Total Cost of Operating A Tratcor

[GregP27]

Hi,

Posted a cost thread in the General Operting forum at the top about total cost of operating a tractor. Found it online and gave the link.

I followed it in Excel and modeled a 4WD tractor that listed for $36k, was purchased for $28k, used 200 hours per year for 20 years, has a 5 gallons per hour fuel burn, and gives the operator $15 per hour, and has industry-standard repair, lubrication, etc. costs. It came out to a total cost over the life of the tractor of about $51.25 per hour cost.

Some of you might want to model your own and try it out yourselves.

No message, just food for thought. I found it interesting, myself, and thought you might, too.

 

[Rock knocker]

Sounds reasonable. That's why I always cringe when I hear what some folks are charging for things like brush hogging. I've heard prices as low as $35/hour. At that price you're paying your customers for your hobby.

 

[GregP27]

I agree. The link makes for a good read and it is easy to do it in excel.

I might never have thought of this myself, but when you find it online and explained quite well, it makes coming up with the numbers easy. I have it in excel if anyone wants to run some numbers by me. Read the link and post you numbers. If it isn't too many people, I'll run them.

Cheers!

 

[jeff9366]

has a 5 gallons per hour fuel burn,

My vintage 2013 Kubota L3560, 37 gross horsepower, consumes .4 gallon of diesel fuel per hour on average without the PTO powering an implement. With the PTO powering an implement L3560 consumes .5 to .6 gallon of diesel fuel per hour. Did you neglect inserting a decimal point?

Did you see this recent thread? http://www.tractorbynet.com/forums/...isons/377826-what-does-your-tractor-cost.html

Here is what I estimated in above thread: "I believe my $27,500 L3560 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."

Deducting $15 per hour for the operator from your $51.25 per hour, and assuming we agree on fuel at around .5 gallon per hour, we are nearly in agreement. Did your calculations include implement(s) used with the tractor?

I understand there can be no ONE definitive number as use and residual value will vary.

 

[Wagtail]

I'll defer my answer and cede the floor to Dr. Steve "smstonypoint'.

It's all a matter of economics. :wizard:

 

[oosik]

Actually, I find there is another factor to consider when making the "cost" determinations. I have never worried about what it costs to have/operate my tractor. And I don't think my situation is unique. In my situation - I'm not be able to leave/exit my property, in the winter, without a tractor to clear my driveway.

I was able to verify this situation just this winter. On Dec 28, after clearing my driveway - I noticed that the fuel return line from the fuel pump had come loose at the pump. The tractor still ran fine but blew diesel everywhere. No problem - I called the dealer and they set an appointment to come out and repair during the first week of the new year. Wouldn't you know - before they were able to come out it snowed and totally blocked my driveway. Well, without a clear driveway the service tech could not reach me and because the tractor couldn't be used, I couldn't clear the driveway. I could have possibly made the repairs myself but I didn't have the necessary parts or tools to do the job.

This condition existed from around Jan 7, 2017 until the snow melted on around March 22, 2017 and I was able to "bust out" with my Jeep. My only real concern was what would I have done if I needed medical assistance. Fortunately, I did not. I have plenty of food and homeowners insurance would cover any loss due to a fire. My son became a little panicked and called around to see if there were any driveway clearing services. There, of course, are, but none that would come out this far and the cost would have been prohibitive.

The dealership finally made it out - fixed the darn return line - everything is fine now. Soooo....all things considered and factoring this into any equation - the cost of ownership becomes a fairly insignificant consideration.

 

[smstonypoint]

I'll defer my answer and cede the floor to Dr. Steve "smstonypoint'.

It's all a matter of economics. :wizard:

Surely you have those days when you wonder, "How can I estimate the costs of owning and operating a tractor"? Then you come to same old realization. "I need the advice of an economist. An economist would be able to answer my question."

See my posts in http://www.tractorbynet.com/forums/buying-pricing-comparisons/377826-what-does-your-tractor-cost.html#post4739283 and http://www.tractorbynet.com/forums/owning-operating/378111-total-cost-operating-tractor.html#post4744112.

Steve

 

[rustyshakelford]

My 100hp is in the 5 gph range. Hopefully you missed a decimal. I don't ever mess with these calculations, to many variable. I need the tractor for my stuff. Any mowing on the side is just cash in the safe. When it's time for maintenance, it gets done and I go on about my life. Some folks will read these threads and think it's costing them $50 just to mess around with their tractor for an hour

Brett

 

[GregP27]

Hi Jeff9366,

If I assume $29,500 list, $27,500 purchase, 0.6 gph, 10 years at 200 hours a year, $15 per hour for the operator, 7% for interest and 2% for inflation, I get $31.57 per hour for that tractor total cost to own and operate. I am assuming that cost covers the implement. If not, then there is another cost for the implement that is, of course, much less than the cost of the tractor, but it's not free.


Hi Rustyshackelford,

It might very well cost them $50 to do just that. The costs don't show up each and every hour. They show up when they come due. Tractors need oil changes, grerase, they break, need tires, etc.

I can fly an airplane for peanuts for 2 - 5 hours or more. But when the annual inspection comes due, peanuts ain't gonna' PAY for it when it has to be paid. If I don't hit the old aircraft account with the money for hours flown, then the money for the annnual expenses won't BE there when it is time to pay. If you can afford that, good on you and happy day. But if you can't plunk down $2,500 in cash for an annual inspection where nothing wrong is found, then your plane is grounded and you don't fly anymore. If they find a bad cylinder, just try finding one and getting it running in a certified aircraft for less than $7,000! Better plan on a bad part every now and again, because they happen to everyone, even me.

Same with a tractor. It doesn't cost that each and every hour, just as it doesn't with a boat, either. But the pay-out DOES roll around and you either have the money anyway, have planned for it via something like the cost to own plan, and so have the money in an account especially for it, or you will come up short. There are no other possibilities except to borrow the money, which is an added expense. People don't lend money free.

Cheers and nothing else intended. I passed on a link to a very plausible cost to own paper. That's all. I wasn't going anywhere else with it and have no message or other statement.

 

[jeff9366]

Hi Jeff9366,

If I assume $29,500 list, $27,500 purchase, 0.6 gph, 10 years at 200 hours a year, $15 per hour for the operator, 7% for interest and 2% for inflation, I get $31.57 per hour for that tractor total cost to own and operate. I am assuming that cost covers the implement. If not, then there is another cost for the implement that is, of course, much less than the cost of the tractor, but it's not free.

Few here would have one implement or attachment. I have about fifteen, with Ratchet Rake bucket attachment being the least expensive and heavy Monroe Tufline Tandem Disc Harrow being the most expensive. Even though only one implement is mounted at a time, they are all depreciating and require some maintenance. I estimate the cost of my implements and attachments at $25,000, which changes tractor operating cost significantly, assuming it is infrequently used without at least one implement or attachment.