Correct my thinking...

[LostMy65]

If I buy a new $20,000 tractor and some major issue comes up in my life and I have to sell it. What roughly would be my loss in 2 years?
.
Ok, so now, instead I rent a tractor every time I need one. I could seriously see myself wanting/needing a tractor to use at least once a month.
$300 to rent at 12 times a year for 2 years = $7200. (maybe I only need one once every 2 months. That's still $3600 lost by renting).
.
Yes, I'm trying to rationalize/justify, but I can't see how renting makes sense over buying, even if I have to sell my new tractor in 2 years.
.
Correct my thinking...

 

[Midniteoyl]

Depends on what the market is doing. Right now you could actually make money selling. But, going on past history, figure ~15% loss, or $3000 over 2 yrs, would be my estimate. Less than half of your rental estimate.

 

[JJT]

Buying a tractor is a luxury spend for most of us, (it's a want, not a need). If you don't have a significant rainy day fund, don't buy the tractor. If you have a significant rainy day fund, you don't need to worry about selling the tractor if something happens.

 

[fried1765]

If I buy a new $20,000 tractor and some major issue comes up in my life and I have to sell it. What roughly would be my loss in 2 years?
.
Ok, so now, instead I rent a tractor every time I need one. I could seriously see myself wanting/needing a tractor to use at least once a month.
$300 to rent at 12 times a year for 2 years = $7200. (maybe I only need one once every 2 months. That's still $3600 lost by renting).
.
Yes, I'm trying to rationalize/justify, but I can't see how renting makes sense over buying, even if I have to sell my new tractor in 2 years.
.
Correct my thinking...

Nothing to correct!
You are right!

 

[jeff9366]

Depreciation is covered in this Messick's video:

 

[Midniteoyl]

Depreciation is covered in this Messick's video:

The 20%-25% he quotes is for trade in to the dealer. Private sales take less of a hit.

 

[crashz]

Lost - your handle says it all. It sounds like you are worried about something in the future happening that has a very real chance of happening.

Based on that, do you expect to be able to handle a tractor sale during this time? Could you hold out a little to sell for a reasonable price or is going to be a fire sale? Maybe this is health or divorce related, I don't know. But if you foresee a problem, try to set yourself up now to handle it. No need to add stress.

Besides, a tractor for once a month might mean that you could rent a more specific piece for specific tasks (ie min ex for excavating, skidsteer for grading, etc). A tractor is a jack-of-all trades. Master of none.

 

[4570Man]

Renting is a complete waste of money. Buy the tractor.

 

[Gee Ray]

With the tractor market as it is I would say the worst you will do is to break even if you buy a new tractor today. If you buy one at 0% interest then you will be money ahead. This only works if you have a place to store the tractor indoors.

 

[CH4Ohio]

If you buy a used tractor (good condition and decent price), I believe you can sell it for what you have in it.

 

[jeff9366]

Tractor prices are high this summer, both new and used.

Demand trails off during mid-summer and continues to decline until the grass greens up in the spring.

The supply chain hopefully will be in better shape by late October.

There is a reasonable chance net prices will be lower November-December-January-February-March.

 

[LostMy65]

Thanks everyone. I was convinced, I just needed some reassurance.
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As far as my handle... (Username)
LostMy65 was the username I came up with for a classic truck forum I joined 11 years ago. I had a 65 Chevy pickup truck that I owned in the 12th grade back in 1983. I sold it in 87 and never looked back. Then in 2010 I wanted a classic truck to restore and started wondering what ever happened to it - Lost My 65. Found it in 2012 and bought it back.

 

[jeff9366]

The 20%-25% he quotes is for trade in to the dealer. Private sales take less of a hit.

No warranty and no dealer financing concomitant with a private sale.
I think depreciation of 20% should be expected in a private sale.

Maybe 1/5 used tractor shoppers can come up with $16,000 CASH. That decreases demand by 80%.

 

[LostMy65]

I have saved up at least $8000 by doing side jobs. So, if I have to cut and run and lose all of it, I won't feel like I lost "Family" money.

 

[notaz3]

I went through the same dilemma for about 18 months before deciding that the true Return On Investment ends up being that you have the tractor there when you need it. Have a few extra hours in the day, run the tractor and finish some chores.
Now it comes down to the six month weight time before I can take delivery.

 

[Thomas]

Have you consider wait time for rental,also if the weather should turn sour unable to do task comparing to have your tractor doing task when you wish.

 

[MoKelly]

Owning a tractor costs more than the purchase price. Maintenance and insurance and tires and attachments and stuff.

The key to me is that you can get what you need (what you have been renting) for the $20000.

If you can, I agree that you should buy.

I also agree that you won’t take much of a haircut when and if you are forced to sell. As long as you can have some patience when you sell v. needing to sell in a day.

Good luck and despite the financial analysis, have fun!!!

MoKelly

 

[LostMy65]

Owning a tractor costs more than the purchase price. Maintenance and insurance and tires and attachments and stuff.

The key to me is that you can get what you need (what you have been renting) for the $20000.

If you can, I agree that you should buy.

I also agree that you won’t take much of a haircut when and if you are forced to sell. As long as you can have some patience when you sell v. needing to sell in a day.

Good luck and despite the financial analysis, have fun!!!

MoKelly

That's a good point. I can pick up and drop off a rental without the time of maintaining my own.

 

[fried1765]

That's a good point. I can pick up and drop off a rental without the time of maintaining my own.

I just wish I had kept track of every time I have needed a tractor for 20-30 minutes.
Would have been hundreds of rentals.

 

[beowulf]

I don't know what your needs are for a tractor but for me renting would never be an option. Things happen, you need it now, you want to do this now but can't, you don't do things you could do if the tractor was right there and available, and on and on. For me, and I am guessing for many here, having a tractor ready right when you want it is worth the purchase.