Getting best value a matter of interest
Farmers could potentially save tens of thousands of dollars by choosing machinery finance with a lower interest rate, according to Case IH State finance manager Chris Favotto.
Mr Favotto said many farmers negotiated on the price of their equipment but did not pay close attention to the finance rate they were able to lock in.
But he said crunching the finance numbers was essential because the difference between a 0 per cent interest rate and a higher rate could be vast.
As an example, a farmer who purchased machinery with 0 per cent interest finance could easily end up many thousands of dollars better off than one who signed up for a 7 per cent interest rate.
"Say, for example, that a farmer was buying a machine worth $250,000," Mr Favotto said.
"With the Case IH Five Star Deal, which includes 0 per cent interest, they could pay just a few hundred dollars in loan establishment fees and no interest at all.
"By comparison, that same machine could end up costing them over $50,000 more if they signed up for finance with an interest rate of 7 per cent."
Mr Favotto's example is based on a five-year loan term and a deposit of 30 per cent, which could include dealer discounts, trade-ins or cash deposits.
"The actual figure would, of course, depend on the amount borrowed and the individual circumstances of the customer, but whichever way you look at it, the savings are going to be very substantial."
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