Hi y’all, I have a mini-ex that I am trying to lease to own to a friend/business owner. My current insurance through Kubota won’t allow me to lease the equipment, as it would breach the contract. Anyone have any experience doing this? And know of a company that would insure in such a situation? Thanks!
Do you fully own the machine, or is there a lien or lease on it?
There is a 30k lien on the equipment.
That is going to be tricky. You need to start visiting insurance agents. Does the loan require that it be insured by Kubota?
No the loan does not. It just requires that the machine be insured.
And yes, I’m starting to see it may not be possible. Tried a couple other insurance brokers who said no. Guess I’ll just have to inform my buddy that we won’t be able to move forward with the deal. So it goes.
I have done something like that with houses before. I don't remember the details of how the insurance worked, but it was complicated and slightly sketchy.
Can you rent it? Not no matter what he needs to carry insurance on it as well
Bit complicated because I will be out of state. So I think the insurer would come down on me for no longer living where the insurance is being provided. Was thinking maybe he could take me on as an employee for a work around? Lol. Stretching it here. Think I may just find another buyer or ask him if he is willing to take the risk for paying off the machine should the insurance be denied in an unlikely case of theft or damage beyond repair.
In the current equipment market I would just sell it. Why bother with the hassle of rent to own with a mini-ex?
Much better if he finds his own financing for it. What happens if his work slows down or something breaks and he decides he doesn't want to continue the lease or wants to lower or to skip payments in slow month's? Could be a good way to ruin a friendship in the right circumstances.
Thanks for the tips guys. I did suggest to him to find financing or a personal loan @Welder Dave . @CM1995 Ahh is it a sellers market right now? I only have 500 hours on the machine and just did all the maintenance to it. Was thinking about selling it for 25% off the cost new. Any tips or thoughts on this? No worries if that's not your department.
It's a sellers market in the southeast currently. Last JM Wood auction I could have sent my 2021 D3 with less than 500 hrs on it and got $35K more than I paid for it. What year and model mini? Thumb, coupler, buckets, cab?
@CM1995 2020 Kubota U35-4 (no cab), thumb, 1' toothed, 2' tooth, 3' flat bucket, 18' equipment trailer and 2021 USMower EX30. Was 86K new (at the time). And wow... that's pretty incredible.
Selling as a package deal or separate? Check machinery trader and click on the high/low average button. Take the average retail price without the high and low then add the average auction price without high and low then divide by 2. That will give you a very average value to start with. No idea what the mower is worth. 18' 14K equipment trailers are running $7-8K plus tax. I bought a 14K tilt back in Dec. for $12K.
With prices being high, there's no reason you should take risk with a lease to own. If the buyer can't afford it, without you carrying the paper, he really can't afford it. And if he can't afford it- why are you wanting to lease to own it to him? Sell the equipment outright and be done with it.
I can see it. It's been pretty slow over the winter month's, can I skip next month's lease payment and start again when things pick up in the spring? You want to help a friend but it can be bad idea. You might get more money selling it to someone else too.
sell it as a package with the buckets, and sell the mower separate because the buyer may not want it, or offer it to the buyer if he wants it,