Expected Depreciation in Used Tractors?

   / Expected Depreciation in Used Tractors? #61  
informative thread. will be selling out in several yrs, will be interesting to see what my '08 M8540 12sp hyd shuttle (open station) brings, purchased for 34k at the time, meticulously maintained. hope those seeking to purchase or sell at this time do well. regards
Hey Big,

These are un charted waters here. Entering into recessionary territory will bring uncertainty in many things. With inflationary control comes the dive into lower Sales of everything from comfort food to comfort cars, homes, and even tractors.

I stopped into Tractor Supply last evening. The manager knew I had cash... I was buying a ton of pellets, some dog treats, and some misc. goods. He made sure to let me know that he had "specials" in a number of departments, obviously trying to move product to maintain sales goals that are most likely showing some erosion as of late due to the feds changes in monetary policy. But, my point is currently there is discounting of general merchandise to ease the initial discomfort to the retail stores that will grow to encompass all durables, autos and tractors. All of that even though the pent up demand from the COVID years of 2021 and 2022 haven't yet been satisfied! That's what makes this so interesting!!!!

We are entering a recessionary mode off of a non completed demand cycle brought on by an external supply side shortage!!! You can't make this stuff up!!! Amazing ....

Last year folks would just whip out a credit card and make an impulse buy for a sale item. Not this year. At 24 to 30% for credit this year, that should be a big fat No, and the retail market is feeling that. Add to that the increase in the price of energy for heat and electricity, food, and durables... even rent and healthcare... well the big squeeze is on, and discretionary spending is taking it on the chin in a V E R Y BIG way!

In the months (or years ahead) we will see vendors in ALL levels of retail making concessions in their prices in order to move material.

So how will this impact both new and used tractors? Think about it...

If no one is buying or demand goes down the Mfg's may implement heavy discounts IF they have inventory that starts to build up. In turn that will drive DOWN the price of used tractors.

There is a squeeze here though for tractor dealers as one of the big benefits they could offer in the past was 0% interest....

It would seem that is no longer going to be a tool on the work table for the manufacturers to use to help move product. Sooooo... again they would have to build onto discounting of the retail price even MORE to spark sales instead of 0% interest.

That will drive down the retail of new, and the value of used as well... those two price variables are connected at the hip.

All that's left is determining the timeframe for this to play out. It will most likely be a curve, or even a harmonic waveform that, like a clocks pendulum, swings onto opposite sides of its swing until it finds an equilibrium.

So prices could go down in a year, then go up, but not as much, in another 6 months, then go down again (but not as much), until an equilibrium is reached in 3 to 5 years.

I guess timing is your friend if you're buying or selling, and timing will be based on your flexibility to hold (even though you may want a new tractor at a specific time let's say "spring") or be able to move (IE: you have the cash and are holding it for the right time if you are paying cash- or if your financing, the timing of your trade value AND interest rates are both in your favor.

In short it's really not something we can actually plan for in todays financial markets. It could all be based on one's need and the ability to wait or move instantly if required.
 
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   / Expected Depreciation in Used Tractors? #62  
sale will be down the line. i will then decide to sell indiv or through dealer (high volume market)@ 10% commission. looks like you've done more homework than i, regards
 
   / Expected Depreciation in Used Tractors? #63  
sale will be down the line. i will then decide to sell indiv or through dealer (high volume market)@ 10% commission. looks like you've done more homework than i, regards
I'm just old!!!
 
   / Expected Depreciation in Used Tractors? #64  
informative thread. will be selling out in several yrs, will be interesting to see what my '08 M8540 12sp hyd shuttle (open station) brings, purchased for 34k at the time, meticulously maintained. hope those seeking to purchase or sell at this time do well. regards
And now this, showing the move has begun in other durable goods...

"Stellantis, which manufactures the Jeep Cherokee SUV, announced on 9 December the closure of an Illinois plant resulting in more than 1,200 workers being laid off by the end of February 2023. It cited increasing costs of production of electric vehicles.

“It came without the slightest bit of warning and absolutely no details. It wasn’t even a rumor so it just dropped like a bomb,” said Deanna Viel, a worker at the plant Belvidere, Illinois"



 
   / Expected Depreciation in Used Tractors? #65  
Hey Big,

These are un charted waters here. Entering into recessionary territory will bring uncertainty in many things. With inflationary control comes the dive into lower Sales of everything from comfort food to comfort cars, homes, and even tractors.

I stopped into Tractor Supply last evening. The manager knew I had cash... I was buying a ton of pellets, some dog treats, and some misc. goods. He made sure to let me know that he had "specials" in a number of departments, obviously trying to move product to maintain sales goals that are most likely showing some erosion as of late due to the feds changes in monetary policy. But, my point is currently there is discounting of general merchandise to ease the initial discomfort to the retail stores that will grow to encompass all durables, autos and tractors. All of that even though the pent up demand from the COVID years of 2021 and 2022 haven't yet been satisfied! That's what makes this so interesting!!!!

We are entering a recessionary mode off of a non completed demand cycle brought on by an external supply side shortage!!! You can't make this stuff up!!! Amazing ....

Last year folks would just whip out a credit card and make an impulse buy for a sale item. Not this year. At 24 to 30% for credit this year, that should be a big fat No, and the retail market is feeling that. Add to that the increase in the price of energy for heat and electricity, food, and durables... even rent and healthcare... well the big squeeze is on, and discretionary spending is taking it on the chin in a V E R Y BIG way!

In the months (or years ahead) we will see vendors in ALL levels of retail making concessions in their prices in order to move material.

So how will this impact both new and used tractors? Think about it...

If no one is buying or demand goes down the Mfg's may implement heavy discounts IF they have inventory that starts to build up. In turn that will drive DOWN the price of used tractors.

There is a squeeze here though for tractor dealers as one of the big benefits they could offer in the past was 0% interest....

It would seem that is no longer going to be a tool on the work table for the manufacturers to use to help move product. Sooooo... again they would have to build onto discounting of the retail price even MORE to spark sales instead of 0% interest.

That will drive down the retail of new, and the value of used as well... those two price variables are connected at the hip.

All that's left is determining the timeframe for this to play out. It will most likely be a curve, or even a harmonic waveform that, like a clocks pendulum, swings onto opposite sides of its swing until it finds an equilibrium.

So prices could go down in a year, then go up, but not as much, in another 6 months, then go down again (but not as much), until an equilibrium is reached in 3 to 5 years.

I guess timing is your friend if you're buying or selling, and timing will be based on your flexibility to hold (even though you may want a new tractor at a specific time let's say "spring") or be able to move (IE: you have the cash and are holding it for the right time if you are paying cash- or if your financing, the timing of your trade value AND interest rates are both in your favor.

In short it's really not something we can actually plan for in todays financial markets. It could all be based on one's need and the ability to wait or move instantly if required.

Nice reasoning on the positive values of a recession. I hope you are right. It's kind of crazy to be thinking of a recession as being something that we want to have happen - but each time the pendulum swings things are different. Some times the alternatives to a recession are worse.

So here's hoping for a nice simple old fashioned christmas for everyone.
Maybe some extra maintenance will keep the old tractors happy.
rScotty
 
   / Expected Depreciation in Used Tractors? #66  
Nice reasoning on the positive values of a recession. I hope you are right. It's kind of crazy to be thinking of a recession as being something that we want to have happen - but each time the pendulum swings things are different. Some times the alternatives to a recession are worse.

So here's hoping for a nice simple old fashioned christmas for everyone.
Maybe some extra maintenance will keep the old tractors happy.
rScotty
Yes, I agree. We are alive and with those we wish to be, and that's what counts! ☺️

Cheers
 
   / Expected Depreciation in Used Tractors? #67  
We don’t have a lot of Californians moving here: they go to Arizona. We do have a fair amount of Texans who move here. Real estate is still selling fast despite interest rates.

That's about the same for here in Colorado. It's interesting where people come from. Few if any from California, Oregon, Washington, Nevada. If there's any movement it's towards those states rather than them coming to us. Texans and rural upstate New York account for a lot of new residents. Not hardly a trickle from the deep South.

It can be cold here.....Like New Mexico and Wyoming there is lots of oil field reveue for the state to play with.
 
   / Expected Depreciation in Used Tractors? #68  
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.
We always buy new because of KTAC and we replace tractors after 7 years with new ones. It’s the best overall for us to not have to deal with repairs on older units
 
   / Expected Depreciation in Used Tractors? #69  
We always buy new because of KTAC and we replace tractors after 7 years with new ones. It’s the best overall for us to not have to deal with repairs on older units
You must be using them very hard indeed. How many hours do they typically have on them after 7 years?
 
   / Expected Depreciation in Used Tractors? #70  
Around these parts, 40 some years ago, I was pointed towards Ford 8N gas machines for jobs around here. Typical price was $1500 to maybe $2200. That's about what I'm seeing in Farm Trader ads and on-line private sales. Bottom line is our money value is outpacing any depreciation, so the constant price is held or floating, dragged up by inflation. As long as your price/value keeps up with food prices, I suspect, you're OK.
 

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