Depreciation Curve for Used Tractors

[dodge man]

When I traded in my 10 year old BX 2350, 700 hours, I’d say realistically it was worth a little over 50% of what I paid for it new. That seems to be the case with the smaller stuff.

 

[coobie]

Used tractors priced to sell at a fair price will sell quick.IMHO most folks are looking for new tractors & warranty with 0% down 84 months of payments.

 

[finn1]

Bought a five year old Deere skid steer for $10 k, with the intention of selling it when my project of the day was complete. Life happens and I put 500 hours on it over the next 10 years. Dealer offered me $10 k on trade, and said he thought he could get $12k retail.

I took the deal, he listed it for $13.5, and sold it for $12.5 within a few weeks.

All it cost me for ten years was a hydraulic hose, oil, and filters. Probably less than $200.

 

[johncanfield]

We depreciate all new and used equipment bought for our ranch, I have no idea what the IRS rules are. The financial people we use take care of that, but that wasn't your question.

I recently sold a 1998 Kubota L2900 I bought new for $14k, the deal included several attachments. I paid $20k for the tractor and loader. Considering the cost of money and inflation I figure we realized about 40-50% of our initial investment which is way better than any vehicle. I bought a 1998 Komatsu D39P-1 dozer (20,000 pounds) at auction for about $20k including shipping and sold it a couple of years later for $22k.

Compared to a car, equipment is a much better investment.

 

[LS Tractor Owner]

Problem with used tractors might not be just the price... look at used tractors that are at dealers... they sit there for long periods of time. It is too easy for someone that is tractor shopping to be lured over to that shiny new tractor that is available for no money out of pocket and very attractive interest rates.

I was privey to some dealer information for our region... 70% of all the tractors sold (Over 450 units within last year) were under the 45hp level, of which 60% of those were less than 30hp. A whopping 80% of all the sales were financed.

I have to be honest... if I was not able to finance, I would not have a tractor! With that being said, it is very difficult to get financing for used at the same attractive rates as new.

In regards to the basis of this thread, I purchased my first new tractor in early 2017 (a SCUT) with no money down and 2.99% interest. I sold it after having it for 26 months for almost what I paid for it (maybe $500 less), plus a few attachments (that I made $1500 profit on). I paid the balance owed on the tractor and netted about $8000 cash. I applied about half of that to another new tractor (a compact) and financed the balance over 84 months. I already have positive equity based on what I owe vs. trade in value (trade in value being much lower than selling privately) within 1 year....

I have not really experienced any major depreciation on these two tractors.... my 2019 truck... well that is just plain a different story... after putting over $10,000 down on a great deal... I would be very lucky to get what I owe on it ....

 

[Industrial Toys]

It's too bad the whole world has been hood winked into all this debt. There is still a whole segment of the population that does work on CASH. Mostly business people of some sort, usually.

 

[joefromga]

Don't forget inflation.

Your $10,000 tractor in 2000 would cost you $15,000 today. Inflation is a hidden tax that steals money.

Still not near as bad as a car but cars wear out much more than equipment.

 

[ovrszd]

Depreciation curve? Or appreciation curve?

I bought my old John Deere 2020 (early 60s model) in 1997 at a farm auction for $7000. TractorData has that model selling for $5800 new. Old Ford 8Ns and 9Ns are selling for around $4000 around here!

I paid $8,500 for my 1984 Ford 3910 FWD tractor. The 2wd version sold for $16,000 new in 1989. I must have did pretty good!!!!

I don't know what you'd have to pay to get a comparable tractor new today. Well, not sure there is a comparable tractor. Old iron is so well built and designed. That's why they still exist.

 

[fried1765]

I paid $8,500 for my 1984 Ford 3910 FWD tractor. The 2wd version sold for $16,000 new in 1989. I must have did pretty good!!!!

I don't know what you'd have to pay to get a comparable tractor new today. Well, not sure there is a comparable tractor. Old iron is so well built and designed. That's why they still exist.

Time for me to go down and hug my 1070 hour 1989 Ford 1920 again!

 

[oosik]

I bought my first tractor, brand new, 1982 - Ford 1700. I traded it in - 27 years later - same dealer - original price minus $400. Granted it was a trade in but I also got a good deal on the new tractor - 2009 Kubota M6040.

The really sad thing - I don't think there is a 2020 tractor that is comparable to "old iron". In the days of "old iron" - the concept of engineered obsolescence had yet to be thought of............