Can You Buy a Tractor on Credit

The short answer is yes, given that the cost of many tractors runs into thousands of dollars, some of the big ones costing upwards of 60 – $70,000 US. For many people the need for a tractor or some type of agricultural machinery is a commercial necessity, and as such getting the right credit deal in order to buy or lease one is really important.

A number of manufacturers have their own specific credit companies, which offer deals to potential customers, normally along the same lines as any commercial bank or credit union. The appeal to someone looking to buy a tractor of using a manufacturers credit company is that they look to purchase the tractor and arrange finance at the same time.

Whilst this is certainly convenient, there is or was the danger that this can blur the financial arrangements, in terms of the purchaser unable to negotiate the best price on the tractor, as well as obtain the best credit terms.

If going down this road, then it is important that the potential customer, at least in his own mind, keeps the two totally separate. Knowing the price of the tractor, both as a list price and a dealership price, as well as the cost of any implements or attachments that may be needed, can be invaluable in terms of knowing what type of deal can be arranged.

In terms of arranging credit, it is always a good idea to have a number of quotations from different companies, as well as the manufacturers and credit company if that is available. All quotations for credit should be approached carefully, as even an application for credit that is theoretical can have an affect on someone’s credit rating if there are too many of them, or they are done at the same time.

Normally two or three quotations is about right, and probably should not affect someone’s credit standing. Any quotation should be done on a like-for-like basis, in terms of the amount is likely to be borrowed, the size of any deposit, the length of time of the repayment period and what interest rate being charged.

Someone’s application for credit will be determined based on the type of tractor and age of tractor is being brought, and also on the credit rating of the individual themselves. Any individual can check their credit rating, normally for free once or twice a year. If they want further information about how their credit score is made up, they may need to pay a fee to one of the major credit rating agencies for that information.

If approaching a commercial lender, then it is a good idea to do this before approaching a dealership. This is simple negotiation. If approaching a dealership with a view to buying a new or secondhand tractor, then knowing what terms are available to them from a commercial lender gives the potential customer a much stronger bargaining position.

It is worth bearing in mind, especially with a manufacturers dealership that if the customer has a strong credit rating, they can, in theory, negotiate all aspects of any credit or finance deal, as well as negotiate additional benefits in terms of servicing and maintenance.

Peter Main is a freelance journalist who specialises in tractors and all types of agricultural machinery, with a special focus on the adaptability of tractors such as an RTV or utility vehicle, or a skid steer tractor.