What does your Tractor cost you per hour of operation.

[MMfrompa]

Hi all, I'm putting a video together for my you tube channel and the title is "Can you make money selling firewood" only reason I'm wasting my time doing so is because someone told me you can't make money selling firewood, and I'm going to prove a point lol. Anyway I have been videoing my process and putting numbers to hours for an honest evaluation. I'm factoring in fuel, chainsaw, chains, log splitter, tractor, side x side and labor (everything I use) My tractor is a Kubota L3901 and here is how I figured my hourly cost. Please chime in with your thoughts.
L3901 with Loader Purchase Price $23,500.00
Value if I trade it with 1200 hrs $12,500.00???
Ownership Cost Per hour would be 23,500 - 12,500 = 11,000 and divide that by the the 1200 hours at Trade and you get $9.16 per hour ownership cost
Then I added 4 dollars per hour for maintenance so every 100 hours thats $400.00 dollars for servicing and other things that may arise
I also added $4.00 per hour for fuel and I'm not even sure what my Tractor burns an hour but I think a gallon per hour is close.

So in review.
Ownership Cost Per Hour $9.16
Maintenance Cost Per Hour $4.00
Fuel Cost Per Hour $4.00

Total Cost Per Hour $17.16 Per Hour

What are your thoughts?

 

[PJSprog]

I think you're already making too many unsubstantiated guesstimates to get an accurate number.
"Then I added 4 dollars per hour for maintenance" - whence came this number?
"I'm not even sure what my Tractor burns an hour" - this should be easy enough to quantify.

You also mentioned labor and other equipment, yet those appear to be excluded from your final tally.

 

[MMfrompa]

I think you're already making too many unsubstantiated guesstimates to get an accurate number.
"Then I added 4 dollars per hour for maintenance" - whence came this number?
"I'm not even sure what my Tractor burns an hour" - this should be easy enough to quantify.

You also mentioned labor and other equipment, yet those appear to be excluded from your final tally.

The labor and other equipment is not included in this thread. This is a tractor forum so I asked about the Tractor. The 4 bucks per hour maintenance is based on buying oil, filters, grease and general maintenance items. I really don't know the fuel consumption and was hoping someone had an idea but apparently you don't know either lol

 

[TheMan419]

Not sure that the $4.00 per hour of operation for maintenance is accurate. However you are on the right thought process to get the number.

Fuel burn you should know by what you use in a day. If I am out running the bush hog my tractor burns just under a gallon per hour..... with waist high weeds on flat ground, the way I drive it etc.

 

[PJSprog]

I really don't know the fuel consumption and was hoping someone had an idea but apparently you don't know either lol

Nope. I've never owned an L3901. Sorry.

Another potential issue is your determination to "prove a point." Makes it tough to be objective when you go in with a strongly set idea. Maybe just collect the data and see what it tells you. Whoever told you that may end up being right.

 

[ning]

I worked up a similar spreadsheet to be able to accurately describe the cost of driving our cars & trucks, for a variety of reasons.
While most of the values are guesses, I've tried to be close by checking records or figuring out how much things cost today. Specific things on the list are similar to your list:

• Fuel costs (mpg)
• Oil change cost (varies some by vehicle; my truck takes 14 quarts)
• Tires (cost for new set vs miles)
• Estimated repairs over the next 10,000mi (based on guesses as to what it may need for the age of the vehicle, etc)
• Estimated depreciation for 10,000mi (not time - I'll have the car during that time regardless so the only issue is how much does putting mileage on the vehicle cost)
• Other required gear cost (motorcycle gloves wear out pretty predictably, and helmets need to be replaced more due to use than time, though time has some effect as well)

It's definitely a useful exercise, even if it's only ballpark. I first did this when a beancounter at an old job balked at giving me the IRS rate for mileage reimbursement, instead trying to arbitrarily choose a value based on what he thought operating a car cost. The depreciation really drives up the cost in many cases.

For what it's worth, when diesel was substantially cheaper out here (California has high fuel costs, and quite often diesel is more expensive than super), my truck with ~14mpg was cheaper to drive by my estimates than our 30mpg compact (its low mpg being partially offset by cheaper fuel, but primarily the lower cost was because the truck is 20 years old and has higher miles already and isn't going to depreciate much!).

Having this sort of information is useful when it's time to do things like rent a truck to move someone (showing that a rental may actually be cheaper than driving), decide if it's cheaper to fly or drive (around here, it's typically a wash for me to fly vs drive for one person - and if you're only flying 400 miles, it's probably not much different time-wise either factoring in parking (costs $ too) time and sitting around waiting for a plane and pickup).

I can see doing this for a tractor being good in that it's good to know that "every hour I'm using isn't free, make it worth it".
Don't forget the cost of tires - figure new cost, divided by life span; it's probably a decent chunk of a dollar per hour.

 

[jeff9366]

I have a Kubota L3560. Purchase price $27,500.

I grease the tractor. I fuel the tractor. My Kubota dealer collects/returns the tractor and performs all other maintenance and repairs. I am charged $50 transportation as part of each service.

I have bent several bits. Brush has ripped loose the HST electrical connections twice~~that area is now shielded.

My Kubota service/repair bills were $1,300 last year. (Mechanic = $70/hour.)

Fuel is $2.00 per hour, + $1.00 per hour when PTO is powering an implement.

I have KTAC insurance @ $1.25 per hour. One insured repair = $250 deductible.

I calculate tractor depreciation at $10 per operating hour, based on low tractor hours (750 hours) previous tractor ownership and subsequent sales. My tractor is a hobby. Cannot claim depreciation deduction when doing my taxes.

I have an umbrella policy for $2,000,000 on my homeowners to at least partially cover me in case burn pile escapes me, within my residential development. $1.50 per hour.

I have about $20,000 in implements.

I believe my tractor operating cost is $30 per hour plus $5 an hour for implements. Undoubtedly higher than most due to dealer transporting tractor and performing all but most basic maintenance.

Cheaper than operating the progression of small boats I used to own.

 

[smstonypoint]

Various ag. economics departments have publications that describe the process for estimating machinery costs. Here's one from Iowa State:Estimating Farm Machinery Costs | Ag Decision Maker. Note that economists, unlike accountants, include opportunity costs.

Steve

 

[StuartDK45SE]

Missing is your cost to hire someone out to do what you are doing. That is why most of us have tractors in the first place because we have tasks that need to get did . These tasks are either by choice, ie the lifestyle we choose to live or a business or a mix of the two.

 

[adventure bob]

Your estimate for cost of ownership per hour should not be based on trade in value... It should be based on tax depreciated value. Theres a couple of ways to do it and each has its advantages and impacts on the value.