Investing in compact tractors and lawn mowers can be a significant decision. With various financing options available, understanding the implications of different down payments, loan terms and interest rates is crucial for making an informed choice.
In this article, we’ll explore financing a $25,000 compact tractor, providing examples of payments for both $0 down payment and 10% down payment, across 60-month, 72-month and 84-month finance options with 0% and 1.9% fixed annual percentage rates (APRs).
Understanding Financing Options
When financing a compact tractor package, several factors come into play, including the down payment, loan term and interest rate. Each of these factors can significantly impact your monthly payments and the total cost of the loan.
- Down Payment: The initial amount paid upfront. A higher down payment reduces the loan amount and monthly payments.
- Loan Term: The duration over which the loan is repaid. Longer terms result in lower monthly payments but may increase the total interest paid.
- Interest Rate: The cost of borrowing money, expressed as a percentage of the loan amount. Lower interest rates reduce the total cost of the loan.
Monthly Payment Examples
To illustrate the impact of these factors, let's look at the monthly payments for a $25,000 compact tractor with different down payments, loan terms and interest rates.
$0 Down Payment
|
| Term (months) | Rate | Monthly Payment |
|---|
| 60 | 0% | $416.67 |
| 60 | 1.9% | $437.10 |
| 72 | 0% | $347.22 |
| 72 | 1.9% | $367.66 |
| 84 | 0% | $297.62 |
| 84 | 1.9% | $318.08 |
10% Down Payment ($2,500)
|
| Term (months) | Rate | Monthly Payment |
|---|
| 60 | 0% | $375.00 |
| 60 | 1.9% | $393.39 |
| 72 | 0% | $312.50 |
| 72 | 1.9% | $330.90 |
| 84 | 0% | $267.86 |
| 84 | 1.9% | $286.28 |
Loan Terms and Payment Breakdown
- Monthly Payments: As seen in the charts, higher down payments reduce monthly payments. For example, a 10% down payment on a 60-month term at 0% APR results in a $375 monthly payment, compared to $416.67 with $0 down.
- Total Interest Paid: The interest rate significantly impacts the total cost of the loan. At 0% APR, there is no interest cost, making it the most cost-effective option. However, at 1.9% APR, the total interest paid increases with the loan term. For instance, a 10% down payment at 1.9% APR over 60 months results in approximately $1,103.40 in interest.
- Loan Term: Longer terms result in lower monthly payments but increase total interest. For example, a 10% down payment at 1.9% APR over 84 months results in a $286.28 monthly payment, compared to $393.39 over 60 months, but with higher total interest.
Financing Options
Several options are available to finance your lawn and garden equipment, including special financing rates like 0% interest, cash discounts without financing options and finance programs with cash discounts. To find the lowest cost and best solution for your situation, it's important to work with your RDO Account Manager. They can help you navigate the different programs and choose the one that best fits your needs, ensuring you make an informed decision.
Extended Warranty, Attachments and Implements
Consider purchasing extended warranty coverage, attachments and implements when buying equipment. This varies by manufacturer and finance company, but bundling them with the primary purchase often allows all items to be financed under one contract and rate, which is usually not possible if bought separately.
Understanding your financing options is key to making a smart choice when purchasing compact tractors and lawn mowers. By considering down payments, loan terms and interest rates, you can find the best deal that fits your budget.
Reach out to your nearest RDO Equipment Co. location and speak with an account manager for further information and financing options.
RDO Equipment Co.
Founded in 1968, RDO Equipment Co. sells and supports intelligently connected agriculture, construction, environmental, irrigation, positioning, and surveying equipment from leading manufacturers, including John Deere, Vermeer, and Topcon. With more than 80 locations across the U.S. and partnerships in Africa, Australia, Mexico and Ukraine, we deliver creative solutions so our customers can grow and build the world.
