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Having a very hard time wrapping my head around machinery prices
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Posted 8/8/2022 19:48 (#9787367 - in reply to #9785427)
Subject: RE: Having a very hard time wrapping my head around machinery prices

Nw Iowa
Basically, and I am more acquainted with Deere, if you buy 3 major power units and another head or tillage or what ever but have to reach a total dollar threshold, you receive a 3% discount off of entire order. It is calculated weird as it is not off of net or retail but closer to net. So a 500000 net combine gets a reduced price of 15000 or so. This is off the price of combine not the to boot. So for example if you were trading for 50000, you are now trading for 35000. Same for every piece but you have to order a minimum amount. When I got out of business 4 and half years ago it was 1.2 million of total purchases but now it is 1.7 million. It can get even more complicated than that but that is the .50 cent version. You can talk to your dealer as non of this information is confidential. It tends to work better for higher hr use customers and those that tend to be alittle more leveraged to take advantage of interest frees. The downside is if machinery market changes suddenly for the worst your-to boot price may go up dramatically and you may be forced to make payments on their current equipment which once you lose the gimmicks may be a rude awakening because your per acre costs go up dramatically. That said some guys are artists at this and others are not. Dealers hate to lose these deals because a lot of market share is involved but also hate these deal’s because machinery is usually coming from a bto which is harder to sell and margins are abit thinner. You can check with your dealer about what your brands criteria is to get the discount.
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