Cost of owning a tractor

[Baby Grand]

To really appreciate the cost of owning a tractor, I like to first consider the cost of not owning a tractor:
All those trips to the chiropracter.
Every job hired out a crap shoot if it will done right - or if it will rain the day the work is scheduled.
Every job done by me becoming a full week undertaking:
> Like taking down an 18" diameter tree, deep in the woods, at the bottom of the hill. Cutting & splitting it and then getting it up the house.
Priceless, indeed.

 

[ultrarunner]

^^^ Exactly the way I see it...

 

[cartod]

^^^^Yep^^^^^

I see no cost in owning a tractor. The money it has saved me has paid for the tractor 10 times over.

 

[Creamer]

I see no cost in owning a tractor. The money it has saved me has paid for the tractor 10 times over.

that does not mean there are not costs it just means there is a return on the investment. Owning a tractor or any other piece of equipment is not free.

 

[Deere Dude]

It cost me a hernia by not having a tractor with me a few years ago. Every time I need to lift something big and heavy the first thing I do is try to find a way for my tractor to do it.

 

[IslandTractor]

that does not mean there are not costs it just means there is a return on the investment. Owning a tractor or any other piece of equipment is not free.

My tractor paid for itself in a few years given the land clearing that did not need to be contracted out. It doesn't cost much to operate, maybe $300/yr in fuel, fluids and filters/parts. I buy used implements periodically and those generally pay for themselves within a year or two based on saving contracting costs. Doubt that I'll ever sell it so I just think of annual expenses as the cost of tractor ownership at this point.

 

[smstonypoint]

I was just thinking, after reading some posts here this morning, about the cost of owning our little L2550DT. This is roughly what it has cost.

The original cost was about $14,000. It was purchased used in 1990. It was about three years old I believe. It came with a backhoe, bb and a couple other minor items.

It is now 2015, 25 years have gone by with about 5,500 hours or so put on the unit. I will assume since it still runs well it is probably worth $4000 or so.

So, $14,000-$4,000 makes the total expense of the purchase $10,000. 25 years of ownership makes the annual cost about $400. 5,500 hours for $10,000 is about 55 cents per hour.

I will assume it costs me about $300 per year for maintenance as well so the cost of ownership for a year is roughly $700.

Excuse my language (economics), but your calculation ignores the opportunity costs of the funds tied up in the tractor. As an approximation, you had an average of $9,000 invested in the tractor. If you could have earned 5% on your investments, the annual opportunity cost of your ownership would average $450. In addition to depreciation and opportunity cost of the investment, you would need to include insurance on the tractor and property taxes (if applicable) to obtain annual ownership costs.

Fuel, maintenance, repairs, etc. would count as operating costs. Your total costs would equal the sum of your ownership & operating costs.

Steve

 

[IslandTractor]

Excuse my language (economics), but your calculation ignores the opportunity costs of the funds tied up in the tractor. As an approximation, you had an average of $9,000 invested in the tractor. If you could have earned 5% on your investments, the annual opportunity cost of your ownership would average $450. In addition to depreciation and opportunity cost of the investment, you would need to include insurance on the tractor and property taxes (if applicable) to obtain annual ownership costs. Fuel, maintenance, repairs, etc. would count as operating costs. Your total costs would equal the sum of your ownership & operating costs. Steve

True but that method ignores savings accrued by doing work yourself that would otherwise be contracted out and paid out of pocket.

 

[Sysop]

Nearly $10 of my purchase was on a subframe mounted backhoe. I saved myself from paying out almost $20k for installing my septic and drainage. Took twice as long as the "professional's" estimate, but I worked my normal day job and completed everything in my spare time...

If you have a use for such a tool, it is difficult not to be able to justify the cost. Having the ability to store the tool is something else. If you cannot store the tool, keeping the tool long term may not be wise, no matter what the cost was or how it was covered.

 

[ultrarunner]

The past few years my opportunity costs have averaged less than 1% per year and then there are taxes to paid on that fraction of 1%.

My well thought out plan/goal was to purchase my forever property like so many here on TBN have done... kept reserves in cash and eventhough I had made several full price offers... it simply did not pan out.