Dealers and used tractor pricing

[777777]

Hi all,

Can anyone tell me if there is a point at which a dealer just simply reduces the price on a used tractor and keeps doing so until able to sell it.

Reason I ask is that there are 3 tractors in the area, 3 different dealers and they just seem to stick to same asking price even though has been a couple of years since tractors came on their lot as trade ins.

Case 1) Kubota L2550 -- year unknown, 1200hr, turfs, loader, snowblower, rough cut mower and cab ( no air or heat ). Faded, seat torn up, rusty in spots and getting more rusty as it sits there. Been sitting there for a couple of years getting advertised once in a while and still sitting there at $17K Cdn.

Case 2) Ford 21 hp, year unknown, turfs, loader, softcab, 1000+hrs, not bad shape. Sitting there for 2 years and price hasn't moved from $13K Cd,

Case 3) Ford 1979, 1700 ??, 900 hrs, loader, bushhog. Loader doesn't look like ever even used and dealer says he never knew why loader was bought as the guy only used it for mowing. Some repaint over rust, etc. Price $11K Cdn. Sitting for last 18 months.

These are only a few examples of many.

So, my question, since it is just sitting there on lot not moving, anybody have any ideas as to why dealers will just let them sit there and rot rather than reduce the price to move them. Even is sold at a loss from what was given for as trade in, would think that that would be better than having it just sit there taking up space.

Thanks

Tom

 

[Doc_Bob]

So, my question, since it is just sitting there on lot not moving, anybody have any ideas as to why dealers will just let them sit there and rot rather than reduce the price to move them. Even is sold at a loss from what was given for as trade in, would think that that would be better than having it just sit there taking up space.

Thanks

Tom

Tom, you could ask them? Probably get BS for an answer, but what have you got to lose.

I was lucky and bought from a private seller.
Bob

 

[DavesTractor]

Hi all,

Can anyone tell me if there is a point at which a dealer just simply reduces the price on a used tractor and keeps doing so until able to sell it.

Reason I ask is that there are 3 tractors in the area, 3 different dealers and they just seem to stick to same asking price even though has been a couple of years since tractors came on their lot as trade ins.

Case 1) Kubota L2550 -- year unknown, 1200hr, turfs, loader, snowblower, rough cut mower and cab ( no air or heat ). Faded, seat torn up, rusty in spots and getting more rusty as it sits there. Been sitting there for a couple of years getting advertised once in a while and still sitting there at $17K Cdn.

Case 2) Ford 21 hp, year unknown, turfs, loader, softcab, 1000+hrs, not bad shape. Sitting there for 2 years and price hasn't moved from $13K Cd,

Case 3) Ford 1979, 1700 ??, 900 hrs, loader, bushhog. Loader doesn't look like ever even used and dealer says he never knew why loader was bought as the guy only used it for mowing. Some repaint over rust, etc. Price $11K Cdn. Sitting for last 18 months.

These are only a few examples of many.

So, my question, since it is just sitting there on lot not moving, anybody have any ideas as to why dealers will just let them sit there and rot rather than reduce the price to move them. Even is sold at a loss from what was given for as trade in, would think that that would be better than having it just sit there taking up space.

Thanks

Tom

They might be used for "bait". A customer calls and asks if you have any used 4x4 diesel tractors in stock. "yeah, we have several, come down and look". Then he sells new? Still seems odd though. If something sits on my lot too long, someone is going to get a bargain. Inventory is profitable if it turns, not if you store it.

 

[gordon21]

Are you sure the dealer actually owns them? They could be there on consignment. If so, extra sheet metal makes the dealer look bigger to people as they come onto the lot. The dealer might not have a penny invested.

 

[777777]

Hi All,

Yup, talked to all the dealers and they were trades. That's why I can't understand why they are sitting there doing nothing.
Your right, when I spoke to the guy about then Ford with the soft cab ( New Holland dealer ) I just got a BS answer. Kinda told me well, hours are low and the soft cab is worth a bunch so that's the price. Did point me towards new though with a bigger price so probably would seem like a deal to someone.

Other Ford and Kubota were on Deere lots and these guys are known for being a touch on the pricey side. Their attitudes were that the price. Like it or lump it. Pointed out new also. The 1 Deere lot had a 4110 with loader and mower for 21K ( just recently in ) and he acted like he could sell it tomorrow as it was such a good deal.

Guess my attitude was one similar to Dave's and if it is sitting there, it is loosing money so just couldn't understand it. But, I see alot of it.

Thanks folks.

Tom

 

[Farmwithjunk]

Hi All,

Yup, talked to all the dealers and they were trades. That's why I can't understand why they are sitting there doing nothing.
Your right, when I spoke to the guy about then Ford with the soft cab ( New Holland dealer ) I just got a BS answer. Kinda told me well, hours are low and the soft cab is worth a bunch so that's the price. Did point me towards new though with a bigger price so probably would seem like a deal to someone.

Other Ford and Kubota were on Deere lots and these guys are known for being a touch on the pricey side. Their attitudes were that the price. Like it or lump it. Pointed out new also. The 1 Deere lot had a 4110 with loader and mower for 21K ( just recently in ) and he acted like he could sell it tomorrow as it was such a good deal.

Guess my attitude was one similar to Dave's and if it is sitting there, it is loosing money so just couldn't understand it. But, I see alot of it.

Thanks folks.

Tom

Last fall, I got the crazy notion I needed a NEW tractor. I was looking at selling or trading a couple older ones I have and buying a new cab tractor. I'm one of those guys that knows how much I could get out of about everything I own. That helps me make decisions on how much to spend on repairs and such. So... I shopped for a tractor. Then I started asking around to see what sort of trade I could get out of my older ones. I was shocked. Generally, I was offered around $.45 to $.50 on the dollar in trade, compared to their real worth. And I'm not talking about MY OPINION of worth. I'm talking "stick a for sale sign on it and depend on selling it within a week or two" sort of value. What's that all mean? A dealer looks at things differently than a private sale from an individual. They like to make a quick sale, but if a unit doesn't move for 6 months or a year, they don't get in a panic. They set their price and let it ride until "the right buyer" walks through the door. My dad would buy and sell used tractors, using them for his own needs while they were around. His strategy was to price them at full worth. If and when it DIDN'T sell, he would RAISE the price. Oddly enough, that would usually spark a sale.

Buy low/sell high. Don't panic.

Dealers use higher priced used units to make their new models look more attractive. (Price not too far from used, plus great financing available) And when that used one FINALLY sells at $125% of it's true worth, they've had the "use" of it for a sales aid on the new ones, and still made a bundle. All the dealers I've every known personally will wholesale "junk", or shove it to the back of the lot. They like having a few high dollar used trades "front and center". Most LOVE having a few of the competitors "colors" sitting in their used line-up also. "See how they finally wised up and bought OUR brand"! So that used tractor sitting on a dealers lot isn't loosing near as much as you might think. In fact, it may just be MAKING them money in a round-about way.

All the dealers I'm familiar with are in it to make money. Plain and simple. If they've been at it for very long, they know how to play the game.

About my wanting a new tractor. In the end, I found out what a real value it was to keep my 2 old ones. The rising popularity of small to midsized tractors for home-owner/hobby farm use in recent years has blown the values of used AND new through the proverbial roof.....Until you go to trade your old ones.

 

[Soundguy]

I guess it all boils down to the particular tractor in question that you are trading, and the market for that tractor.. and it's options.

I bought a 33hp 4x4 CUT from a NH dealer, and then turned around and traded it back 4ys later ( still very low hours ) on a larger 95 hp tractor. I was considering selling the 33hp unit to get a better $$ amount than trade.. but figured I'd ask what trade was worth... To my surprise.. the dealer offered me 89.4% of what I paid for the tractor as a trade. I couldn't pass that up.. Of course.. new-ish 4wd CUT's are the hot ticket right now... for many buyers..e tc.

Soundguy

 

[Farmwithjunk]

I guess it all boils down to the particular tractor in question that you are trading, and the market for that tractor.. and it's options.

I bought a 33hp 4x4 CUT from a NH dealer, and then turned around and traded it back 4ys later ( still very low hours ) on a larger 95 hp tractor. I was considering selling the 33hp unit to get a better $$ amount than trade.. but figured I'd ask what trade was worth... To my surprise.. the dealer offered me 89.4% of what I paid for the tractor as a trade. I couldn't pass that up.. Of course.. new-ish 4wd CUT's are the hot ticket right now... for many buyers..e tc.

Soundguy

Also to consider, you were a "repeat customer". There's probably fewer repeats nowdays than years ago.(when there were THOUSANDS more full-time farmers) That SHOULD effect your relationship with a dealer, how much is hard to guess.

 

[Soundguy]

I agree. It probably is/was a factor. I do a decent amount of business for parts and such thru that NH dealer. On the rare occasion that they have had to haul my tractor in for work ( hyd valve ).. I'm sure it also helped to see that it had all NH filters, and belts on it.. etc.

Soundguy

 

[Doc_Bob]

I bought a 33hp 4x4 CUT from a NH dealer, and then turned around and traded it back 4ys later ( still very low hours ) on a larger 95 hp tractor.
Soundguy

Now that is my idea of moving up! 33 to 95!

When you need another son, let me know!
Bob