money is in the stock market right now & loosing ground, pulling your money out & investing in a tractor may be a more solid investment long term.

Documentation Fees.  Some financial companies charge documentation fees.  I’ve seen these as high as 3% of the financed price.  Even if the primary finance rate is 0%, this is an additional fee, so in the long run; you’re paying more for the equipment than if you’d written a check.

Payments.  Many people don’t like the hassle of having to make payments each month.


Establishing/Rebuilding Credit.  Credit is Power.  0% or low interest financing is a great way to establish or rebuild your credit.  

Drawing Interest.   If your money is drawing interest at a good rate, or making money in the stock market; leave it where it is.   Make your payments out of your current income.

Lump Sum.  Let’s face it, equipment is a large expense.  Financing gives you the flexibility of paying off your purchase over time rather than one lump sum, thus not draining your savings & keeping your cash on hand.

As I said, no one knows your financial situation better than you.   Your best bet is to try to look at your whole financial picture before you decide what option is best for you in the long run.