Resale value as a function of purchase price

[Geotech]

Considering the amount of money this toy will cost, it is not unreasonable to assess how liquid its value is in case life changes my plans. That said, it is first and foremost a toy, albeit a very useful toy. Heck that land it will sit on is also a toy. But that toy land has some value and so will the tractor. I only "need" an L2501 or equivalent to satisfy my pension for the toy. However, more toy is always more fun than less toy. That said, I could consider spending extra cash on an L4701, or equivalent, to enjoy the tractor even more. BUT, if I stand to lose $7,000 to $10,000 on a bigger tractor in case of a need (or want) to sell versus a $1,500 to $3,000 loss - that resale value is a reasonable consideration. Not the only one, but certainly one. I'm not quite 40 years old, so it is altogether possible that this tractor may not be around in 10 years. Now, if we were talking boats, travel trailers or other things that evaporate in value in a few years, then yes, who cares? But I don't buy those things, either. Not really trying to make a case for using resale as a metric for purchase decision, but I do think it's valid. Mostly just curious if others noticed the trend in bigger tractors having a bigger discount on used pricing (as a percentage - not just in absolute terms).

 

[Texasmark]

Higher resale generally means more up front sale price. I view it as what I can use it for- and don't worry about resale. I generally keep things forever.

Me too. Obviously with my new tractors being Bransons, I didn't worry about them being little known. I bought them for what they are, not what somebody else might think they are in the future....if that ever happens.

 

[Handloader109]

I see this as a very small issue. And I even own a cabelas tractor. In my opinion, if you are worried about resale then just buy a larger used tractor for an already discounted price. Used probably won't t go down much more. But you lose money on everything you buy excepting, at least in most cases, your house. Cars, boats, 4 wheelers... all are with less with age. Tractors too.

 

[mred2]

Resale never came to mind. The main item was parts. I had an old backhoe for over 25 years. Sold only because all to good was used up and I no longer needed anything that big. My first tractor was used. I kept it until to cost of repair was half the cost of another used one. The next one, I still have and it still runs. But parts are hard to find, ISEKI, and no FEL. I needed a larger tractor with FEL. My biggest concern was being able to find parts in 10 to 20 years. If parts are there, there will be a resale value. Resale would be important if I planned to only keep it for 5 years.

 

[CMV]

I will rarely consider "resale value" on anything. I either need/want it or I don't, but what it might be worth sometime down the road isn't a factor*

* Sometimes better to buy a used machine to complete a project with intent to sell once not needed. I'm pretty much considering the purchase price there - can I get my $ back out of it in 6 months (or whenever). Say you needed a construction backhoe for 6 months for example. $20k gets a decent enough shape used machine. If I can do that and be reasonably sure I'll get real close to that $20k back when I'm done, that's months & months of rental fees saved.

* I would consider it a separator for something like a JD or Kubota vs a smaller/less popular brand. But way down the list on things to compare. If I were looking at 2 machines and they were pretty much tied on size, power, warranty, comfort, features, visibility, control layout, cost, etc - all the things I actually care about, resale value might get some consideration to help separate them. It would rank down there with color or cosmetic appeal however.

Another thought came to mind after I posted this.....trade-in value/consideration. One of our local Kubota dealers for example won't take other brands on trade. Will sell on consignment for you (for a %), but won't straight up take trade in unless it's a Kubota. So I could maybe see if you were torn between not only different brands, but also different sizes inside those brands, if one "guaranteed" a very high trade in value if you change your mind within 6 months and wanted the bigger one instead. Might make sense there to go with the brand that will give you most back out of it if you wanted to upsize right away.

 

[plowhog]

Not really trying to make a case for using resale as a metric for purchase decision,

That is exactly what you are doing.

 

[Geotech]

Quote Originally Posted by Geotech View Post
Not really trying to make a case for using resale as a metric for purchase decision,
That is exactly what you are doing.

Perhaps in my last post - but if you read my original post, I was not. However, most of the replies came back as though that was the intent. It was not.

 

[prof fate]

"toy" implies you're doing this for FUN, not for profit. For relaxation, enjoyment, self-happiniess.

I know MANY people that are into motorcycles and cars - few do it for money/profit as it's now a JOB, not fun. Most I know that have to support thier hobby with a side hustle don't do it in the same field (fixing cars then restoring a hot rod, etc). Fun becomes work and it's not fun anymore.

I know many that hunt, golf, shoot, ride bicycles - the economic 'loss' on the item is chalked up to the fun you had using it. I fly R/C planes now and then..it's a complete loss all too often. Or the money spent golfing...a lot more than the clubs cost, especially if you travel to golf.

Boats and campers..yeah, figure low return on the item, but the TIME and FUN using them is where the value lies.

If the concern on losing money if you change hobbies (and most folks do..and lose...such is life) then maybe this isn't the hobby for you?

Considering the amount of money this toy will cost, it is not unreasonable to assess how liquid its value is in case life changes my plans. That said, it is first and foremost a toy, albeit a very useful toy. Heck that land it will sit on is also a toy. But that toy land has some value and so will the tractor. I only "need" an L2501 or equivalent to satisfy my pension for the toy. However, more toy is always more fun than less toy. That said, I could consider spending extra cash on an L4701, or equivalent, to enjoy the tractor even more. BUT, if I stand to lose $7,000 to $10,000 on a bigger tractor in case of a need (or want) to sell versus a $1,500 to $3,000 loss - that resale value is a reasonable consideration. Not the only one, but certainly one. I'm not quite 40 years old, so it is altogether possible that this tractor may not be around in 10 years. Now, if we were talking boats, travel trailers or other things that evaporate in value in a few years, then yes, who cares? But I don't buy those things, either. Not really trying to make a case for using resale as a metric for purchase decision, but I do think it's valid. Mostly just curious if others noticed the trend in bigger tractors having a bigger discount on used pricing (as a percentage - not just in absolute terms).

 

[Geotech]

Give me a break prof fate. Just because you want to do something for fun doesn't mean that you shouldn't make practical considerations about the value of money. I can make rational decisions and still have fun. Many people can. All other things equal, I'll enjoy the purchase that has higher value than the one that has less value.

 

[prof fate]

Give me a break prof fate. Just because you want to do something for fun doesn't mean that you shouldn't make practical considerations about the value of money. I can make rational decisions and still have fun. Many people can. All other things equal, I'll enjoy the purchase that has higher value than the one that has less value.

so invest in a mutual fund then.

ANYthing else will cost you money. Few people can make a profit dealing tractors...you're welcome to go for it. Buy what makes you money, not what you want/need/like.

While resale was a small consideration on my car, tractor, etc it's not the primary one by any means.

I shoot competitively and don't look at every gun purchase as 'can i get my money back out of it'. Guns generally hold their value well, but if you buy new you lose something (dealer's profit, it's now a used item). Buying used you stand a better chance of it retaining value - but trends come and go - right NOW SCUT/CUT's are hot commodities - and like anything you buy at the top of the market you'll pay more.

I remember back 15 years if you wanted a harley you ordered it and waited..used sold ina day for top dollar. Now? You can buy one for 50c on the dollar..if not less.

My boss bought a new denali pickup - $70,000. I bought a used F350 for $4k. He's gonna lose money on his and I can't lose as much as him even if I give it away. BUT - his 4 door 2017 diesel with leather, heated/cooled seats and every toy ever thought of is a lot nice day to day than my base model single cab.

If you can afford the 70k truck then odds are you're not concerned about retaining value. If you can't, like me, then you go for the best value you can find. for me - that IS a new tractor - and used implements. Pickued up a 5' back blade over the weekend for $150, used 2 times, garage kept. it's new for all intent. I've never seen one for under $225, most are $250 around here.

I bought a brush hog for $500, used it 6 months, sold it (got a bigger one) for $475 in a day. "lost money"...no, I used it for 6 months for $25.