Tractor Financing Guide (Traktor Lån): Things to Remember


As a farmer, you must be up to date when it comes to the technology you wish to get. Generally, purchasingequipment is one of the largest expenses a farmer will face after getting land. In the last fifty years, sixteen percent of crop value ended up as investment into specific equipment.

The main problem with farms is that revenues tend to decline. This means farmers must make relevant financial decisions when deciding to purchase equipment. You should enter here to learn more about farming association before making up your mind.

The main idea is to determine whether a specific purchase will meet your budget capabilities and overall requirements. Additionally, you must ensure that the equipment meets the growing needs of your farm.

Although farm equipment can feature numerous things from irrigation systems to combines, we decided to present you a brief guide on getting an indispensable piece of machinery required for numerous operations: the tractor.

Tips for Choosing the Best Tractor for Your Budget and Needs

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You should remember that choosing a tractor for purchase is not as simple as it may seem. Of course, if you already know what model and brand you want, the next factors to consider are price and power. The size of the tractor will have an effecton your overall expenses you, therefore, farmers often need to compromise on features and horsepower to fit their budget.

Choosing lack of power in order to obtain lower monthly installments is counterproductive because this choice can result in higher fuel consumption and more time spent on labor that a more powerful tractor would finish faster.

While you should considerthe power of the tractor, choosing a too powerful option for the job you need to handle can lead to serious problems withthe engine and working capabilities, because it may not reach the desired temperature to ensure efficiency.

It does not matter what size of land you have, because it is always better to get a slightly more powerful and bigger tractor than you need. In some situations, you can find used models that will end up cheaper than other options. However, if you wish to get a lower-horsepower and used tractor, you will need to have at least twelve thousand dollars.

The expenses increase as you wish for a better solution because new tractors with 400HP or higher can reach $300,000even more. The main idea is to determine the best tractor for your specific needs, which will help make a wise choice and find suitable financing means. Check this link: How to choose the right tractor for your farm:, Best and top tips for beginners for more tips.

New vs. Used

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Choosing a used tractor is less expensive than getting one directly from a manufacturer, however the price is not the only factor you should consider. Since a tractor is a major investment, you should get a reliable piece of equipment that will provide you with the wanted perspective, while ensuring the best priority. Still, this does not mean you should only get a new model.

Some models can last long, meaning they hold their value after you get them. Therefore, everything depends on what you need, because if you are leaning more toward getting the quality used option to save money before getting a loan or traktorlån, it may be challenging to determine whether you paid the right price for the tractor.

According to experts, accumulated hours of use and age are the most important factors that will determine the value of a tractor. You should know that the average lifespan of a continually used tractor is approximately fifteen years.

When you get a high-hour option, you can stretch the lifespan by maintaining it properly, but you must be aware that spending money on maintenance can accumulate to a point where buying the new one may be a better idea.

It is challenging to determine the precise condition of tractor without professional assessment and inspection. This means you should have access to maintenance logs andinspect six crucial areas including the articulation point, appearance, cab, engine compartment, hydraulic power, and PTO shaft.

When purchasing, ensure that you are certain you are receiving a well-maintained machine for a fair price. It means you should be able to use the plunge the moment you pay for it. However, technological advancement made some old versions obsolete, although they can last longer than the new ones.

Older tractors from the seventies and eighties do not feature hydraulics to deal with front-loaders, which is a vital piece of equipment for farmers. You can choose numerous technologies implemented within the tractor from precision planting with GPS to shiftless transmission.

You should remember that the simplicity of electronic components in older tractors isa temptingfactor because farmers wish to avoid significant repair costs in high-tech tractors. Due to numerous factors such as the sticker price of most tractors no matter the age, it is understandable that farmers wish to purchase a new one that will stand the test of time.

Getting a new tractor will allow you to understand everything about it from the very beginning. Besides, you can find a wide array of technologies and implements you can use. Besides, the new models come with warranties and protection plans that will offer you peace of mind.

The best thing about them is the financing option that will not take the money out of your pockets. Compared with regular vehicles, getting a new tractor will not depreciate the same way. After the first year, value will stabilize, meaning it will depreciate at low and predictable rates depending on how much you use it.

When it comes to acquiring farm equipment, the choice between new and used is crucial. Explore our guide on ‘употребявани трактори‘ (used tractors) to make the right decision for your budget and farming needs.

Financing Options You Can Choose

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As soon as you find a tractor for your specific requirements and budget, you will notice that you must explore different financing options for completing the purchase. Although equipment purchases are not as expensive, meaning you can handle the payment upfront. It makes more sense to finance the right equipment you need for the farm.

Financing comes with numerous advantages that will provide you peace of mind, such as:

  • Equipment financing initial purchase costs and charges are liable for a tax deduction in the form of business expenses.
  • You can expand the farm faster by financing equipment that will become an essential part of your business.
  • You can avoid buying questionable used models and options that do not feature the latest advancements that will save you time and money in the long run.
  • Establish creditworthiness for a business, which will help you ensure future purchases.
  • Save labor expenses and time by buying large equipment for finishing the job.

When it comes to financing your agricultural equipment, you should think about different options available to you. You will have both national and local options. The type you choose depends on numerous factors including the place you reside, credit score, the farm size, the size of the loan you wish to get, and the special program you should qualify for.

Numerous programs and options are available through local lenders, which will come in the form of conventional loans. Therefore, it is a perfect solution to visit a bank branch and talk with a specialist to determine your options.

1.   Conventional Loans

Suppose you are an established farmer with an excellent credit score and history. In that case, you can qualify for a conventional agricultural loan, which will feature fewer restrictions, competitive rates, and straightforward applications. You can use it to purchase either used or new equipment, and the terms can range between one and five years.

You also have an option to look for a local lender or consider national lenders too. The popular option is to work with your current bank, which can offer you more flexibility than choosing someone else. Community lenders can offer you different financing options that will provide you with peace of mind.

2.   Leasing or Financing Through a Dealer

In some situations, dealerships may offer financing with low-interest rates, which is a great option for exploring different deals. At the same time, you can qualify for the best terms based on your preferences and situation.

Generally, a borrower will need a financial record as well as a down payment, which should be twenty percent of the overall amount. If you cannot pay the down payment as you should, the interest you get will be much higher.

Remember that borrowers should be creditworthy and be in business for at least two years. In addition,typically they do not consider used equipment in the equation, meaning you must get a new one to qualify.

In some situations, a low interest rate will apply onlyfor a short introductory period and may apply only to a specific amount of your account balance. Researching the loan before visiting a dealership is the best course of action to avoid high-pressure situations in the future.

Leasing equipment is a specific option you can choose through dealers, and it has become significantly popular. In some cases, leasing expenses are more affordable compared to other options. It means you can lease a $300,000 tractor for thirty thousand dollars per year.

However, when you finish with the loan, the tractor will be yourself. In contrast, leasing is a form of long-term renting, which means the tractor will be returned to the dealer. You will then have the opportunity to buy it for a lower amount than before or lease a new one instead.

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