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Old 02-08-2013, 01:59 PM
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Originally Posted by MOturkey View Post
Just thought I'd add that just because you have the cash to pay for something, that isn't necessarily always the best option, depending upon your specific situation. Making a larger than normal down payment will sometimes help with financing, and there are times it makes sense to have emergency cash in the bank, rather than have it all tied up in equipment.

Also, the terms of 0% financing is a little misleading. First of all, the company (mower manufacturer) chips in a percent of the money financed, this helps them move equipment. Secondly, the dealer normally has to chip in a percentage also. I currently have a mower financed through Sheffield at 0%. The dealer cost was approximately 2%, which means I could have bought the same mower for 2% less, if I paid cash. This is a relatively insignificant amount, but people need to be aware the costs are there.

Last, but not least, the finance company normally has an additional charge. Not sure what they call it, but it is usually about $150. This is a one time fee they charge for setting up the loan, whatever. If you pay the loan in a timely fashion, they still make some money on the loan. This makes sense. Nothing is completely "free". Of course, what they are really hoping is you won't meet all the terms of your loan, and they will make a killing on late fees, or be able to charge accrued interest. That is why financing often makes sense, but one needs to be sure they can meet the obligation before signing on the dotted line.
In other words there is no such thing as free!
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