Financing a mower?

Discussion in 'Lawn Mowing' started by TopQualityLawnCare, Feb 4, 2013.

  1. TopQualityLawnCare

    TopQualityLawnCare LawnSite Member
    Posts: 115

    Yea I saved 5000 last year with out doin my business it'll be more then a grand or I won't buy a new truck it was just a guess I always wanted to get me a z71 but decided to build my business up first my cousins said that was a very wise decision and mature I believe there right . Yea ill make sure ill be able to afford the payments or I won't get it
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  2. hi_speedreed

    hi_speedreed LawnSite Senior Member
    Posts: 534

    Lets see if I can translate your large run on sentence. You want to buy a used mower with cash. Next you want to get a credit card to purchase your gas and build credit. Then, at the end of next season you want to finance a used mower, put $1k in the bank and get a new truck. So far have I got it?

    Credit is a tool. Much like a skilled butcher using his tools to break down a side of beef. When he is done it is no good meat is left on the carcass and everything is uniform. Give his tools to someone who has never seen a primal cut of meat and they will show you another meaning of the word butcher. If used correctly beautiful things can happen. In the wrong hands it is a disaster.

    If you are able to build enough credit in order to qualify for an equipment loan know the rate on used equipment will not be the same as for new. You will pay more interest to the bank than you would on a loan for new equipment. Take that knowledge into consideration when purchasing.

    Lets say you are looking at a mower that is $10500, at 0% for 48 that is $218.75 if you were to buy a used mower your rate is going to be around 5% and only for 3 years. So if you were able to buy a quality used mower of the same size as the aforementioned new mower, for around 6500 @5% for 36 months your payment would be $194.81 which would have you paying a total of $7013.16

    Only you know your bills. I don't know if you can afford a truck. If your truck runs, I would not recommend getting a new one. I would only recommend getting rid of a paid for vehicle if the cost of needed repairs were greater than the value of the vehicle and even then you have to weigh your expenses. It might still be better to keep your vehicle. Always do the math both ways. It sometimes will surprise you and not be what you assumed would be cheaper.
     
  3. lawnman3

    lawnman3 LawnSite Member
    Posts: 44

    very well said my friend...
     
  4. inzane

    inzane LawnSite Silver Member
    Posts: 2,348

    how many customers do you have now? bowling green huh? i've been there a few times my wifes family is from scottsville. what type of truck and equipment do you have now? all i'd say is be careful with the financing, i financed way to much when i started the first time in 04, it made everything so much more difficult. If you know you can pay it back for sure fast, might not be a bad idea if you can get the 0% interest deal later on.. mabee by then your business will be rolling good and your credit will be built up.

     
  5. TopQualityLawnCare

    TopQualityLawnCare LawnSite Member
    Posts: 115

    I'm just starting so none check out my thread I made for my business it has my equipment yea and ill fire figure if I can afford it or not I just won't go in and finance I'm better then that
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  6. TopQualityLawnCare

    TopQualityLawnCare LawnSite Member
    Posts: 115

    Didn't mean to put fire
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  7. inzane

    inzane LawnSite Silver Member
    Posts: 2,348

    i checked out your thread, looks like once you get a mower you'll be set. good luck to you.
     
  8. TopQualityLawnCare

    TopQualityLawnCare LawnSite Member
    Posts: 115

    Thanks alot man going to look at a mower Saturday
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  9. MOturkey

    MOturkey LawnSite Silver Member
    Posts: 2,742

    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.
     
  10. weaver

    weaver LawnSite Bronze Member
    Posts: 1,276

    Processing fee....
     

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