“Raising interest will have a direct impact on financing cost for stock, both equipment and parts. A dedicated stock managing program will be even more important than before. Also on the customer side we will see an increasing importance of retail programs.”
– Christian Mitterdorfer, Titan Machinery, Vienna, Austria
“Rising interest rates will hurt gross sales of equipment as the higher interest will have to be considered more in the initial purchase. Dealers who are paying interest on equipment will either have to raise prices or take a hit to their bottom line to absorb the extra cost. I would say dealers will stock less equipment to try to protect themselves from paying interest on equipment.”
– Sherry Crowe, Henry County Supply Inc., New Castle, Ky.
“The high rates of interest have a relevant negative impact on the business profitability and also, the banks’ quota, demanding you to improve your finance engineering. In the Argentina market, to have volume selling agriculture machines, you have to buy used equipment. And with the high interest rate the finance cost is huge, given that this high interest affects farmers’ businesses, decreasing the demand, decelerating the turnover stock and increasing dealer financial cost. Learning from similar experiences in 2019, we would be very careful with used equipment valuation, basing ourselves on the high financial cost beside normal recovering cost.”
– Fernando Nebbia, Venturino John Deere, Cordoba, Argentina
“A combination of high interest rates and inflationary prices are causing grain farmers to delay purchases here in Delmarva (Delaware/MarylandVirginia). I expected more year-end purchases than I am seeing to avoid taxes. With customers’ equipment getting older than normal and the values of used not keeping up with new price increases plus interest, the spread between new and trade value keeps getting wider all the time!”
– Mark Reichlin, Hoober Inc., Middletown, Del.
“Certainly rising interest rates are cooling our customers from making large purchases. Along with raising prices and lack of available products, our sales have slowed considerably. The problem is there is not much we can do about it because we don’t control prices or interest rates so we just have to work our way through this downturn the best we can and be there for our customers.”
– Alex Lush, Connect Equipment, Ontario, Canada
“We are only a small dealership, and never relied on company floorplans for used or new equipment. We used our own capital, therefore higher interest does not directly affect our bottom line. But higher interest rates will have a ‘slow down’ on some purchases, I would guess 5% of the sales will take a hit.”
– Richard Badrick, Badrick’s Service & Sales, Miles, Iowa
“Rising interest rates have completely stopped about 90% of potential buyers from being able to afford a tractor when financing. In an industry where 90% of your buyers are utilizing financing, when interest rates jump like they have in the past 12 months, a customer who could have afforded a $300 payment, is unable to purchase the same unit that carries a $400 per month payment now. Walk-in traffic is all but non-existent as well. The current administration has road blocked what was a roaring economy with customers who could afford a purchase. We now have a horrible economy with much less customer interest and affordability.”
– David Seals, Foothills Tractor, Centre, Ala.
“I have certainly seen some pull back from buyers who are reluctant to finance equipment at the higher rates. In recent history, we were able to use the lower rates as a selling tool to complete a deal, where now it is something that may stop the deal from happening. Customers are utilizing the low rate financing options the manufacturer offers even when the equipment costs more initially because it will be cheaper over the life of the loan with the lower rate compared to standard financing rates.”
– Zach Gooder, Koshatka Farm Equipment, St. Protivin, Iowa
“Over 99% of our financed tractors are completed through Kubota Tractor’s finance.
Kubota offers 0% financing, so other than a customer not meeting Kubota’s criteria for obtaining finance, interest rates have not impacted our ability to sell our tractors.”
– Jeff Smith, C&N Tractors, Watsonville, Calif.
“The rising interest rates have killed our retail business, especially small compact tractors. People with money have stopped buying because they’re afraid of having no available extra cash. Small things like chainsaws and snow blowers are not moving. People are looking out for themselves and family, and they have no disposable income. Most are living paycheck to paycheck, and people with any extra money have someone to do their odd jobs for them.”
– Ted Frost, Frost Farm Service Inc., Greenville, N.H.