New vs Used (from a financial perspective)

[RoyJackson]

If you buy used (but not looking for an antique), look for a machine that is 5 years old (or more). That's about when the depreciation curve levels off.
Not a hard and fast rule, of course...just an observation.

 

[Soundguy]

I seriously doubt at the 10yr level you will be into higher maintenance costs on a well maintained average use scut/cut or even ag tractor.


heck.. looking at that .. getting a 35-45 hp old tractor, fixing it up vs buying a new 35-45 can be a huge difference ( with big differences in resale too. ) for example.. you can buy a vintage oldie for about 2500$, and put 2500$ into it and have almost a 'new' functioning machine that has a reasale of about 2500$ but will work fine for a looooong time. thus an investment of around 5000$ ( or so ) dollars gets you plenty of work done, with a possible 50% resale. ont he other hand.. you could go new and pay, I'm assuming here.. nearly 3x as much and then have a newish machine for a decade or more, with regular maintenance.. with resale taking a depreciation hit immediatly by a thousand or two.. then slowly tapering off over the next 5-8 ys.. and after 10+ resale will really take a hit.


depending on just how much work you plan on doing.. might be better to take out a 10K$ cd or ira / anuity and then spend the money ont he classic and get it fixed.. especially if you don't need alot of belles, whistles, chrome and gongs, and if it will be an intermitant use machine... couple decades later the classic is still gonna be worth that 2500$ you paid for it, and the scut / compact won't be worth much more.. though you paid 3x more for it or so... then there's that cd / ira that's been setting in the bank for 20ys. right now if you lock in on fdic stuff for 4-5 ys you can get 2.25 or so.. a fixed non fdic annuity thru an ins co.. maybee twice that. if you feel like gambling a bit on the health of the company..

good luck

as yoda would say.. 'cloudy the future is'




soundguy

Most financial consultants will tell you that buying a new car is a bad decision from a purely financial point of view (It can still be a good personal decision if the financial loss is equal to the joy of owning a new car). The depreciation in the first few years of owning a car is too high to justify the purchase. I was wondering if the same is true of tractors If it is, then are there other reasons to buy new?

I am figuring ownership costs to be depreciation + operating costs + lost investment income from the purchase price (which I figure to be 5-6%... I am perhaps foolishly optimistic about the economy). I figure that an older tractor won't depreciate and won't lose as much investment income , but will have higher operating costs. I am assuming a ten year time frame and am looking to buy a sub compact or roughly equivalent tractor.

If I buy used, how old should the tractor be? Obviously a really old one will hardly depreciate at all, but will have higher operating costs. I don't have the tools or skills to do repairs on my own, so it will be going to a mechanic or dealer.

Just to concretize the decision a bit, our local Kubota Dealer is selling BX2360s with a 60 inch deck for 11,700.00 and is offering 0% financing for 60 months (which cuts down on lost investment income). Taxes and fees come out to about 900. Alternatively, I have seen used BX's with similar HP and cutting deck with under 500 hours going for 6.5-9K depending on the condition.

 

[Don87]

Last year when I was looking, used SCUTS (some as much as 10 years old), were selling within 2,000 dollars of a new one.

There was no way I was buying used at those prices.

 

[houstonscott]

I think there are good reasons to buy new both in cars and in tractors. These are my thoughts;

You get what you want. Your going to own it for 30 years why not get what you want.

You control the break-in of the machine and engine. Again your going to have it a long time and that break-in may is important to it lasting that long and being reliable during that time.

You get the warranty: If there are problems they usually happen in first few years.

A tractor is about as easy as any machine to abuse. You know the history. And that's big if your into keeping it for a long time and most are.

The more you spend the more you risk. I like the idea of new on a machine you might own for so long. Only go used if you can't afford new.

HS

 

[Gizmo2]

Subcompact and Compact tractors, I'd suggest buying new. These smaller tractors have a tendency to be over used and abused. The larger tractors not so much, bigger dollars. I sold my 1988 JD650/FEL/BH in 2008 for $10,500.00, bought it new for $14,500.00. Depreciation = $200.00 per year.