Is resale value really all that important?

[Woodbeef]

Ok now let me state from the get go,I'm looking at this from an Ag point of view. If a tractor is correctly chosen from the begining why is resale value as important as some on here say? These tractors should last 20 or more years if taken care of properly. Could it be because the wrong-for-me tractors are often purchased due to over analizing specs? Rule of thumb in Ag is buy a tractor one size bigger than you think you need,then demo every candidate for at least a couple of days,then make your decision by the seat of your pants! Ag tractors are normally traded at 3,000-4,000 hour intervals if traded at all.

 

[Dargo]

I am surrounded by farms for miles and miles. The resale value isn't nearly as important to the farmers as a tried and true brand. When their entire income depends on the tractors working, I see zero "off" brands in the fields around here. Not one single farmer is willing to put his entire family at risk by taking a chance on a brand that hasn't proven itself. Talk at the grain weigh stations in the fall goes a long way. If a farmer 20 miles from here bought a "insert off brand name" tractor and it broke on him, they all will know.

If you are using something to mow your lawn, clean your ditch, or hog your field, you can afford to take a chance. If you can get by without it, then you are more likely able to take the chance. If you have to have it, the general rule with farmers is to not take any chances. Therefore, resale is a product of perceived (or proven) reliability. Afterall, when you buy a used tractor, you are buying whatever time is left in the machine. If it's unreliable, it won't be worth squat. If it's reliable and productive, it will be worth quite a bit.

I suppose that being surrounded by farmers is the reason that there is no off brand dealers in my area. Many have popped up over the years only to go under. I think about 50 or 60 miles away is the closest dealer who carries what would be considered an off brand. Whether the farmers are right or wrong, it sure puts a hurt on a dealer trying to break into this area with an unknown brand.

 

[john_bud]

I read your question and was thinking of an answer, then read Dargo's post...

All I have left to say is "he's right".


jb

 

[ovrszd]

Very well stated. I too live in Ag country. I see the same things where I live. There are basically two brands of tractors. Then there are two other brands that you see occasionally. Nothing more. I've noticed this pattern to be true in other Ag areas that I've traveled into. The top couple brands may change color but there will only be a couple that you see in abundance. I agree that is word of mouth reputation.

My neighbor is 87 years old and still running a cattle operation. He's a diehard JD man, wouldn't own anything else. We've always had JD small Ag or lawn equipment. This summer my wife bought a Kubota. He stopped to look at it the next day while she was out mowing. He just stood there shaking his head and finally said "Does Richard know you bought this?" She said yeah he knows. Wayne just kept shaking his head. In his mind he just can't see anything that doesn't fit into those four brands that populate our farming community. I couldn't sell our Kubota to him for half what it's worth.

So, in my community, if it isn't green or red, your resale value just went in the gutter. So when you buy a different color, you better plan on keeping it or selling out of our area.

 

[Dargo]

Ovrszd made me laugh because of how the local farmers talk about the one (yes, 1) local farmer who has one (yes, 1) M series Kubota mixed in with his tractors. Although he only uses the old M series Kubota in his strawberry fields, he's known as "oh, that guy with the foreign tractor" by the other farmers. If the guy keeps his M going another 20 years they may ask him what brand it is. Some think he bought it from a state highway department auction because all the county equipment is painted orange...trucks, cars, etc.

 

[roxynoodle]

Interesting perspectives. I also live in a county whose primary industry is agriculture. The 2 biggest local dealers are JD. The next 2 biggest dealers sell Kubota and New Holland and one of them sells Case. The Kubotas are very well accepted and even the guys still running antique Farmalls, Allis Chalmers and Olivers have good things to say about Kubota. Even if none of them owned one personally they seem to all have relatives or friends who do and will say, "Those are good little tractors." I thought I would cause a commotion bringing home a grey market Yanmar, but so far anyone who has stopped to look at it has been complimentary. How easily could I sell it around here? Well, that I'm not sure about.

 

[Farmwithjunk]

Ok now let me state from the get go,I'm looking at this from an Ag point of view. If a tractor is correctly chosen from the begining why is resale value as important as some on here say? These tractors should last 20 or more years if taken care of properly. Could it be because the wrong-for-me tractors are often purchased due to over analizing specs? Rule of thumb in Ag is buy a tractor one size bigger than you think you need,then demo every candidate for at least a couple of days,then make your decision by the seat of your pants! Ag tractors are normally traded at 3,000-4,000 hour intervals if traded at all.

Well, you nailed that one! I'm a firm believer that most people over analize specs. Most specs handed out by manufacturers are created to confuse anyway. Now on to the real question.

RESALE of Ag tractors;

I farmed on a small scale for most of my adult life. I decided to scale back after last season. I grew up on a small farm too. So, I've got some opinion, based on some experience with the subject at hand.

In 35 years, I bought a total of 7 tractors with the intent of keeping them and using them. (I've bought numerous tractors to resell with $$$ in mind) Out of those 7, 2 still remain. One has been with me for 35 years another for 27 years. I sold one last fall, only to replace it immediately with one just like it, only in much better condition. The one I sold was here for 32 years. Resale value had very little to do with any of those tractors. The others were either lemons, worked to an early grave, or I just wasn't happy with them. In any event, I hardly considered resale when I bought them, figuring to KEEP them beyond their "valuable" years.

Anyone who runs a business of any description will always consider what something is worth at the time of purchase, and consider what it will be worth down the road. That "worth" is generally more attuned to how much will it make for me, as opposed to how much will someone give me for it someday.

And who would have known 35 years ago that these old relics would hold their resale value, in SOME cases, regardless of condition?

ENough of this talking in circles.... I always HOPED any tractors I bought for the farm would be worth a few bucks someday, but my main concern was will it pay for itself while I still own it? I never was big enough to play the game of use it for 3 years and trade on another new one. I'm not sure "low budget"/"low tech"/"low overhead" me could have done that anyway.

Oddly enough, every tractor I ever owned sold for more that it's original purchase price even after years of hard work.

 

[HEC]

JD tractors are very popular up here in Maine as well , but where do people think they are made,they are just as foreign as any other brand,especially JD as they are made in several different countries.Kubota is very popular with the weekend farmer, contractors,etc. and has a very good resale value.I sold an old L235 a while back and got almost what was paid for it new,I wish I had lots of them as I got so many calls on it.I advertized another off brand tractor to sell and what a hard time I had to sell it.I think resale is important as you never know when your needs may change.I few of the farmers up here tried some off brand for a short while but went right back to what they felt were the most dependable for them.

 

[neverenough]

Ok now let me state from the get go,I'm looking at this from an Ag point of view. If a tractor is correctly chosen from the begining why is resale value as important as some on here say? These tractors should last 20 or more years if taken care of properly. Could it be because the wrong-for-me tractors are often purchased due to over analizing specs? Rule of thumb in Ag is buy a tractor one size bigger than you think you need,then demo every candidate for at least a couple of days,then make your decision by the seat of your pants! Ag tractors are normally traded at 3,000-4,000 hour intervals if traded at all.

Resale value is important to a lot of farmers. A lot of farmers don't buy equipment and run it into the ground, they trade up becouse they can't afford to be down when the window of good weather to plant, bale, chop, combine, ect... is so small. I'm talking about making your living off of farming, not the ones who work all week and farm 150 acres on the weekends. The "weekend warriors" are the ones who generally buy the used tractors the full time farmers trade in.

Resale is also a barometer of the quality of the over all line of equipment. It's not really all that much different than cars. People rely on their cars to get them to work, there for, most tend to buy either new, or a couple years old. You have some that just buy a brand becouse of loyalty, others look for the resale, and some buy becouse of color or style. Obviously the latter is the worst way to buy. The resale way seems to be the new trend given the fact asian car resale values are high, and their new car sales are increasing every year along with market share.

Then again, you have those who buy a tractor and don't use it enough to wear it out over their lifetime. Resale is not important to them. Nothing wrong with that either, to a point. This is where buying a lower quality/price brand may work just fine.

Any way you look at it, the most important thing is getting the best value for your budget. If you can afford the high end equipment, and plan on using it, it's most likely best to go that route. Trade in every few years and not worry about break downs. Buying lower end new, maintaining it well, when the need to use it is not as great, may work for you too. Nothing wrong with used either. If you can't afford, or don't want to spend the $$ on new, yet it has the features you want, makes for a viable option.

 

[BillyP]

There are three kinds of men;
1.) The ones that learn by reading
2.) The few who learn by observation
3.) The rest of them have to pee on the electric fence for themselves.

But it takes a little of all 3 to make really smart man.