Is resale value really all that important?

[N80]

When I bought my tractor, resale was a huge factor. My tractor is basically a luxury for me. If things get tight, and they will one of these days, I want to get as much money out of it as possible. But, mine is not an Ag tractor, nor do I farm anything but pine trees.

My B-I-L who owns a farm next to my property (300 cows, several thousand acres) has so many tractors that I'm never sure of the total. Newest one is about 1980, oldest about 1945 ( a Ferguson that he just started using again for pulling a little rake). He has at least four large JD's and two large and older Cases that he pulls 14 foot rotary cutters with. He's pretty much JD all the way. Needless to say, resale value has never been a factor. When one of them dies, he rebuilds it. Himself. The guy down the road has 3 nice NH's with cabs, a JD and a Ford. But for the most part it is JD country.

However, we were discussing the fact that since his kids are growing up and moving away he is losing a lot of his farm help. He feels like he will have less time to work on his tractors and that he needs to maximize his work time. He is also getting older and spending hours (days) on an old tractor cutting or baling hay with no cab is taking its toll. So he's thinking about buying something new or nearly new. He tells me that the local buzz among cow farmers is Kubota. His cousin down the road recently got one of the larger Kubota Ags. So the imports are making in-roads into the thinking of even die hard Deere folks.

 

[Egon]

Resale may/may not be important. It depends entirely on your situation.

I beleive there is a post here where a fellow wishes to sell his Mahindra but is not getting the respnse he wants.

 

[BXRICK]

Maybe this has been said before but...

IANAE (I am not an economist), but it seems to me that's it's not resale value that's of interest, but the difference between what you paid and what you can sell it for some period of time later that matters.

If I pay $100 for Brand X, and $150 for Brand Y, if I can later sell Brand X for $60 and Brand Y for $110, they both have a value of $40. Paying more for Brand Y did nothing for me in terms of resale. Brand Y may have had other characteristics that made it a better buy, but resale wasn't one of them.

Which translates in tractor terms to paying more for a "big three" tractor vs. an off-brand that is cheaper. Is the higher resale value a result of the previous owner passing along the premium that he paid from the big three manufacturer, or is it a result of the tractor actually being of higher quality?

Quality, and how much something is worth is largely a matter of opinion.

Sometimes one sees this referred to as how much value an asset looses as a % per year. This eliminates the absolute dollars from the comparison.

Certainly there are other factors, such as the cost of money, business depreciation, etc that might come into play.

 

[Trahere]

When I bought my tractor I intentionally bought it for re-sale! I knew I would need it for two days and would then re-sale it! Seventh post and beginning to show some promise at it!!!


A tractor is as good as the ground it rolls on!

 

[IH3444]

Neighbor just traded in his new B3030 hydro, for a L3130 GST. The same Kubota dealer he bought from took his B3030 in trade, and allowed him $2K more than he paid last year for it. However the deal went down, the Kubota dealer didn't hesitate taking the B3030 in trade, and offered him more than he paid for it. How's that for retaining value. Them there is the much older story of another friend who bought a new JD 18 years ago for $4400, traded it in, and was allowed $7700 towards the purchase of a new tractor. Something to be said for the top 3 brands holding value. Have heard the same about quality Stihl chainsaws being traded, and holding their value over time.

 

[Woodbeef]

Neighbor just traded in his new B3030 hydro, for a L3130 GST. The same Kubota dealer he bought from took his B3030 in trade, and allowed him $2K more than he paid last year for it. However the deal went down, the Kubota dealer didn't hesitate taking the B3030 in trade, and offered him more than he paid for it. How's that for retaining value. Them there is the much older story of another friend who bought a new JD 18 years ago for $4400, traded it in, and was allowed $7700 towards the purchase of a new tractor. Something to be said for the top 3 brands holding value. Have heard the same about quality Stihl chainsaws being traded, and holding their value over time.

Were the deals priced as cash deals before a trade-in was considered? Or were they trade-in priced from the begining? Were the tractors purchased at full list? If so then the trades were overvalued and covered by the discount off of list not going to the purchaser. It can give the false impression of the trade holding value over time........

 

[Turbys_1700]

I just purchased a NH 1720 with 245 one owner hours on it for 7K and my old Yanmar...I valued the Yanny at 2K so that's 9K for the NH...The big three has excellent resell value...It's all demand driven...Most folk around here want either Kubota's, Deere, or New Holland...Anything else is just off-brand although I do consider Massey certainly as a major...Their are just more Kubota's purchased in the smaller units with NH and Deere having greater sales in the larger AG tractors...But...Kubota is making gains in the larger AG maket here...