How do you calculate the "repair or replace" option for powered equipment?

[zzvyb6]

Re: How do you calculate the "repair or replace" option for powered equipment?

I use a different answer for my stuff. I go to a lot of Estate sales where stuff like this equipment is going for a low price because the owner has departed and the house and garage have to be emptied. I use estatesales.net to search locally for places with stuff I can use or fix. I've quit buying to use and started buying to repair, paint, shine and sell. That leaves me with a few chain saws, some garden carts, a couple of wood chippers, two lawnmowers and even a bunch or playing horse-shoes. When Spring comes along, the stuff flies out of my machinery shed, usually at a price 2 to 4 times what I paid for it. Even aluminum 10 and 12 step ladders. Buy for $5 to $10, sell for 40 to $60. I usually bundle up a pile and make an offer. If they won't go for it, it's their pile. Passed up a lot of gas and electric snow-blowers this past Summer. Probably ought to have snagged a couple.

 

[MossRoad]

Re: How do you calculate the "repair or replace" option for powered equipment?

On a personal level, it depends on the equipment, how much you enjoy that piece of equipment, how much use you get out of that piece of equipment, etc... cost is not as big of a concern if you consider it entertainment and get satisfaction out of keeping something running that works good for you.

However, from a business standpoint, you have to look at your R.O.I.... Return On Investment. If its going to cost you more in parts and labor to repair it VS buying a new/different one VS how much use you'll get out of the repaired one VS how long a new one will last, etc... it can quickly make your decision easier to replace or repair something. Its bad business to spend money you don't need to spend.

One example I have is we bought an old IH2500b tractor loader for $5K. We used it hard for 10 years. We no longer needed such a large tractor, so I wanted to sell it. Market value was then about $3500. It needed $1600 in repairs to bring it back to market value. At the I.H. salvage/parts yard, the parts I needed were going to cost me about $1600. The salvage yard man offered this to me.... You need $1600 in parts to get $3500 out of it. I'll give you $1900 for the tractor as it sits. Hmmmm.... that's a wash and I save a couple nights of knuckle busting. Sold! I had no sentimental attachment to that tractor. It was a tool. No different than a long-term rental, in my opinion.

Anyhow, some newer stuff is not as good as the older stuff when it comes to durability, but some newer stuff is nicer to operate than older stuff when it comes to comfort and convenience and it may actually do a better job than older models, save you time, money, etc... I guess each item and each person's personal circumstances are different. Its a balance between what makes business sense and your own personal satisfaction.

 

[JDgreen227]

Re: How do you calculate the "repair or replace" option for powered equipment?

Excellent points, MossRoad....however a business can write off part of the cost of equipment over the years while a homeowner cannot. IN my case that is enough to tip the scales toward repairing an older model...I don't use it often enough to justify the expense of a new one.

HOWEVER...because my brother learned I am handy at fixing older snowblowers, he rounded up these at a low price and asked me to get them running and he will either use or resell them.

 

[MossRoad]

Re: How do you calculate the "repair or replace" option for powered equipment?

Excellent points, MossRoad....however a business can write off part of the cost of equipment over the years while a homeowner cannot. IN my case that is enough to tip the scales toward repairing an older model...I don't use it often enough to justify the expense of a new one.

HOWEVER...because my brother learned I am handy at fixing older snowblowers, he rounded up these at a low price and asked me to get them running and he will either use or resell them.

I agree with you. Sometimes I do things because I enjoy them and that puts the cost lower in my priority. Other times, my wife and I have to run our marriage like a business, and make the decisions based on cost.

Last month I finally took two nearly identical snow blowers, each with its own set of problems, and made one good one.... these were 1986 Sears blowers. My new wife and I bought one on sale, my mom and dad liked it, and, since my wife had taken their 24 year old model (me)! :laughing: they bought an identical unit, but with electric start. Mom and dad are long passed, but I kept his snow blower in case I ever needed parts. So I've had his sitting in my garage since 1997! hahahaa I finally needed it this year.... pretty dependable little blowers. :thumbsup: