Resale value as a function of purchase price

[Geotech]

I am planning to buy a new tractor in a couple months. Been vacillating between Kubota and Kioti, but it's a tough decision. Kioti resale value is harder to evaluate since there are not as many used Kiotis on the market.

With Kubota, however, it looks like the cheaper the new tractor price, the higher the resale value as a percentage of new purchase price. For example, a low hour (less than 500 hours) L25/33/3901 is usually within about 10 percent of new. However, when you jump up to the L4701 and MX series tractors, the asking price for these used machines has a broader range of deviation from the cost of new. Seems like you get bigger bang for your buck shopping used as the tractor gets bigger/more expensive. Anybody else notice this?

 

[mddorange]

The reason for that is "DEMAND!" The smaller tractors are in much greater demand, partly because of price.

 

[tcreeley]

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.

 

[Diggin It]

'Too high' resale prices are why I ended up going new. If I'm going to pay that price, I want a warranty. I found quite a few K's and JD's that were a few years old for not much less than what I paid new. One thing that bothered me is WHY they were for sale. Were there problems? Owners unhappy with them?

I bought with the intent of keeping it for as long as it runs. Possibly selling it in a few years never entered my mind.

 

[CADplans]

Seems like you get bigger bang for your buck shopping used as the tractor gets bigger/more expensive. Anybody else notice this?

You must be real careful comparing new and used "prices"
many times,,, "new" is an asking price, with discounts available,, then there is 0% (or almost 0%) financing,,,
then
you are comparing that to used tractor "asking" price,,

Used tractor prices always seem high,, there is usually negotiating room built in.

A lot of times, I view "sold" listings on eBay to get used prices that are realistic,,,

 

[oosik]

I must be the weird one - all my time, effort, research, travel, talking in regards to the purchase of a new tractor was directly related to work it would be doing on my property. Never gave a moments thought to resale value.

However - if the resale value of a new tractor is a big item for you - - be sure you have a nice place to store it while you own it - sure as #$%^ don't want it getting scratched. A scratch would surely reduce the resale value.

To each his own.

 

[jeff9366]

All my time, effort, research, travel and talking in regards to the purchase of a new tractor was directly related to work it would be doing on my property. Never gave a moments thought to resale value.

My experience also.

 

[prof fate]

new - visit a dealer or 2. you get exactly what you want. I got 0% financing no money down - so more cash for implements. It's like you don't even have to pay for the tractor..LOL. And delivery included/available.

Used..may have to drive around a LOT to look at tractors. Why are they selling? (if it's really low hours prolly no issues, but I talked to a guy today that had a new mahindra, spent 8 of the first 15 months in the shop..he sold it. low hours..warranty..but a lemon. He lost $2k on it)

Resale value...if you're unsure of your need, then yeah maybe it matters. My kioti has 130 hours on it. I won't get back the insurance money I paid at purchase, or the maintenance money, or fuel used. So if I sold it today i'd be out 1500 dollars. BUT - I have 130 hours on it...can't rent something for $10/hour. So my use of it has value.

It can get very hard to justify somethings monetarily. We paid for brush hogging and snow removal and bought a tractor..dollar for dollar and our time, it's better to pay someone. BUT - we can do sooo much now because we have the tractor..stuff we'd have spent money on (if we had it) or would do with a wheel barrow and shovel, garden tractor and trailer, etc. Very hard to put a price on that.

 

[shooterdon]

'Too high' resale prices are why I ended up going new. If I'm going to pay that price, I want a warranty. I found quite a few K's and JD's that were a few years old for not much less than what I paid new. One thing that bothered me is WHY they were for sale. Were there problems? Owners unhappy with them?

I bought with the intent of keeping it for as long as it runs. Possibly selling it in a few years never entered my mind.

When I moved to the country 6 years ago, I found the same situation. Small used tractors were selling for little less than a new one. I basically gave up. Got my current machine from the estate of a friend who passed away. I have about $6k into it including a bunch of attachments.

But I will likely buy new if I ever decide to upgrade. Unless you find a deal on a private sale, used tractors are not saving you much money. The good news is get most of your money back if you need to sell it

 

[MHarryE]

Partly today's economy. Ag is down, way down. With the tariffs, farm income has tanked - example soybeans are 20% to 30% below last year. At farm auctions I have attended I have found tractors such as a 2016 JD 6175R with 350 hours for 50% of the price I was quoted by my dealer 2 years ago. This is just one example - I have countless others from auctions. However small tractors in the SCUT and CUT range sell very well. My dealer says they keep him in business as ag is not a winning proposition except for service parts sales.

 

[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.