Hour vs VAlue???

   / Hour vs VAlue??? #1  

cgreenway

Member
Joined
Dec 11, 2008
Messages
44
Location
Tennessee
Tractor
09 Kubota B3030HSD-F
I have a friend looking to buy a used tractor, and was worried about the usage hours as opposed to the year??,I bought a used with less than 200hrs and it's like new, but it sometimes make you wonder a 3 /4,5yr old tractor with 30 or 40 hrs or less, so how much of a depreciation do you think hours make when buying used, thanks,
 
   / Hour vs VAlue??? #2  
Tractors don't depreciate like autos do. I've seen 20year tractors going for about 2/3 to 3/4 of a new machine. It's more important (to me) to know how well the machine was maintained. One reason I bought new was I didn't like the used models around here and also they wanted essentially the same price as a new machine. If warranty and dealer maintenance is important then buy from a dealer and most likely you'll be buying new.
 
   / Hour vs VAlue??? #3  
Any type of vehicle depreciation is dependant on the following:

1. Average annual change in new vehicle pricing

2. Market impression of reliability / durability

3. Mean cost to repair the type of vehicle once out of warranty


Having been in the off-road equipment manufacturing industry for 11 years, I've seen the following depreciation trend on tractors:

1. While still in warranty period, the hours are the greatest influence of resale. Most potential consumers feel that if they can pick up a machine and shake it out with a portion of warranty in place, they are safe.

2. Once out of warranty, age and hours will reduce the resale roughly the same amount.

3. Once a new style model comes out (major new model, not just a BX2350 to BX2360 type upgrade), the old model will take a drop in resale.


So, looking at a BX2350 as an example, here's what I predict is the average midwest depreciation:
0. On the lot - tractor has cash price of $13,500
1. Drive off the lot - tractor loses 10% of its value in the first 25 hours of operation. Tractor worth $12,150
2. In the 3 year warranty period, tractor loses additional 25% of its value. Hours may swing this up or down about 7%. - Tractor worth about $8700.
3. When tractor is 5 years old, it is worth about 60% of what it was purchased for (including attachments). Tractor worth about $8000.
4. When tractor is 10 years old, it is worth about 40% of what it was purchased for. Tractor worth about $4000
5. When tractor is 20 years old, it is worth about 20-30% of original purchase
. Tractor worth about $3000


I'm not considering the 'oh man my brother sold his 25 year old Kubota for as much as he paid new' stories. I'm talking about taking a 10% sample of the tractors sold in the midwest, and what they are selling for on the market.

My 2 cents,

IowaAndy
 
   / Hour vs VAlue??? #4  
One of the most important thing to look at is ,was it used comercialy. Did a landscaper who abused it own it or did the the guy down the road who mowed 5 aces own it. The hours could be close but amount of life left wouldnt be close.
Bill
 
   / Hour vs VAlue??? #5  
Here's an example in 97 I bought a 92 ford 1920 with 700 hrs for $14,000. Last month I traded it in with 3150 hrs on it and the dealer still gave me $10,000 against a used tractor for it. The model year doesn't mean a heck of a lot for tractors the condition and hrs are what most people and dealers go by.
 
   / Hour vs VAlue??? #6  
Sometime the price actually goes up. I have a 1948 Ford 8N. new the tractor sold for about $700, I bought it in 1983 for $1700 and a neighbor recently sold one in about the same condition as mine for $2300.
 
   / Hour vs VAlue??? #7  
Buy a new car, tow it to a demo derby and crash it in every way possible. Total hours 1. What's the value compared to a 10 year old car owned by Great Aunt Matilda with 100 hours on it? First thought should be the prior use then condition then hours then year.

The sweat spot on used tractors seems to be in the 1000-2500 hour range and 7-12 years old. You can sometimes find newer or fewer hour machines, but not often.

A side thought is what maintenance has been missed on a tractor with 10-50 hours per year? Some forget that you accumulate moisture in fluids with time not usage etc.
 
   / Hour vs VAlue??? #8  
Any type of vehicle depreciation is dependant on the following:

1. Average annual change in new vehicle pricing

2. Market impression of reliability / durability

3. Mean cost to repair the type of vehicle once out of warranty


Having been in the off-road equipment manufacturing industry for 11 years, I've seen the following depreciation trend on tractors:

1. While still in warranty period, the hours are the greatest influence of resale. Most potential consumers feel that if they can pick up a machine and shake it out with a portion of warranty in place, they are safe.

2. Once out of warranty, age and hours will reduce the resale roughly the same amount.

3. Once a new style model comes out (major new model, not just a BX2350 to BX2360 type upgrade), the old model will take a drop in resale.


So, looking at a BX2350 as an example, here's what I predict is the average midwest depreciation:
0. On the lot - tractor has cash price of $13,500
1. Drive off the lot - tractor loses 10% of its value in the first 25 hours of operation. Tractor worth $12,150
2. In the 3 year warranty period, tractor loses additional 25% of its value. Hours may swing this up or down about 7%. - Tractor worth about $8700.
3. When tractor is 5 years old, it is worth about 60% of what it was purchased for (including attachments). Tractor worth about $8000.
4. When tractor is 10 years old, it is worth about 40% of what it was purchased for. Tractor worth about $4000
5. When tractor is 20 years old, it is worth about 20-30% of original purchase
. Tractor worth about $3000


I'm not considering the 'oh man my brother sold his 25 year old Kubota for as much as he paid new' stories. I'm talking about taking a 10% sample of the tractors sold in the midwest, and what they are selling for on the market.

My 2 cents,

IowaAndy

Interesting. But comparisons covering decades have to be done in constant dollars to be truly meaningful.
 
   / Hour vs VAlue??? #9  
I have a friend looking to buy a used tractor, and was worried about the usage hours as opposed to the year??,I bought a used with less than 200hrs and it's like new, but it sometimes make you wonder a 3 /4,5yr old tractor with 30 or 40 hrs or less, so how much of a depreciation do you think hours make when buying used, thanks,

I bought a 3yr old tractor with 7xx hrs on it.. used it 3ys, and kept it in tip top shape and traded it and got back 93.5% of what i paid in trade. IMHO.. condition makes the most difference.. then age and hours.

high hours on a well cared for machine that has been repair and maintained and is in good order and meets factory specs for compression and oil pressure and hyd flow/pressure.. is still a great machine. Ditto one long in the tooth.

An inexperienced operator can due heavy damage to a 1 day old tractor with 3 hours of use on it.

that said.. i have a 1955 ford tractor with what really appears to be the oem proofmeter on it ( based on paint layer observation ) .. with just over 500 hrs on it. I believe it too.. machine starts ont he first crank, and has 50psi oil pressure, and idles like a kitten... just like a low hour, good condition tractor should.. regardless of the fact that she is 53ys old..

soundguy
 
   / Hour vs VAlue??? #10  
A great deal depends on what model/brand of tractor we're referring to. Certain models command a better resale price. Some brands traditionally resell better. Some brands tank in a year or two no matter what the story.

I've got a few older tractors. My favorite, the MF150 in my avatar sold new for around $4000 (retail) I paid less than that when I bought it new. In "average" condition now, I could get $4500 to $5000. In the shape mine's in, I've been offered quite a bit more. It has a shade over 3300 hours in 37-3/4 years time. In my area, a decent 100 series Massey is money in the bank.

My 2440 Deere sold new for just a tick over $10,500 in '79. I've turned down $12,000 in the last year. It has over 4800 hours. This model is a great seller.

2 year old Deere (which traditionally resales well) 6430 with over 4500 hours in a short time is valued around $4000 to $5000 LESS than new price because of excessive hours on that new of a tractor.

Then we get into WHO's "buying". Is it a dealer's trade value? How about an individual with cash? And ANYTHING is worth what you have the nerve to ask and the ability to sell.
 
 
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