Interest rates are a critical factor in financing decisions for agricultural equipment. Given climbing machinery prices and higher borrowing costs, it’s no surprise buyers gravitate toward companies offering the most competitive rates.
But with shifting sales cycles and the rise of online equipment sales, generating repeat business isn’t just about offering attractive rates and terms. Building a loyal customer base requires meeting producers’ needs where and when they choose to buy equipment.
Recent AgDirect survey data highlights the important role dealerships play in driving machinery financing decisions.
Producer purchase and financing preferences
According to a 2023 nationwide survey of nearly 900 producers, most farmers start thinking about their financing options when talking with their lender ahead of a purchase, at the dealership or when researching what equipment to buy.
With the rapid increase of online auctions and digital marketplaces, producers have more opportunities at their fingertips to explore their machinery purchase and financing options. Although many producers are turning to online platforms like TractorHouse and AuctionTime, the survey revealed purchasing equipment at a physical dealership remains the top choice.
This trend extends to the used equipment space. When asked about their most recent equipment purchase, around half of respondents indicated they bought used equipment, and the vast majority of these acquisitions were made through a dealer.
There has also been a notable rise in the number of producers choosing to finance their equipment. Among the respondents, 73% reported financing their most recent equipment purchase instead of paying with cash.
This marks a significant increase in equipment financing over the past decade. In 2019, 64% of respondents financed their equipment purchases, and in 2015, only 41% opted for financing.
Additionally, the survey confirmed financing at the dealership takes the lead as the preferred financing method, closely followed by applications at the lender's office.
Drivers of dealer satisfaction
Market insights from the AgDirect producer survey indicate farmers often initiate their equipment purchase and financing journey through interactions at local dealerships. The findings underscore the importance of strong partnerships between dealers and financing companies.
AgDirect works with a network of more than 4,500 equipment dealers across the United States. In a recent survey of 414 equipment dealer employees that offer AgDirect financing, 99% of respondents said they were likely to recommend AgDirect to their next customer.
The likelihood of recommending a company is closely correlated with customer loyalty. Survey results showed another competitive strength includes the people working behind the scenes to support customers and dealers throughout the financing process.
“AgDirect has always been my number one go to for irrigation financing,” says Lee Leslie, of Butte Irrigation, Inc. “I have always been treated with the utmost respect. And have always had an awesome relationship with the representatives.”
Steven Whistler, sales consultant at Sioux International, Inc. shares a similar sentiment: “AgDirect’s loan process is easier and faster than anyone else's. The staff does a phenomenal job of answering questions and explaining the process.”
Along with knowledgeable and friendly service, dealers shared they value AgDirect’s innovative tools and streamlined processes. Here’s what else dealers say they like about doing business with AgDirect:
• 2-7 year financing terms*
• As low as $0 down & delayed payments
• No prepay penalties**
• No recourse or reserve for dealership
AgDirect offers customized loan and leasing options for both new and used equipment purchased at the dealership, at auction, online (auction platforms and marketplaces) and via private party.
Apply online, check rates, quote payments and compare options at agdirect.com or using the free AgDirect Mobile app available for download from the App Store and Google Play***. Or learn more about AgDirect equipment financing by locating your nearest AgDirect territory manager or contact the AgDirect financing team at 888-525-9805.
*Subject to approval.
**Excludes leases over $500,000.
***Your mobile carrier’s messaging data rates apply. The App Store is a service mark of Apple, Inc. Google Play is a trademark of Google, Inc.