Is my math right-return on depreciation for a Bx23s

[ning]

If you're looking at the TCO, you need to compare the lost opportunity cost of the money you used to buy as well. Such as, if you drop $30k and 5 years later it's worth $15k, that $30k invested after 5 years would be worth $37k (at a meagre 4% compounded) - so that $30k you had is now a $15k tractorcompared not against $30k but actually vs $37k - after the 5 years, you've effectively lost $22k (viewed 5 years on)... of course, you still have to subtract from the $37k you'd otherwise have the cost of getting stuff done without the tractor.

I suspect that for most people - including many here on TBN, tractors are not an economically sound investment, when you run the numbers. I include myself in this - with the caveat that if I didn't have a tractor to do these things, they would simply not get done, because I'm not paying someone else to do these things... but then I end up complicating the above math even further because my land getting overgrown worse and worse (without work done) vs getting nicer and nicer (with work) just may actually pay for the tractor.

IDK.

Personally when I did the math it was more of
1) can I afford it as-is without TCO concerns
2) assuming the work has to get done, how much more does it cost me to have a tractor than to pay someone to do it (the math gets really fuzzy)
3) how useless do I feel when I pay someone to do something I could've really easily done myself?
4) how much fun am I going to have and how rewarding will it be to do all these things on my list?

If you're not a farmer and you're not in the "I'm an excavator" business, you probably don't *need* a tractor economically. But emotionally... we do.

 

[KenEtch]

I bought a 4 year old Kubota with 148 hours in 2014. Sold it with 400 hours in 2021 for just $100 less than I paid, so depreciation was practically zero, plus I did tons of work with it. IF you can find a suitable tractor a few years old, take excellent care of it as you use it, your return on investment ROI will be great. Plus you have the pleasure of self sufficiency, getting your work done on your schedule with your level of satisfaction.

 

[rScotty]

SNIP.......(I'm trying to be) smarter with my money and for reference I'm actually thinking I might be ahead, but want to know if I'm on the right track?

Also hope that makes sense?

When you start a thread with:
"

Is my math right-return on depreciation for a Bx23s" ?​

It doesn't much matter if your math is right or wrong.
Depreciation is a fuzzy concept and math is an exact science.
If you start with fuzzy concepts then all the math in the world won't help you to get anything other than fuzzy answers.

Math is the wrong tool for the job of deciding about a tractor.

But they sure are fun.
rScotty

 

[KenEtch]

I venture to say the majority of readers and contributors to TBN (all of us) enjoy tractors, the tractoring experience, and accomplishing work on our timetable exactly the way we want it accomplished is priceless. I love tractors, wrenching on them, driving them, maintaining my tractor, working with them. Being older & retired is a plus because I don't have to hurry to get things done. Tractoring is a hobby, my enjoyment, so depreciation tables are fire starters for the woodstove.

 

[ljjhouser]

I guess I don't have numbers or math figures about use tractor cost. But I do know what I have seen on the market. In 2017, I was looking for a GOOD used tractor, 40-50 hp. I saw an ad for a 2004 NH Boomer - 50 hp. I drove 75 miles to look at it. It looked like it spent its entire life sitting in the field. Paint faded and cracked, all 4 tires cracked up so bad they needed replacement. I got on, stepped on the clutch - which with no resistance went the deck. And then the clutch spring fell to the ground. That tractor was priced at $15000. Wonder what it cost new in 2004.

I looked for 1 1/2 year. I finally realized if I wanted a good tractor at a good value, I was being forced to buy new. And I did so. Today, four years later, we seem to be in a market where dealers don't even have new products. That means more and more, there are not good used tractors on the market for what we might consider a fair price. I saw the post where 10 year depreciation brought the 27K machine down 3k over 10 years. But, my experience has been you can't find ANY GOOD tractor 10 years old for $3k.
I agree with any that say the first few years will be a hit and after that, very little dep. But for most of us, owning a tractor is not all about cost and return. It is more about convenience and retaining the ability to do our own work. Remember, Most of us LOVE our tractor. It lets continue to think, plan, construct and do all those tasks and projects we could not do without them. It may be my favorite tool. I guess renting everything all the time would make a telephone your favorite tool. . best wishes, Larry

 

[bartjoebob]

If I have a machine thats out the door price is 27k which is the tractor, plus attachments, tax and freight. I Googled around for a depreciation rate and came to 45% in 5 years, as in the machines value will decrease 45% in 5 years time, with that being said per year my math says I'm losing approximately $2432 per year.

So my question is the above correct? If it is then my next question is would it be correct to say if was already paying someone $2400 per year to do a task that I would now do myself with the tractor that would be a return on my investment?

Trying to be smarter with my money and for reference I'm actually thinking I might be ahead, but want to know if I'm on the right track?

Also hope that makes sense?

For one, I would base your depreciation on just the tractor+loader. And maybe any proprietary attachments like mower decks. Universal attachments hold their value well. Also I think 5% per year is more reasonable (normally) But a lot of that depends on hours. A 5year old machine with 300hours is barely broken in.

Here is the part that throws everything above out the window.l though... Inflation. I bet in 5 yrs inflation for a new package setup like yours will be so expensive you could probably resell yours at the price you paid today. So yeah, tell the Mrs with inflation + resell you probably get a free tractor to use for the foreseeable future.

That is until you realize you need a bigger tractor

 

[DK35vince]

And then......In the current used market, my 2006 (cherry- 251 hr.) Kubota L48 TLB is apparently worth what the original owner paid for it new in 2006......15 years ago!
A totally crazy used tractor situation!
Yes,

I have owned my tractor for 20 years.
Tractor house currently has a couple of the same make/model listed for near to or more than I paid for the tractor new