Dealers and used tractor pricing

Soundguy · Aug 15, 2006

Originally I only had 3ac, and a small mini farm.. horses/chickens.. etc. I needed a tractor.. Went to get a tc18.. but the dealer had a 1920 setting on the lot for only 1000$ more.. had a few hours on it but was in super condition. It was more than i needed.. but was almost twice the tractor as the tc18.. plus it was 4wd. i figured it was a good deal. Later on, we bought another 10ac and my mowing time went way up, I also got a 2nd job during that time.. so I work 6 days a week.. leaving little time to mow. Mowing was taking me 6 hrs with a 5' mower. I considered getting a 6' mower when i instead decided to get a larger tractor. I had my heart set on a ford 5000 and 10' mower.. but ended up spending 2x that and got my 7610s.. though got great trade on my 1920 in the process.

Now i can mow in about 3 hrs w/ the 10' mower.. or about 2 hours if I use the 15' batwing I fixed up just recently.

Soundguy

Iowachild · Aug 15, 2006

While talking with a MF dealer a the fair last week, my wife asked him if he takes trades. He never asked what it was, just said he wasn't interested and if he did take a trade we would start with different price than the one posted on the machine I was looking at. He did say if we purchased from him we could set our machine on his lot free of charge.

Well that's not a answer to the original question, but it does show what one dealer thinks about even taking used machines on trade.

777777 · Aug 15, 2006

Hi,

Well, after all the posts I thought I'd just go to the one website for the dealer who had the Kubota. Sure enough, couple years later and still sitting there and same price.
The other 2 I know are still the same price as only a short distance away so I drop in there on occassion.

Maybe they are bait so that you can see that if a used tractor is so much, then new looks more reasonable in cost.

Perplexes me as I figured that you just move them or tying up money.

Have a great nite.

Thanks

radman1 · Aug 15, 2006

I believe most dealers aren't very excited about trades unless it is a very good condition current model. I asked about trading my 2000 Kubota 3710 and loader in excellent condition and 460 hours on a new Kubota or JD. Three different dealers and none are very interested. They will take it on consignment. All three looked it up in their price guide and gave the same wholesale trade in value of $12500. It also had a canopy, foldable ROPS, dual rear hydraulics, skid steer plate adapter and R4 tires. The extras didn't even matter. One did offer if I had a buyer for the used tractor, he would do financing for the buyer if I wanted.
The used car and truck market will almost always take trade-ins but there is a secondary auction market they use to get rid of most used cars. A lot of people won't buy a new car unless they can trade in there old.

DavesTractor · Aug 15, 2006

radman1 said:
I believe most dealers aren't very excited about trades unless it is a very good condition current model. I asked about trading my 2000 Kubota 3710 and loader in excellent condition and 460 hours on a new Kubota or JD. Three different dealers and none are very interested. They will take it on consignment. All three looked it up in their price guide and gave the same wholesale trade in value of $12500. It also had a canopy, foldable ROPS, dual rear hydraulics, skid steer plate adapter and R4 tires. The extras didn't even matter. One did offer if I had a buyer for the used tractor, he would do financing for the buyer if I wanted.
The used car and truck market will almost always take trade-ins but there is a secondary auction market they use to get rid of most used cars. A lot of people won't buy a new car unless they can trade in there old.

It might be a matter of cash flow. Most new tractors are on floor plans. The dealer retails the tractor and then must immediately pay off the floorplan. He is left with the difference (profit) in his pocket, less overhead, etc. Now if he takes a trade, he still has to pay off the floor plan, but the bank won't take a used tractor for payment, they want $$. So if in a week, the dealer takes in $50K in trades, he better have an extra $50K available to pay off his floor plan. I think some dealers get in a cash crunch and miss golden opportunities to take in trades. We encourage trades and advertise that way, but we put a little money aside to make this work. Nothing better than selling a new tractor for a little profit then selling the trade in a few days later for a little extra profit, but it won't work if you can't afford to "buy" the trade.

bones1 · Aug 15, 2006

DavesTractor said:
It might be a matter of cash flow. Most new tractors are on floor plans. The dealer retails the tractor and then must immediately pay off the floorplan. He is left with the difference (profit) in his pocket, less overhead, etc. Now if he takes a trade, he still has to pay off the floor plan, but the bank won't take a used tractor for payment, they want $$. So if in a week, the dealer takes in $50K in trades, he better have an extra $50K available to pay off his floor plan. I think some dealers get in a cash crunch and miss golden opportunities to take in trades. We encourage trades and advertise that way, but we put a little money aside to make this work. Nothing better than selling a new tractor for a little profit then selling the trade in a few days later for a little extra profit, but it won't work if you can't afford to "buy" the trade.

The best explanation I have heard.

pgflrob · Aug 15, 2006

Sounds like there is no wholesale market for used tractors like there is for boats or cars. Without a wholesale market there is liquidity and that results in huge differences in bid/ask. Just like micro-cap stocks.

radman1 · Aug 15, 2006

DavesTractor
What is a floorplan?

DavesTractor · Aug 15, 2006

radman1 said:
DavesTractor
What is a floorplan?

Basically it is financing the dealer has in place to pay for the (new mostly) tractors on his lot. Car dealers do it also. Take a dealer with 50 units in stock. With loaders and a few backhoes, even with small tractors, you have nearly a million $$ of inventory. Some dealers own every piece on the lot, but it is rare if the guy has a decent selection. The manufacturers generally help put something in place (floorplan) where a dealer has x amount of time before he must pay for the tractor, or start making payments. The one consistent rule though, is that the day you sell it, you must pay it off your floorplan.