A Guide to Tractor Financing

Buying a tractor can be overwhelming, especially when you also need financing. The cost of financing comes down to interest rates. The more your tractor costs, the longer it will take to pay it off. Longer terms mean more interest payments. However, financing can be an important business builder by allowing you to expand your farm. For this reason, financing charges can be tax-deductible business expenses. To learn more about tractor financing and selecting the best model, contact CCR Sales and Service in Essex, Vermont, serving Essex and Burlington. In the meantime, consider the following tips to selecting tractor financing.

Select the Right Tractor for Your Needs

Choosing the best tractor for your needs is not as easy as it might seem. You need to first have an idea of what size of tractor you will need. After that, consider your budget. All of this will ultimately play a role in your financing choices.

If you don't know what brand and model to get, then consider power. Tractor engines are measured in horsepower. The more powerful the tractor, the heavier the workload it can handle. If you plan on using it for heavy-duty work, it's best to invest in something with more horsepower. Also, consider what type of terrain your farm is located on and how much time it takes to get from one area to another.

Buying Used or New

While new tractors will typically come loaded with all the bells and whistles, they also carry a bigger price tag. On the flip side, used tractors may have a shorter life span. After all, they've likely experienced more wear and tear.

That being said, you shouldn't completely dismiss the idea of buying a used model. Many dealerships, such as CCR Sales and Service, sell gently used tractors that are nearly as good as their new counterparts. These used tractors will be less expensive and thus easier to finance.

The Types of Financing

Once you know the tractor you want to purchase, it's time to pick the type of financing. You'll need to consider factors such a credit, the size of your farm, and where you live before choosing a type of financing. The options can be broken down as follows:

Conventional Lender Loans: If you're an established farmer with good credit, you can get a conventional agricultural loan. These loans, which generally have fewer restrictions and competitive rates, usually have terms that last five years.

Loans Through a Dealer: Many dealers offer loans with competitive interest rates. Plus, working with a dealership can be very convenient. To qualify for the best rates, you'll need to put in a downpayment of 20%.

USDA-Backed Loans: The USDA Farm Service Agency offers direct, fixed-rate loans of up to $400,000 with terms of up to seven years. To learn more about these options, contact your local lenders.

Tractor financing can be a complicated process, but it doesn't have to be too stressful. To make sure you're getting the best deal possible, call our crew at CCR Sales and Service, or come by our location at Essex, Vermont. We serve Essex and Burlington, Vermont.