"Be Careful, You'll Have More Into It Than It's Worth"

[MBTRAC]

With some of the older gear we run from new & also buy S/H the cost of refurbishment far exceeds the puchase of the unit, & there's no way I could recoup the combined cost of the tractor + refurbishment if I was to onsell - but it does makes sound economic sense on a running capital cost/hour basis , let me explain......

Three examples are a few of our tractors that notionally "have more money into it, than what it's worth" on the used market, that are worth far more to our farming enterprises are pictured below :

JD6030 @212hp 2WD purchased S/H@6000hrs for c.$15K (oil samples fine & engine fine) spent $4K on paint/axles/gearbox so owes me $19K - Still only worth at c.$15K but where am I going to buy a 212hp tractor for 19k that will last at least another 6000hrs (which works out as capital running cost of only c.$3.20ph)

Steiger CP1400 400hp 4WD 29000hrs (yes that's 29000hrs) purchased new & fully written down on tax so owes me zero, recently the whole tractor was rebuilt/renewed (inc. engine /gearbox/axles, the cab retrim ..etc) all up c.$63K should be fine with no other major expense for min. 8000hrs (a capital running cost of c$8.90ph) but worth maybe $25k or less on the market- the similar sized New Holland next to it in the photo still owes me c.$300K as it was purchased new so it's costing me signifcantly more than $8.90pn !!!

White 4-225 220hp 4WD 14500hrs owned since new & again fully written down, total "nut & bolt" restoration/rebuilt/trimmmed/painted (a new exhaust was fitted post the photo ) @ c.$71K now as new, will run fine for another min. 10000hrs (@$7.10ph), market value maybe $20-25K? Cost to replace new c.$200k

Where it all gets a little bit hard to justify, even if you do the work yourself, is mostly sub 100hp, as parts are not incrementally cheaper the smaller the tractor & labour cost are the same - we're fortunate to have our own comprehensive farm workshops/mechanics which makes it easier, but we still have labour on cost & parts to factor into the equation.

We also buy lots of new gear as/when the seasons/finances allow, but with the new gear there needs to be compelling reasons to purchase based on increased (& often task specific) efficiencies/capabilities (not just because it's the latest & greatest)

 

[sixdogs]

It's perfectly fine to have more in it than it's worth. That's the enjoyment factor. Let's say you have $11,000 into something. That's not really what you have into it if it could be sold for $10,000.You only have $1,000 into it because that would be your net loss if you sold.

By comparison, the neighbor just took a $6,500 cruise and has $6,500 into some digital pictures plus fading memories. Seems like they lost over six times what our tractor lover lost. But the tractor lover can use his investment on a continual basis to either produce or save money as well as take the agricultural equivalent of a cruise for free.

Ideally it's the most satisfying to put as little as possible into things but I think it's fine either way. Just my two cents.

 

[Baby Grand]

Yes - it would be a mistake to discount the entertainment value of having and using a tractor. It's cheap therapy.

 

[The kid]

I often see cautionary warnings similar to this when someone seeks advice about buying and/or repairing/restoring a tractor.
I was wondering what the reasons might be that a person would get into a repair or restoration knowing full well beforehand that the cost of repairs will exceed the value of the machine?

Let's disregard the case of sentimental value (like it was grandpa's Farmall H, or something like that).

It seems to me it's pretty easy to throw serious money into an older worker tractor, especially if you don't perform all the work yourself, and you can end up investing more than it's worth in the end.

I have some thoughts about this but I'd like to hear what others have to say.

If you enjoy what your doing the money is not an issue. Like most collectors, they love what they collect. Restoring it is part of collecting. If your going nut and bolt restoration one will never re-coop the investment in parts and labor. Having personal satisfaction is what it's all about. A partial restore can get expensive too. But to have it darn close to what it was new is someting to be proud of. All restorations have a price worth cap fully restored. With that said, most all tractors have a worth cap depending condition. Most don't restore/refurbish to make money but they know the cap value and won't sell for less than.

Most that spruce up thier tractors know they will never get out of it what they put into once they exceed appraised value. But really they do get more out of in enjoyment.

 

[kneedeep]

after discussing a proposed equipment purchase with my wife (works as hard as I do on the place) the question came up- Can we hire the work done for the cost of the equipment?

After thinking about it, I realized that tractor/dirt work, repairing equipment was a hobby that I truly enjoyed! When doing those things, I never really consider cost as much as the relaxing atmosphere that seems to devolop when running or repairing my equipment. The satisfaction of completing a project has more value to me than watching someone I am paying to do what would take me longer just to 'save' money.

IMO that is why we put more money into our equipment than it is worth!

 

[tcartwri]

Friend of mine just spent close to 80K in the total restoration of his first new car.... a 63 Impala SS Convertible, 409 4 speed, black with red leather. The car is probably worth 55 to 60 now, but it was his dream to restore it to new. To him it was worth every penny. His son just shakes his head in disbelief.

 

[pat32rf]

When I go to the dealer and buy a new car,truck,tractor,rifle, pay the tax and bring it home, I've already got more into it than I would get resale....if I had to finance it would be even worse!

 

[Ilikeurtractor]

It's perfectly fine to have more in it than it's worth. That's the enjoyment factor. Let's say you have $11,000 into something. That's not really what you have into it if it could be sold for $10,000.You only have $1,000 into it because that would be your net loss if you sold.

By comparison, the neighbor just took a $6,500 cruise and has $6,500 into some digital pictures plus fading memories. Seems like they lost over six times what our tractor lover lost. But the tractor lover can use his investment on a continual basis to either produce or save money as well as take the agricultural equivalent of a cruise for free.

Ideally it's the most satisfying to put as little as possible into things but I think it's fine either way. Just my two cents.

Nice. The thing I like best about that is that you can "refresh" your memory at any time with the purchase you can use everyday. My wedding was on the cheap side - cost something like $1,000.00 total that I paid out of my own pocket. I barely remember the day (and wasn't even drinking!) and am glad I didn't spend any more. I have a tough time shelling out money for "experiences" that tend to keep fading more quickly the older I get. Give me something tangible that doesn't disappear in the matter of a few days and I'll take it over the alternate every time.

 

[Little Red Tractor]

The cub tractor in my picture was my first tractor, purchased for a project to get running with my dad while he could still do a little. It's a couple tractors in the past now, and I lost money on the trade when I parted with it; but my dad was sitting on a 5 gal. bucket in my garage when I started it, helped me get it to idle right, adjust a few things...you get the picture. Did I lose money? Yes. Would I do it over? You bet.