Heavy-equipment manufacturers are shaping financing and deployment strategies for new machinery hitting the market.
OEMs are encouraging dealers in some states to take advantage of financial incentives to bolster sales of new electric machinery, Brady Lewis, North American manager of emerging products & technology at Case Construction Equipment, told Equipment Finance News during the 41st annual Equip Exposition in Louisville, Ky., last week.
In California, customers can receive up to $500,000 for agriculture and construction equipment through the Clean Off-Road Equipment Voucher Incentive Project (CORE), which helps offset the higher prices of EV equipment versus diesel.
CORE is “a very high-dollar, high-value incentive program where we’ve had some good success selling our 580 EV backhoe loader,” Lewis said. “There are other states that have similar programs, but none of them are quite as generous as what California is putting on the table.”
The CORE program provides up to $290,000 toward the 580 EV backhoe loader that Case launched in August, according to its website. Colorado also has an incentive program for electric machinery, “but it requires the customer to take a diesel machine out of service,” Lewis said.
Racine, Wis.-based Case has released five electric products and plans to market several new electric mini excavators, he said.
Low-interest financing
OEMs are working with their lending partners to help customers overcome the high interest rates that have hampered the equipment finance sector for nearly two years. Some lenders are offering 0% financing for new equipment, Trevor Koolmees, product group sales manager at Pella, Iowa-based Vermeer, told EFN at the event. Vermeer makes agriculture and industrial equipment.
“Most of the people that you interact with in the landscape industry, they typically don’t have the cash on hand to buy a $40,000 piece of equipment,” he said. “They want to deploy capital to other things, and they want to typically stretch out those payments and obviously pay as little interest as possible. So, we are running 0% financing on a number of the pieces that you see here at the show.”
Vermeer exhibited new equipment that ranged from about $11,000 to $80,000. The company’s primary lending partner is global equipment financier DLL, Koolmees said.
Construction and landscaping equipment manufacturer Toro is offering promotional financing through Sheffield Financial to keep rates as low as possible for new equipment, Toro Regional Sales Manager Chad Aust told EFN. Promotional financing allows customers to pay no interest for a short period, typically six months to a year.
Toro’s highest-priced unit on display costs roughly $70,000 new. The company also works with subprime lenders to accommodate borrowers with lower credit scores, Aust said.
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