Fendt at huge reduction!!!

[Clive]

It’s not illegal if the purchase price is set first. It’s only illegal if it’s backtracked after an initial advertising campaign. Even then proving it wouldn’t be easy due to hundreds of different levels of spec and tyres of service/warranty package.

As for the customer always pays, yes that’s what I’m saying in reply to Rob who said the manufacturer pays the finance. They don’t the customer does if it’s a 0%.

This is why I never ever offered any kind of finance as it’s a very grey and confusing area. It was always best to quote the best price and then let the customer sort out finances themselves. Sometimes you got paid by a finance house and sometimes by the customer.

It would be hard to prove but be clear its is illegal to offer 0% finance and then offer a discounted cash price to a customer

 

[warksfarmer]

It would be hard to prove but be clear its is illegal to offer 0% finance and then offer a discounted cash price to a customer

I very much doubt there’s ever been a prosecution in the uk over it and would go as far as saying it happens all the time.

 

[Clive]

I very much doubt there’s ever been a prosecution in the uk over it and would go as far as saying it happens all the time.

I think there has - If I recall correctly Bristol Street Motors got in a lot of trouble over this years ago ?

 

[warksfarmer]

I think there has - If I recall correctly Bristol Street Motors got in a lot of trouble over this years ago ?

No idea can’t say I’ve heard of that. But I’m mainly referring to AG to be honest.

 

[Martin Holden]

It would be hard to prove but be clear its is illegal to offer 0% finance and then offer a discounted cash price to a customer

It is indeed. Goes back many moons ago when a car brand for caught out advertising 0% finance or cash discount. May be over 20/25 years ago now.

 

[Ashtree]

Hi Davey,
This is how it works.
selling price of £132,000.
Retail price of £195,000.
Trade in of £70,000
balance £62,000
Amount able to finance over a 1+2 (three payments at 0%) based on 50% of retail £97500.
So the balance to pay of £62,000 fall within this.
£62,000 Divide by 3 = £20,666.67
1st payment of £20,666.67 and all the vat on signing.
If its annuals then next payment of £20,666,67 in July 2021
Final payment in July 2022

That is a very very rough simplified version of how it works.

Or pay £132,000 Cash on delivery. If you have £132,00 sitting in the bank. It is better to use the manufactures 0% finance scheme. Only real difference is you dont own the tractor until the final payment unlike if you pay cash.

Blimey. Every day is a school day, especially for us small farmers. The discount alone of £62k, between list price and retail price in this case, would trade every piece of equipment I have including tractor, for a whole new set of equipment. Her indoors could get that new cooker she’s threatening with the change left over.

 

[tw15]

There's one on the 'Offers' page ....

New Fendt 824 Power Version
240hp, 50kph

yours for £132,000!!

Or you can take advantage of our 0% finance offer...
One-off payment of £62,607.12
Followed by 22 monthly payments of £4358.31

However, if you add those figures up it comes to very near £158,500, which is quite a bit more than £132,000 so it is a bit disingenuous to print it under "our 0% finance offer" headline. The reason is, of course, that £132k is way more than 50% of the list price. However £62,607.12 is being paid in advance, so the actual amount financed is 'only' £69392.88, which is way way under 50% of retail. Retail is £209,200.

There's surely no justification for charging £26500 in interest for a 24 month loan of under £70k. I mean, it's nearly 40% of the amount borrowed or £20% per year. It would be cheaper to put the £70,000 on most credit cards. Nice little earner if you can get away with it though.

If this is taking advantage of 0% finance I dread to think how much 'normal' rates would be.

No wonder a lot of farms are in the red most of the year .If anyone is daft enough to take them up on the deal they really should seek some advice from their accountants .

 

[redsloe]

pay £132,000 Cash on delivery. If you have £132,00 sitting in the bank. It is better to use the manufactures 0% finance scheme. Only real difference is you dont own the tractor until the final payment unlike if you pay cash.

You forgot your 70k trade in!

 

[Sid]

I think there has - If I recall correctly Bristol Street Motors got in a lot of trouble over this years ago ?

It is indeed. Goes back many moons ago when a car brand for caught out advertising 0% finance or cash discount. May be over 20/25 years ago now.

IIRC it was PSA

 

[daveydiesel1]

You forgot your 70k trade in!

But ud need a trade in that was nearly new to be worth 70k. Most second hand tractors bein traded in are worth between 25-40k

 

[hintonroadhero]

Technically it is 0% as its costing you nothing to borrow. The finance is being paid for by the manufacture. Technically if you buy it at £132k with your own cash you arent borrowing so its irrelevent. Offering to have no fiance and pay £126k is another ball game......

Rob..looking back if I had no fiancé (who eventually became my wife) I think I would have paid the 126k....think by now I'd be better off financially !!!!!

 

[Robt]

Damn you auto correct . pansy!

 

[Robt]

It works on pansy too

 

[Cowabunga]

It’s not illegal if the purchase price is set first. It’s only illegal if it’s backtracked after an initial advertising campaign. Even then proving it wouldn’t be easy due to hundreds of different levels of spec and tyres of service/warranty package.

As for the customer always pays, yes that’s what I’m saying in reply to Rob who said the manufacturer pays the finance. They don’t the customer does if it’s a 0%.

This is why I never ever offered any kind of finance as it’s a very grey and confusing area. It was always best to quote the best price and then let the customer sort out finances themselves. Sometimes you got paid by a finance house and sometimes by the customer.

The subsidised finance is there whether it is taken up or not by the customer on big brand machinery. It is illegal for the dealer to get cash in-lieu from the manufacturer, whether he passes it on to the customer or not. That is the point.

 

[Cowabunga]

I very much doubt there’s ever been a prosecution in the uk over it and would go as far as saying it happens all the time.

No it does not. Unless you deal with dodgy manufacturers.

 

[Cowabunga]

No wonder a lot of farms are in the red most of the year .If anyone is daft enough to take them up on the deal they really should seek some advice from their accountants .

Read on though, because I made a mistake and they, inexplicably, include the VAT in the first payment, which the customer almost invariably claims back.

 

[matthew]

The finance is most definitely not being paid for by the manufacturer even if it looks like it is on the paperwork. I sold farm machinery for 10 years and saw all the tricks. I lost count the amount of times I had a smug looking finance bod trying to get me to offer customers a 0% finance deal when the reality of it is that purchase prices are inflated to cover it. The customer ‘always’ pays for it every single time.

That Fendt is circa £125k for a cash purchase. The manufacturing cost to Fendt is probably £50k. Fendt then sell to the dealer for about £110k - £115k. That gives Fendt about £60k for R & D, marketing, overheads blah blah blah. Then it’s up to the dealer how much profit they want taking into account their overheads and the fact they need to cover labour warranty repairs etc etc.

Sticky question re the above in bold. Hypothetically - of course.

The tractor advertised in this thread - a 211 with loader - had in the small print a 3 year warranty.

If a buyer purchased this tractor for cash, and warranty was not mentioned at all in the transaction, was that too built into the final agreed price? And subsequently, a failed part was £10 but labour to get at it, £££Ks, does that too skew the price, or the dealer's ability to reclaim labour from AGCO?

It seems very odd to me that a statutory 1 year warranty applies equally to machine costing £70 - £120K as to a supermarket toaster @ £9.99.

Just askin'

 

[Martin Holden]

IIRC it was PSA

I seem to remember an Italian company were also pulled up on this, that’s who I was thinking of.

 

[Cowabunga]

The companies I used to deal with stopped giving extra discounts, which were in the form of a cash claim paid to the dealer if the 0% finance was not taken up, around 2003. Up until then it was commonplace and one or two kept doing it on the quiet for a year or two later. Then it just stopped, probably as a result of court cases mentioned above. It was known to be a dodgy practice well before it stopped, but the customers who paid cash and got a better price liked it.
In the case of some major brands, even when they did pay in-lieu, they never reimbursed the full value of the subsidy but only to a maximum of £600 if I remember correctly. This was 20 years ago!

 

[warksfarmer]

No it does not. Unless you deal with dodgy manufacturers.

I’m afraid it does happen.