How is depriciation figured on a tractor

[Scott_in_WVA]

When wanting to trade IE: my 2 year old JD 4400 hydro 4 in 1 loader 470 hours on the clock.What and or how do the dealers base there appraisal on a trade? I know generally you are ahead to sell the tractor yourself then go buy cash in hand...but just thought I would ask....any suggestions/tips on trading....?

 

[Gary_in_Indiana]

Appraisals on trade-ins are pretty much the same in any business. You try to put a fair wholesale value on the item being traded. You want to be able to turn around and sell it retail for a profit or wholesale it and get your money back. You do NOT want to be put into a position where you have to retail out of the trade-in to make the first deal feasible. That would force you to sell two to make one profit. Essentially that means you want a figure on it equivalent to what you could go into the wholesale market and buy one outright. That is the trade VALUE.

Now let's talk about the trade ALLOWANCE. That figure is the total of the trade VALUE plus whatever discount the dealer is allowing off the list price of whatever you're buying.

If you can sell yours yourself you should be ahead assuming you can retail it for more than the trade VALUE. One other consideration is your state's sales tax situation. If you're in a state like Indiana, sales tax is figured on the trade difference (e.g. You buy a $25,000 tractor and trade in your $15,000 tractor for a $10,000 trade difference and your tax is figured on that $10,000 difference only). In that case you need to make certain you sell your tractor for more than the amount of sales tax savings better than trading it to make it worthwhile.

In a state like Ohio right next door it wouldn't matter. In the above example you would pay sales tax on $25,000 regardless of having a trade-in or not.

I hope that answers your question. If you want a couple ideas on ways to maximize your deal if you're trading, let me know.

 

[Scott_in_WVA]

Thanks Gary...

 

[art]

The best way to get a good value for your goods is to make them look like new. When the dealer goes to sell he will have to make them look as good as he can and if he doesn't have to than he will allow you more. Remember your trade in will be someones 'new' tractor. Go to a dealer who sells a lot of tractors the size of your trade-in as he will have more potential for a quicker sale. Get several quotes if possible, allowances will vary depending on pricing style. We don't normally work off retail in our company as we have established price's for our sales force to sell from. Every dealer and or salesperson does it a little different

 

[Scott_in_WVA]

Art...I looked at your web site..very nice buisness,did I not use to see some of your posts at jplan.com?

 

[JohnMiller3]

TRACTORS from JOHN DEERE
Model = 4400 HYDRO 4WD

SPECIFICATIONS
Years Mfg: 1998-2001
Fuel: D
Engine Make: YANMAR 3 CYL

CID: 101

Engine HP: 28.5 PTO
35.7 E
Cab: ROPS

No.Speeds: HYDRO

Weight(Pounds): 2,900

List Price: $19,430

PRICING
Year Ad Price Est.Loan Value
1998 $15,350 $10,131
1999 $15,738 $10,387
2000 $16,127 $10,644
2001 $16,710 $11,029

Auction Results

JOHN DEERE 4400 $13,900.
Condition: E Comments: D 280HRS
~~~

First pricing is very regional… no such thing as one price for all…

I’d call some local dealers in your area within a say ~~~ 50 mile radius and ask if they have any “used” JD 4400 or 4300 w/ldr on their lot… and “how much”? This should give you a ball park figure for “your” area… Now the dealer needs to make some money and warranty your unit with the next buyer… so deduct another $2-2.5K off those prices and that’s what it will be worth as a trade-in… “in your area”…

You may want to pop an ad out in the local paper and see if you can sell it privately… cause “cash” is king versus a trade-in… armed with some of the above info, you should be able to walk into any local dealer and be able to talk intelligently on a new unit and trade-ins… /w3tcompact/icons/smile.gif

 

[Scott_in_WVA]

Good information John.

 

[Gary_in_Indiana]

Scott, I stopped to see my tractor dealer buddy today and he happened to have a 99 JD 4400 with FEL and, believe it or not, 470 hours on it! The one big difference I noted was that it was a Sync Reverser instead of an HST. It sure looked to be in better than average condition. He told me they were asking $16,000 for it (which he said he thought was high by about $3,000) and had put $10,000 in it to trade for it.

As has been said, prices are a regional thing. Those numbers could be high or low for your area and, in either event, you'll have to adjust for the transmission difference.

Had it been an HST, I'd have been tempted to see about swapping my newer 4200 with FEL and 100 hours and keeping my backhoe. /w3tcompact/icons/smile.gif Probably just as well it wasn't. /w3tcompact/icons/laugh.gif

 

[Scott_in_WVA]

Thats ironic...same hours/size and loader.That gives me something to think about...for sure.
How far away from the Ohio/Indiana border are you Gary?

Scott

 

[Gary_in_Indiana]

Just half an hour on Highways 14, 24 or 30. Just an hour from Michigan on I-69, too. /w3tcompact/icons/smile.gif