Hourly cost to own/operate tractor?

[4570Man]

At one point I calculated operating costs on my L4060HSTC at $35/hr. Others have noted maintnance & insurance already.

I wont loan out my tractor. I'll gladly help out friends, sometimes for $35/hr, sometimes for free. But it's not worth the wory to loan out the machine to friends.

Who gets stuck with the bill for for a busted whatever? Was the busted whatever just worn out, or did improper operation cause it to fail? In most cases 1 or both parties are going to have some heartache over the deal. I'd rather operate my machine for them & know where the blame lies than risk a friendship.

So does it cost you $35 to piddle around for an hour on the teacher?

 

[CADplans]

I look at the situation in reverse,,,
Lets see,, I need a $20,000 machine for 2 hours,,
If I rent it, the delivery and pick up to where I live costs $250 ($125 each way)
Then there is the rental,,
If I pay a neighbor under $300 for two hours, we both make out like bandits,,,

I do not loan or rent my machines.
I will, on occasion, do the work for free,, but, when asked the second time, I ask the requester to pay half of the $1,400 I just spent for tires,,,
They never come back, thinking I am unreasonable,,
that is OK,, if I "lend" something,, for sure, I am loosing money.

I have done many "free" jobs for neighbors,,
NO ONE, has EVER reimbursed me my actual cost,, I typically get offered $10-$20,,,
People are C H E A P !!

 

[4570Man]

I look at the situation in reverse,,,
Lets see,, I need a $20,000 machine for 2 hours,,
If I rent it, the delivery and pick up to where I live costs $250 ($125 each way)
Then there is the rental,,
If I pay a neighbor under $300 for two hours, we both make out like bandits,,,

I do not loan or rent my machines.
I will, on occasion, do the work for free,, but, when asked the second time, I ask the requester to pay half of the $1,400 I just spent for tires,,,
They never come back, thinking I am unreasonable,,
that is OK,, if I "lend" something,, for sure, I am loosing money.

I have done many "free" jobs for neighbors,,
NO ONE, has EVER reimbursed me my actual cost,, I typically get offered $10-$20,,,
People are C H E A P !!

I agree 100% that loaning equipment is a bad idea. I think renting equipment by the hour is an even worse idea. It comes with even more problems than just loaning equipment. I don’t think it cost between 30-50 dollar an hour to operate a compact tractor. If it does than you’re loosing money by even pretending to use it. You can hire a much bigger piece that does 10x more for $100 an hour. I’m thinking closer to $10 an hour including fuel. ( I didn’t say let the neighbor use the tractor for $10 an hour ) Most compact tractors won’t burn a gallon of fuel an hour. The oil changes just don’t cost that much. The repairs are minimal unless your machine is junk or being abused. If the machine is insured that’s a cost of owing it and has zero to do with hours. The depreciation isn’t a whole lot under the right circumstances. I see a lot of people factoring the tractor value to $0 and that’s the wrong way to do it. The tractor is always worth something and they hold their value pretty good. If you’re a retired person using the tractor for personal use the depreciation is $0 since you’ll never wear it out.

 

[jeff9366]

If you own implements, which all of us do, you should charge implement depreciation and repairs against tractor operating cost. I have twelve implements plus several FEL attachments, perhaps $14,000 new cost? Implements are repaired at the welding shop regularly if not frequently. My implement "churn" is about two per year. Examples in the past year: $1,200 ETA Landscape Rake replaced by $3,800 (used) ABI TR3 Rake; $1,600 X 600 pound Land Pride Rotary Cutter replaced by $3,120 X 1,000 pound Land Pride Rotary Cutter, $800 aluminum Debris Forks, worn out, replaced by $896 steel SSQA Pallet Forks.

Implement depreciation and repairs at least $8.00 per tractor engine hour.
(Smaller implement inventory would reduce hourly cost.)


When you buy fuel, you should charge cost of driving to the station and back to buy fuel. For most of us driving trucks the cost is 60 cents per mile. I buy fuel ten gallons at a time.
And that considers my driving time valued at zero. Personally, I seldom value my time at zero. Fetching fuel = $200 per year.


I have KTAC insurance at $435 per year at 300 engine hours per year = $435/300= $1.45 per hour.

I have a $2,000,000 umbrella over my homeowner's insurance to protect me doing tractor work on 200 acre common area where I live. Since I maintain and ignite a community burn pile I consider umbrella policy essential. $600 per year. $600/300 engine hours = $2.00 per engine hour.


Implements + Fuel Acquisition + KTAC + Umbrella = $12.11 per engine hour.

 

[4570Man]

I used to have have a L3240 with a backhoe until I sold it. I sorta regret that, but I have a JD310 now so.. The repairs over the period I owned it excluding the ones caused by abuse were seals in the backhoe valve $100. Seal in the middle of the tractor. Cheap but it was a rough job to change so $1000. Seals on the front axel. $50 per side. Battery $100. Blown hose on loader. Probably $10 for me but maybe $100 for oem hose. Parts caused by abuse and I don’t feel like it’s fair to put those on the hourly cost. 3 rods on backhoe cylinders. That was about $1000 and caused by previous owner leaving backhoe attachment in field. Blown power steering hose. Cost me $7 but maybe $100 for oem. Bent loader cylinder $700. The service on the tractor wasn’t very much since the previous owner had done the original services and I never changed the hydraulic fluid. When I sold the tractor I got most of the money back. With all the work it did I could have gave it away and been money ahead. I think my guesstimate of $10 an hour would have covered it since that was $7500 over the time I owned the tractor. If you were really pushing hard with a high load implement you might get 1.5 gallons per hour through a compact tractor but the average isn’t that much. Off road diesel is $2.50 or so. That takes $1400 of my claimed $7500 if it averaged .75 GPH at $2.50 gallon

 

[4570Man]

If you own implements, which most of us do, you have to charge implement depreciation and repairs agains tractor operating cost. I have about twelve implements plus several FEL attachments. Implements are repaired at the welding shop regularly if not frequently. Implement depreciation and repairs at least $8.00 per tractor engine hour.

When you buy fuel, you have to charge cost of driving to the station and back to buy fuel. For most of us with trucks the cost is 75 cents per mile.
And that contributes driving time at zero. Personally, I never value my time at zero. Fetching fuel = $200 per year.

I have KTAC insurance at $435 per year at 300 engine hours per year = $435/300= $1.45 per hour.

I have a $2,000,000 umbrella over my homeowner's insurance to protect me doing tractor work on the common area where I live. Since I maintain and ignite a community burn pile I consider this essential. $600 dollars per year. $600/300 engine hours = $2.00 per hour.

My insurance cost less than that at a little less than $700 a year for 35k coverage on the machine and 2 million liability. The cost of the insurance remains the same if I worked zero or 3000 hours a year. Although if the machine never left my property I would drop the insurance. At 0 hours a year the $690 is a really steep operating cost. At 3000 hours a year it’s a mere 23 cents. I don’t operate nearly that much a year but a single commercial mowing job that I couldn’t do without it will more than cover that expense.

 

[dragoneggs]

Probably not much more that I can add here that hasn't already been said.

I don't own a trailer for my tractor for the very reason of (guilt?) not helping out my brother in laws or friends. I just don't want to deal with the fallout if something should happen. I suppose if I was financially independent and I could fix or buy another one without concern, it would be another story.

I do help, and gladly offer when I see the need, my next door neighbors where I can drive over with my tractor and do the work vs. them jumping on and learning. We all know that pretty much nobody treats a borrowed tool as good as the owner.

Even if you did agree on an arrangement should anything go wrong, big or small, most likely your friendship will suffer. Not worth it to me. I don't want that burden of guilt.

I have toyed with the idea of going in on a boat with someone. Short term could be great, but my gut says that won't be a happy long term relationship.

I see loaning your tractor out for a short term with a fee is just a big gamble. Eventually, something is going to happen.

 

[mikester]

Hello,

I purchased a used L3940 with 800 hours this past spring for $20,000. Such an awesome tractor!

I would like to loan this tractor to a good friend of mine from time to time and I want to find out what the tractor costs to run so he can borrow the tractor, keep track of hours, and reimburse me a fair rate for fuel, maintenance, depreciation, etc. Anybody have any good ideas what a fair rate would be? I am looking for a fair rate so I can feel totally fine loaning him tractor...

I just don't have enough tractor experience to have a good idea about this...Thanks for all replies!

Get a price from your local machinery rental company. For machinery they usually charge a daily rate calculated on time out AND/OR engine hours whichever is more. So if you borrow a machine for a 2 day weekend but put on 24 hours some rental companies charge you for 3 days use.

Take their daily rate and divide by 8 if you want their hourly rate.

Personally I think you are opening a can of worms by renting out your machine.

 

[LD1]

As others have already pointed out the pros and cons of renting out to a "friend" vs loaning for free vs just doing the work for them....either free or going rate.

So Im not gonna touch any of that. I am gonna simply speak about operating costs. And your tractor is different than mine so numbers may be a bit different...but you have to account for ALL expenses....even depreciation. Because depreciation IS real. you have a $20,000 machine with 800 hours in the year 2018......in 10 years, in 2028, with 5000hrs on the clock....do you honestly think it will still be worth $20,000??

So my tractor....MX5100 HST with loader
$80 HST filter needed every 200hrs..............$0.40/hr
$55 transmission filter every 400hrs..............$0.14/hr
$32 air filter every 400hrs............................$0.08/hr
$60 engine oil and filter every 200hrs............$0.30/hr
$152 for SUDT hydraulic oil every 400hrs.......$0.38/hr
$400 for front tires that last only 1000hrs.......$0.40/hr
$800 for rear tires that last 2000hrs...............$0.40/hr
$600 for yearly insurance 200hrs...................$3/hr (would be less per hr if you use it for more hours in a year. But more if you use it less. Most people only put 100hrs or less a year on)
I burn 2.5 gal per hour of fuel. $3.60/gallon.....$9/hr
Depreciation. Assuming tractor lasts 5000hrs before something catastrophic basically "totals" the tractor I paid $20,000 for. Thats $4/hr

I am up to a tad over $18/hr to operate and me doing all the service work.

So yea.....jeff's $20/hr is just about spot on.

Most dont like to "think" that every time they hop on their tractor they are actually costing ~$20 per hour. Because after all, just put a few gallons of fuel in it here and there right. How much can that be?

But your fluids and filters ARE a known expense. And this isnt everything either. Battery every 5-8 years? Grease? 3ph pins and clips that get lost? Light bulbs that burn out?

Some dont like to think about tires....but they do wear out. Find out what they cost...and approx how long they will last you. Its a REAL cost that MUST be factored. And this isnt accounting implements either.

And NONE of this accounts for the unexpected issues. Tire puncture? Blow a hydraulic hose? Starter craps out? Weeds yank your dipstick out and blow your engine up costing you $8000 to replace

 

[4570Man]

As others have already pointed out the pros and cons of renting out to a "friend" vs loaning for free vs just doing the work for them....either free or going rate.

So Im not gonna touch any of that. I am gonna simply speak about operating costs. And your tractor is different than mine so numbers may be a bit different...but you have to account for ALL expenses....even depreciation. Because depreciation IS real. you have a $20,000 machine with 800 hours in the year 2018......in 10 years, in 2028, with 5000hrs on the clock....do you honestly think it will still be worth $20,000??

So my tractor....MX5100 HST with loader
$80 HST filter needed every 200hrs..............$0.40/hr
$55 transmission filter every 400hrs..............$0.14/hr
$32 air filter every 400hrs............................$0.08/hr
$60 engine oil and filter every 200hrs............$0.30/hr
$152 for SUDT hydraulic oil every 400hrs.......$0.38/hr
$400 for front tires that last only 1000hrs.......$0.40/hr
$800 for rear tires that last 2000hrs...............$0.40/hr
$600 for yearly insurance 200hrs...................$3/hr (would be less per hr if you use it for more hours in a year. But more if you use it less. Most people only put 100hrs or less a year on)
I burn 2.5 gal per hour of fuel. $3.60/gallon.....$9/hr
Depreciation. Assuming tractor lasts 5000hrs before something catastrophic basically "totals" the tractor I paid $20,000 for. Thats $4/hr

I am up to a tad over $18/hr to operate and me doing all the service work.

So yea.....jeff's $20/hr is just about spot on.

Most dont like to "think" that every time they hop on their tractor they are actually costing ~$20 per hour. Because after all, just put a few gallons of fuel in it here and there right. How much can that be?

But your fluids and filters ARE a known expense. And this isnt everything either. Battery every 5-8 years? Grease? 3ph pins and clips that get lost? Light bulbs that burn out?

Some dont like to think about tires....but they do wear out. Find out what they cost...and approx how long they will last you. Its a REAL cost that MUST be factored. And this isnt accounting implements either.

And NONE of this accounts for the unexpected issues. Tire puncture? Blow a hydraulic hose? Starter craps out? Weeds yank your dipstick out and blow your engine up costing you $8000 to replace

What does your separate insurance cover? I really only cared about theft or fire but my my agent said it also covered damage to the machine caused by accident. Of course there’s 1k deductible so it would take a major problem before they pay.