Resale Value - Theoretical question

[BXRICK]

TBN contains posts from people looking to buy a tractor, and asking about what people think they should buy. These question elicit responses that frequently include priorities, $, "what are you going to do with the tractor", look at lots of different models, etc. Which is all great advice. It's a personal decision, and depends heavily on the individual situation.

I find it interesting that a lot of people discuss resale value as a potential issue, both with regards to to purchassing, and later with regards to making modifications.

Yet, many people also talk about how "this is the last tractor I'll ever buy." and "I hope to keep this tractor many years".

So, to throw it out there, Are there two groups of people, one who plans to resell enough to worry about the resale value, and another group who plans to run the tractor into the ground and wants something that will last forever? Are these in fact mutally exclusive ideas, and no one person thinks about both? Is it a cover-all-the-bases situation?

Do people who worried about resale value 5 or 10 years ago when purchasing finding that their concern has paid off?

 

[Indydirtfarmer]

I own a farm that has been in the family for 189 years. I have no plans on ever letting it out of the family. YET... I am always interested in it's market value. (That could easily be worded "Re-sale value")

When I buy a tractor for my own use, there is absolutely no intention of it leaving the fleet either. Still, I am just as interested in it's value. Should a brand or a model be falling off in worth, I'd like to know (as much) why, as how much.

I don't think MOST people are interested in "resale value" as much as they are the "market value".

A matter of semantics................

 

[Bird]

I, too, am interested in resale value of anything I buy. I might plan to keep it a long time, but never know when I might change my mind and want a different model.

 

[Bob_Skurka]

My life is totally different that Indydirtfarmer, yet my position on tractors seems to be much the same.

I don't buy it to get rid of it, but there may come a time when I do sell (actually I have done that). I look at some implements the same way. Take an old Befco finish mower I recently traded in. A new First Choice finish mower can be had for about $1000, other brands can be bought for a couple hundred less. My decade old Befco got me (if I recall from last year) $600 from the dealer, he turned around and sold it for something over $800. Now I don't recall what it cost me new, but I think I made out pretty well. Can a cheap mower deck, at 10 years old, be sold for that kind of money? Very likely no. Similar concept with a tractor. A good machine (not limiting it to any brand here) with a reputation for quality, will hold its value. Not uncommon to hear about 5 year old tractors in nice condition selling for more than they cost new.

 

[SteveH_CT]

I agree with all the previous posts;

Case in point - Mine. I bought a Deere 4310 last February 04. I bought it with the intention of getting a larger one when we moved to our bigger piece of land. Our house was on 8 acres, and we own 25 acres out of a 100 acre family parcel.

My oh my, how plans change. In the interceding year we've put our old house on the market, and moved to one (2 months ago) with only 4 acres. I broached the question with my wife about downsizing the 4310, because we had no intentions of moving to the bigger lot for at least 10 years. If she agreed I would have traded it in on something smaller. She didn't - and I still have it... glad I listened too. I used it for a lot of plowing after we moved in.

So my point is, in one year I went from planning on trading up in size, to planning on going down in size... And after all that I'm still keeping it. /forums/images/graemlins/laugh.gifEither way though, resale value was a higher priority for me than it may be for some folks.

 

[rozett]

I guess I am a little different than you guys. I almost never buy a vehicle brand new. I have, but not any more. And I drive them till they die. As example, I bought an 87 Crown Vic, one year old /w 11K miles. I finally sold it to a daughter's boyfriend with 254K miles. My CUT was the same. I bought a one year old Cub with 90 hours on it. If I ever need a bigger tractor, I would not trade in the Cub, just add to the stable. Resale value is not even on my radar.

 

[dmp437]

</font><font color="blue" class="small">( Do people who worried about resale value 5 or 10 years ago when purchasing finding that their concern has paid off? )</font>
Absolutely. Who wants to give away their usually hard earned money?
Case in point, minivans. /forums/images/graemlins/frown.gif
GM and Honda sell minivans, both for about $30,000.
After three years the Honda retains 70%, the GM retains 50%.
After five years Honda retains 50%, GM retains 25%.
So after 5 years the GM buyer has "given away" an extra 25% or $7500 that the Honda owner didn't have to. And that's in MY area, the "birthplace of General Motors" (Flint, MI), which is still pro-GM regardless of the poor quality of their products.
I apply this concept to everything I buy. I'm very interested in retained value. I may never sell it but if I want to do as well as possible and it helps if the item is desirable. Desirable items almost always retain more of their value. At some point you may want to move up or move out and it's prudent to plan for the unexpected when possible.

 

[2nstonge]

I might sell someday, then again, I might not. However, I have an ongoing curiousity about my tractors value because my insurance company cares about it. If it ever comes down to an accident, fire or theft I need to be prepared to butt heads with the insurance gods about the equipments cash value in the real world.

-Norm

 

[Indydirtfarmer]

By virtue of the fact that we have a tractor/equipment/property that's worth owning, most of us ar "fiscally responsible" enough to concern ourselves with the worth of our worldly possessions. In other words, I know what I have..... While it may be for future re-sale, it just as well might be to assess the long term effects of a purchase. (Did I do OK???) /forums/images/graemlins/smirk.gif /forums/images/graemlins/cool.gif

And it could well be for the purpose of evaluating options for SOMEONE ELSE, in a future TBN post.... /forums/images/graemlins/grin.gif /forums/images/graemlins/crazy.gif

 

[Henro]

I guess I'm more like Rozett than most.

Frankly, I don't think I EVER bought anything in my life where resale value played much part in the decision to buy.

Most of the time we use things till there is little use in them anymore and end up giving them to friends or family. We generally don't sell stuff that still has some life in it. Just the way we are.

We bought our first new car about six years ago. One of our daughters drives that one now. The second new one is driven by the younger girl...I guess with no more children we'll be driving what we have now for another ten years... /forums/images/graemlins/shocked.gif

The house we built ourselves and hope to pass on to one of the kids. I wish I DID NOT have to be concerned with it's value, but this county has gone crazy with property tax assesments and in a year one's property value (and tax) can jump big time. Township down the road went up 35% this year! (We came here in our 30s to sink roots, deciding to quit and find a new job if necessary, rather than move).

Anyway, for me the only way resale ever played into my decision, if it did at all when buying my tractors, is for it to be an indication of possible "relative reliability" of the tractor brand. Demand for something that breaks down a lot is likely go be be less than for something that is reliable, therefore higher resale value equates to higher overall reliability (at least in this twisted mind... /forums/images/graemlins/blush.gif /forums/images/graemlins/grin.gif ).

As for the wife, never had to consider it. As I tell her often, she did the picking. She made the decision, now she can live with me... /forums/images/graemlins/grin.gif What I don't admit though is that obviously she does not consider resale value much either... /forums/images/graemlins/shocked.gif