Resale Value

LKGuy · Dec 6, 2004

In more than one posting I have seen where it has been stated that one make of tractor will have a higher resale price than another. Now, I understand that if you pay more for make "A" tractor than make "B" or "C" tractor, you should expect a higher resale price/value. But I'm just curious, with factors such as condition and hours being generally equal, has anyone had any "real world" experience in which they have purchased and sold one or more tractors and been able to compared, on a percentage basis, how much higher or lower the resale price/value was between similar makes/models of tractors? I'm not trying to start a brand war here, just trying to see if the resale issue can be quantified.

Bob_Skurka · Dec 6, 2004

I've sold several used tractors and from what I can tell the largest factors are probably brand name, reputation and visual condition of the tractor.

Brand name & reputation are often based on regional preferences and what is good in N.W. Indiana may be bad S.E. Indiana, California or Nebraska and visa versa. So in some areas of the country you will find a lack of brand recognition as a major factor and in other areas you will find that that may not be much of an issue at all. In any case the physical and visual condition come into play heavily.

I'm afraid that trying to quantify a % loss is going to be like trying to catch the sent of a single rose in a wind storm.

kybota · Dec 6, 2004

I have also seen a lot of comments about this, but found it difficult to get reliable comparative pricing on used models, and obviously condition varies which muddies the story even more. But I wonder if tractor prices can be as dramatically affected as cars can. Example: we are currently shopping for a used mini-van, and have been looking at 1999 or 2000 models. The Honda and Toyota mini-vans have consistently been priced in the $12,000-$15,000 range, while the Dodge Caravans are in $4,500-$7,000 range. When new these vehicles are priced less than $2,000 a part.

We are almost certainly going to buy a Dodge, because there is no way the quality difference between them is that great. If we were looking to buy new, we would definitely buy the Honda or Toyota because the quality difference would be worth the small difference in price (Those Chrysler transmissions, don't you know, tsk, tsk).

Ultimately, my tractor purchase came down to choosing between the Kioti CK25 or 30, the Kubota L3130 and the JD4310 (the NH were priced too high locally). While I only plan to resell mine if I decide I need a different size tractor, I have to say I wonder if the Kioti would have suffered in the used market like the Dodge does relative to the Toyota. This thought did have some small influence on my purchase.

Dargo · Dec 6, 2004

Since eBay has become so huge across the country, I often use it as a guide for what price used tractors are selling. I just looked to see how Mahindra and Kioti were selling, since those two names seem to always come up in a "resale value" discussion. Unfortunately eBay is not a help here. No Mahindra tractor has actually sold on eBay in the listing of current or recently completed auctions. In the recently completed auctions, one Kioti sold for $5001. It was a 2000 model that the seller claimed sold for over $13,000 new in 2000 and would cost over $15,000 today. It was a model LK3052. I have no idea if the seller was being truthful or not on the original selling price. If so, that sounds like a steep hit.

When I look on eBay, I'm not interested in what price people are asking for their tractors, I'm only interested in the prices that tractors actually sold for. You can ask any price. What you actually get may be considerably different. It's not a perfect way to check current resale values, but I don't know of other ways available to the general public to show what the tractors actually sold for. Anybody know any other way for the general public to see what prices tractors actually sold for? I think the actual sold prices mean more than what any book estimates the value to be.

Youare · Dec 6, 2004

In my neck of the woods there seems to be a relationship between the resale price and the price the tractor sold for new. The major brands cost more new than most of the other not yet major brands and so the resale prices seem to reflect that difference.

I was concerned about resale value and reliability when I purchased my Kubota in case my wife wanted to sell it after I don't need one any more. I think condition and hours are the most significant factors in resale value, brand recognition does factor in there to a point.

A friend purchased a good size Belarus for what I would call a inexpensive price but when he traded it in for a new Kubota the trade-in price reflected what he paid for it.

Randy

BigAl · Dec 6, 2004

I've owned many tractors. When I started I bought " worn out junk" and when I sold it ,after many new parts installed ,I still took a bath .Seemed like for every hour I used it , I spent a hour repairing something else that had broke ! I was finally able to purchase a newer tractor with 50 hours in perfect condition . It served me well and I took good care of it . When I sold that tractor it went for more money than I paid ,4 years earlier and I had put 400 hours on it to boot !
It was a no brainer after that . I went down and bought the tractor I wanted new. I know I will get most ,if not all my money back when I sell it .
A tractor that has fairly low hours ,in good cosmetic condition as well as working condition is a quick seller in my area and it does'nt matter what color it is .
Big Al

bczoom · Dec 6, 2004

( The major brands cost more new than most of the other not yet major brands and so the resale prices seem to reflect that difference.)

I don't know how much this is true for all makes and/or models but I've seen many tractors whose depreciation is pretty much equal to inflation.

I occasionally see tractors the same as mine on e-bay or elsewhere and their current price is about the same as what I paid for it when purchased (about 8 years ago).
Some tractors may be worth more than their price new (e.g. older Farmall Cub, Ford 8N, and Ferguson TO20...).

If the correct variables were applied to an algorithm, it might be able to provide an answer but it would need to be verified against true sales.

A simplistic algorithm to start.
Price new = $16000
"Useable" hours = 4000

16000/4000 = $4/hour

If tractor has 500 hours, it's depreciated $2000 = a value of $14000. Adjust for condition of tractor and/or apply other variables into the equation.

755inNY · Dec 6, 2004

ky_bota,

Whether its mini vans or tractors one must be carefull in comparing used prices relative to new prices. I think your statement " When new these vehicles are priced less than $2,000 a part. " may be a little misleading. The $2K figure may be accurate based on MSRP but that is far different from purchase price. The Dodge could be purchased easily for 2 or 3 thousand off of MSRP. You would be lucky to get any discount off either Toyota or Honda depending on the market. Kick in another grand or two for factory incentives from Chrysler in the form of rebates and the difference is more like 5 or 6 thousand dollars.

btolle · Dec 6, 2004

( Some tractors may be worth more than their price new (e.g. older Farmall Cub, Ford 8N, and Ferguson TO20...).
)

An 8N sold for $1,295 (?) when new and a really clean used one will bring about $2,500 today.

Now all I have to do is convince my wife that the new Kubota B7510 I paid almost $12K for will be worth $25K someday!

Bill Tolle

bczoom · Dec 6, 2004

( Now all I have to do is convince my wife that the new Kubota B7510 I paid almost $12K for will be worth $25K someday!)

Bill,

That's the conversation I have with Mrs. Zoom BEFORE I make the purchase.

Brian