Expected Depreciation in Used Tractors?

[Yander]

It is my experience with a used tractor you can buy it and use it for 5 years around a 5 acre property and if maintained and stored indoors and you don't put crazy hours on it you can sell it for the same or perhaps more money 5 years later. I have done this a couple times.

 

[GB540]

Why (Unless needed for the tax deduction) would anyone buy anything new? Serious question. I've bought new before but the best buys are always used.

Warranty and no risk of getting somebody else's problem. I can afford to buy, but I can't afford to discover why the last person got rid of it...

Any pre-emissions tractor is going to hold its value, provided it's not abused to death or just plain worn out.

What'd hurt is an emissions tractor that just went off warranty. Either plan on keeping it, or not getting what you hoped.

 

[Gopher Baroque]

Asking, or actually selling? I see a lot of crazy asking prices on cars, some people confuse those for selling prices, in casual conversation.

I look on CraigsList off-and-on at old tractors and attachments. The ads that make me wonder about the backstory are the ones I see asking way too much for junk, then I take a break and come back six months later to CL and see the very same ad with zero changes. And the guy pays for the ad each month to not sell it.

 

[Ed755]

I don't follow the market, but curious, a 1987 JD 755 with rear blade and front end loader (midmount mower is history), with 1500 hours, good running condition, what would a price range be for that?

 

[jyoutz]

I haven't seen prices go down yet. Seem to be holding steady.

What I have seen is purses and wallets snapped shut and people spending less. Mostly I'd say it's due to the "build back better" dumpster fire. Housing prices are still high here but they're not selling 2 seconds after hitting the market. Those coming soon listings have stopped.

People are still expecting to get top dollar + for everything, reality just hasn't hit them yet.

You must live in an economically depressed area. Things are still booming where I live.

 

[Yander]

I don't follow the market, but curious, a 1987 JD 755 with rear blade and front end loader (midmount mower is history), with 1500 hours, good running condition, what would a price range be for that?

Depending on condition, $8 - $10K in my neck. That isn't low hours but isn't bad either. If that tractor was in really good condition and maintained well might even get $11 or $12k.

 

[jyoutz]

Why buy used when you can buy new?

https://www.marketbook.ca/listings/construction-equipment/for-sale/list/category/1046/loader-backhoes/manufacturer/kubota/model/m59

Used older ones are selling for more money now than I paid for brand new. Good condition used ones are like finding sasquatch.

Plus, there is zero percent financing on some brands.

 

[varmint]

I no longer follow the market, but I'd guess that good machinery keeps its value, especially when prices and complexity go up. The two Kubotas I bought used and resold after some years of service both held their value nicely, and I certainly expect my present L3400 (also bought used, from the kind of seller you just hope to run into) to do the same!

 

[OzarkChris]

Why (Unless needed for the tax deduction) would anyone buy anything new? Serious question. I've bought new before but the best buys are always used.

I somewhat agree; however, at least around here, some used tractors are selling higher than new (if you can find new). Maybe not in literal price, but when you add used financing costs vs new financing costs in some brands its actually less expensive to buy new.

Some of us, myself included, don't have $50-100K+ just lying around to buy without financing. In the first year of Covid, I got a really sweet deal on a 2 year old 55hp Mahindra Cab shifter w/~100hrs. Traded in a Kubota ls-2501 hydro that was just too small for what I needed it for. I got more in trade-in for the Kubota (&fel) than I paid for it and HD bushhog, HD Tiller & 3pt dragger.

The dealer that sold it to me, called last summer offering me a TYM 100hp cab w/350 hrs plus a batwing straight trade with 2% financing. I didn't take the offer because of the price of fuel.

So, as I said to begin with, sometimes it is better to buy new, sometimes better to buy used

 

[k2man]

Why (Unless needed for the tax deduction) would anyone buy anything new? Serious question. I've bought new before but the best buys are always used.

If I had the money, I would buy a new tractor. But the value of anything is not the dollars, it is what do you have to give up. I’d rather have an an old tractor and all the tools, a shed and all the machinery to fix it rather than just a new tractor.

 

[Hodado]

I’ve always tried to see what local dealers are selling used tractors for and then buy from a private seller for less.Generally anything with a good loader on it holds value well

 

[BnRidge]

Now, you have me wondering how many people take inflation into account when referring to past events and was this a good deal?

No one does. A 1971 deere 4020 is now averaging $20k. Originally 10-12k. That original money has inflated now to $70k, but ask anyone and the depreciation is nill, and it has really held its value, like it's some kind of investment.

 

[rScotty]

A good lengthy recession might sort things out a bit. Unfortunately Governments like massive inflation because it magically makes their debts and foolish spending smaller.

Yes, I agree with part of that. A lengthy recession would be good; it's what we probably need to have happen to save the economy from itself. Of all the possibilities, a long recession just might be the most benign. That and some reduction on gov't spending would restore some of the economic health.

Enough inflation to trigger a recession is the goal... but not too much. The problem there is that when inflation goes up the government risks having to borrow at higher interest rates to fund their own bond purchases. Then it can go bonkers.
rScotty

 

[sunandsand]

Bought new (Kubota 2601 + FEL + belly mower + rotary cutter) because a) I can depreciate it, b) I got 0% financing with zero down, c) because I really don't know a heck of a lot about tractors (but learning fast) and am not qualified to assess good one vs. bad one, d) I needed it to go to work NOW, not after I learned to fix whatever might have been wrong with a used one, e) warranty!!!!, f) I didn't want to get sidetracked into another "project" - I have enough of them right now.

To be honest, I bought a tractor not because I wanted a tractor, but because I needed some land cleared, then mowed, then pallets unloaded, etc. etc. The tractor is a tool, the fact that I enjoy using it is a side benefit. It has paid for itself a dozen times over, and that is just so far. There are times when having your own tractor is like finding a thousand dollars in your wallet that you didn't know about.

It is like a camera - nobody buys a camera because they want a camera, they only buy a camera because they want photographs.

YMMV.

Best regards,

Mike/Florida

 

[rScotty]

No one does. A 1971 deere 4020 is now averaging $20k. Originally 10-12k. That original money has inflated now to $70k, but ask anyone and the depreciation is nill, and it has really held its value, like it's some kind of investment.

For that price it would have to be a decent JD 4020 with everything working right and in decent shape... But they are not only out there, several shops are making a living refurbishing those old 4020s.

So it seems like it really was a good investment. And why shouldn't it be? The industry hasn't changed all that much, the tractor did 50 years worth of valuable work which has to be included, and you can't buy anything near that good for that money today. Plus there is an active used market.

What I wonder is this - If the industry had made real progress since 1971, would that old tractor still be as good an investment?
I kind of think it would be, because the work it does hasn't changed.

rScotty

 

[Atlfinfan]

Why (Unless needed for the tax deduction) would anyone buy anything new? Serious question. I've bought new before but the best buys are always used.

I've bought 2 new tractors in the last 10 years+- because I am not mechanically inclined......at ALL, so I need the warranty. Also, because of that, I have to worry WHY person is selling a used machine. Could be it has problems I won't notice.
I sold the first one with the house we had. 17 acres of pasture and some woods. I didn't think I would need another one where we were moving to, 7 acres of woods. Sure wish I had the first one back. 36 hp vs 25. I guess, once you have a tractor, you can't live without one.

 

[BnRidge]

the tractor did 50 years worth of valuable work which has to be included

Yes, this is where the money is. But that's usually omitted when talking buying and selling. It's more fun to say I bought one year, sold it later, and "made money" on the transaction, when that may not be (probably isn't ) the case. That 4020 cost 50k just to keep it around based just on resale value. Whether or not it made money other ways is a for the accountant to figure out.

 

[Sodo]

For desired models the value is rising faster than inflation. And the older tractors don’t have infuriating electronic systems.

 

[bdhsfz6]

Seeing the post this morning about the decline of the new tractor market made me think.
What is the expected deprecation of used tractors?

How much per year or per hour can you expect your equipment to lose in sale value on the used market?

I'm sure it matters if you are picking up a JD or Kubota vs other brands like Kioti, TYM etc. What difference does that make on a used sale?

Would it be fair to say that you lose 30% the first year just because of the dealer costs?

If you are picking up a used tractor from a dealer vs a private party how much more would you pay?

Did people who bought in late 2020 to mid 2022 potentially lose out if they were expecting to sell now because of the loosening of the market?

Hopefully this makes sense. I appreciate your thoughts!

Obviously age and condition will dictate how much a tractor depreciates. In my case, it's hard to judge actual depreciation. I've owned 7 Kubota tractors over the last 45 years. Each was purchased new with a trade. In every case, I got what I paid for the tractor in trade in value. All were garage kept and in excellent condition with less than 1200 hours.

 

[88bradb]

All of my tractors are old enough, they could sell today for more than I paid for them.

With the .gov induced inflation, seems like it doesn’t even have to be very old anymore.

$17k was new price.

View attachment 774696

These are current on going auctions.
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However much the dealer has to mark it up to cover operating costs, overhead, etc. vs the guy that just wants to sell a tractor, not trying to make a living.

I believe the prices posted on tractordata.com are without a loader. (Something to keep in mind)