How tractor finance works
Tractors and farm machinery are often bought with hire purchase or an equipment loan through the dealer or a specialist lender. You repay the price minus your deposit in instalments and own the machine at the end.
Some agricultural finance providers offer seasonal or annual repayments to match farm income. This calculator shows the monthly equivalent.
Worked example
An £80,000 tractor with a £16,000 deposit means financing £64,000. At 7.5% over 60 months, the payment is £1,282.43 a month, £76,945.72 in total.
Interest is worked out monthly at one twelfth of the annual rate. Lenders may calculate interest differently (some charge it daily), so your actual payments can differ slightly.
Tax and VAT
Machinery may qualify for capital allowances, and VAT-registered farms can usually reclaim VAT. Check the details with your accountant.
Inputs for the tractor loan calculator
Tractor price
The price of the tractor or machinery.
Deposit
What you're paying upfront, including any part-exchange.
Interest rate (per year)
The annual interest rate on your finance. The rate shown is only an example, so enter the rate from your quote.
Term
How many months you'll repay over.
CALCULATOR QUESTIONS
Tractor loan calculator questions
Can I spread tractor payments to match the harvest?
Some agricultural lenders offer seasonal or annual repayments. Ask when getting quotes.
When do I own the tractor?
With hire purchase, after the final payment. With an equipment loan, straight away.
Does a bigger deposit help?
Yes. You finance less, so payments and total interest fall.
Can I reclaim VAT?
VAT-registered farms can usually reclaim VAT on machinery. Check with your accountant.