How to finance your fleet

How to finance your fleet

As a division of the company that builds the equipment, John Deere Financial is uniquely and ideally placed to provide a full range of financing options for John Deere golf course and other turf maintenance machinery sold by the company’s dealer network.

“We are committed to finding the right financing solutions for all our customers, particularly in the current economic climate,” says John Deere Financial’s UK general sales manager Cameron Renwick.

“Financing new equipment can help any business to forecast and fix their capital investment costs, while also taking advantage of the latest available technology. The programmes we offer are designed to help golf clubs and other customers to access the finance they need to purchase new equipment and keep their businesses running efficiently and cost-effectively.

“These competitive finance solutions can be tailored to suit the individual cash flow needs of the business and provide flexible and affordable ways to maintain a reliable and up to date fleet of top quality equipment.

“They are also designed to make it convenient for customers to acquire the latest technology, such as hybrid electric mowers with Quick Adjust cutting cylinders or advanced amenity turf sprayers, which are also backed by dependable service and support from the local John Deere dealer.”

Financing packages can also include dealer maintenance and repair cover for selected machines. John Deere’s PowerGard coverage options enable dealers to carry out a complete maintenance programme to a fixed budget, depending on the plan chosen by the customer.

“In recent years we have found that an increasing number of golf clubs, worried about the rising cost of maintaining and servicing older machines, are taking up replacement finance schemes,” says Cameron.

“Instead of buying one or two items of equipment each year for cash, a financed package deal can enhance the entire turf maintenance fleet by spreading the cost over a fixed period – and another benefit is there will be an immediate improvement in the quality of finish, something club members and visiting players notice straight away.”

In any purchasing deal involving finance, it is important that a total package is discussed from the very start.

Things such as the dealer network and parts back-up, the machines and their suitability for the job, warranty and finance are only some of the areas that need to be considered, and all have an effect on the final outcome.

The first and main criteria any operator or manager of equipment needs to fully understand are exactly what machines are being used, what workload they usually encounter, how they have been funded previously, what (if any) replacement plan is in place and what is being spent each year on new equipment, spares and repairs.

While many owners and operators do have a handle on their annual budget and the cost of spares and repairs, the often huge expense of downtime is rarely accounted for. With a planned replacement programme, this key element of the whole life cost can be predicted far more effectively.

With John Deere equipment, for example, carrying a two year warranty, this means on a three year replacement programme you can fairly accurately predict most of your costs for the first two years. A tailored finance plan matched to the life of the machine means that replacements can be made at the right time before any major costs are incurred.

John Deere Financial offers a choice of hire purchase, finance lease, operating lease and contract hire with maintenance. The leasing and contract hire options in particular can help those clubs that operate on a partial or full VAT exemption basis. These options allow clubs to pay VAT on the repayments, which can help cash flow enormously.

Another significant consideration is that when equipment is bought for cash, if the customer cannot claim back the VAT, the full amount including VAT has to be paid; whereas with operating lease or contract hire, John Deere Financial can calculate repayments on the pre-VAT amount because it holds the title to the goods and can claim the VAT back.