Tractor Depreciation Schedule

[Larry_Van_Horn]

I thought some might find the attached interesting. Based on comments made in a my related thread on prices of NH and JD being very close to one another, I thought I would try to get some sense on the cost of ownership / depreciation.

I am an economist by training, so I tend to get hung up on trying to put numbers to something. The numbers in the table came from Machinerylink. I welcome your interpretation as I have mine. At the end of the day, there are so many other things that affect the purchase decision (as has been been pointed out to me by the TBNers, and these numbers represent average values for good equipment (defined?).

Some observations based on the limited information (with all the caveats that should imply [img]/forums/images/graemlins/wink.gif[/img] )
New Hollands tend to hold their value pretty well on a relative basis.

Enjoy,
Larry

[GreenMtnMan]

Wow! It looks to me like there is no significant difference between the big 3 brands when it comes to depreciation. This is good info - thanks for compiling and posting it!

[Neophyte]

Great spreadsheet but it seems to be lacking some of the more popular tractors. I would be curious to see how NH stacks up to the Kubota B Series and the JD 4100 & 4200 Series.

[Libertine]

Larry_Van_Horn:

If you're into this kind of stuff, you might pick up a copy of Used Tractor Price Guide (published annually by Intertec a/k/a Primedia at:1-800-262-1954 or Primediabooks.com). They cover tractor prices going back to 1939 obtained from auctions and other sources and give 3 prices for each model depending on condition i.e. fair/average/good. They include info such as serial #s for the various model years.

Since you are looking at the TC40, you might run a schedule on the TC40 and the Ford/NH 1920 (same engine). As your chart shows, the NH is comparable to the JD (and KUB). For any of the majors, the main difference is condition. Frankly, I was surprised the JD wasn't better since they have such a "reputation" for high resale.

If you are an economist by training (as you said) you might run a cost schedule in gold dollars (i.e. 1/20 oz gold=$1.00 in paper money - that isn't precise, I know, but its close enough) running back in time. I have charts measuring costs in gold dollars and costs in man hours at "prevailing" wage going back about 70 years. Prices are rather high right now, i.e. in ounces of gold the cost of automobiles (and tractors) will most probably decline in coming years. The TC40, roughly comparable to an old 8n or Jubilee but a little heavier duty, is much higher today and will almost certainly drop in coming years.

JEH

[cowboydoc]

Now you need to factor in the true cost of ownership. Figure what you will be doing with the tractor. Take that by prevailing rates for that work in your area. Figure in your time value and then you will actually see what the true cost of that tractor is.

The way you are figuring is like figuring for a car. A tractor, usually, is a piece of equipment to save you money, make you money, and/or save time.