Total Cost of Operating A Tratcor

[GregP27]

Hi,

Posted a cost thread in the General Operting forum at the top about total cost of operating a tractor. Found it online and gave the link.

I followed it in Excel and modeled a 4WD tractor that listed for $36k, was purchased for $28k, used 200 hours per year for 20 years, has a 5 gallons per hour fuel burn, and gives the operator $15 per hour, and has industry-standard repair, lubrication, etc. costs. It came out to a total cost over the life of the tractor of about $51.25 per hour cost.

Some of you might want to model your own and try it out yourselves.

No message, just food for thought. I found it interesting, myself, and thought you might, too.

 

[Rock knocker]

Sounds reasonable. That's why I always cringe when I hear what some folks are charging for things like brush hogging. I've heard prices as low as $35/hour. At that price you're paying your customers for your hobby.

 

[GregP27]

I agree. The link makes for a good read and it is easy to do it in excel.

I might never have thought of this myself, but when you find it online and explained quite well, it makes coming up with the numbers easy. I have it in excel if anyone wants to run some numbers by me. Read the link and post you numbers. If it isn't too many people, I'll run them.

Cheers!

 

[jeff9366]

has a 5 gallons per hour fuel burn,

My vintage 2013 Kubota L3560, 37 gross horsepower, consumes .4 gallon of diesel fuel per hour on average without the PTO powering an implement. With the PTO powering an implement L3560 consumes .5 to .6 gallon of diesel fuel per hour. Did you neglect inserting a decimal point?

Did you see this recent thread? http://www.tractorbynet.com/forums/...isons/377826-what-does-your-tractor-cost.html

Here is what I estimated in above thread: "I believe my $27,500 L3560 tractor operating cost is $30 per hour plus $5 an hour for implements. Undoubtedly higher than most due to dealer transporting tractor and performing all but most basic maintenance."

Deducting $15 per hour for the operator from your $51.25 per hour, and assuming we agree on fuel at around .5 gallon per hour, we are nearly in agreement. Did your calculations include implement(s) used with the tractor?

I understand there can be no ONE definitive number as use and residual value will vary.

 

[Wagtail]

I'll defer my answer and cede the floor to Dr. Steve "smstonypoint'.

It's all a matter of economics. :wizard:

 

[oosik]

Actually, I find there is another factor to consider when making the "cost" determinations. I have never worried about what it costs to have/operate my tractor. And I don't think my situation is unique. In my situation - I'm not be able to leave/exit my property, in the winter, without a tractor to clear my driveway.

I was able to verify this situation just this winter. On Dec 28, after clearing my driveway - I noticed that the fuel return line from the fuel pump had come loose at the pump. The tractor still ran fine but blew diesel everywhere. No problem - I called the dealer and they set an appointment to come out and repair during the first week of the new year. Wouldn't you know - before they were able to come out it snowed and totally blocked my driveway. Well, without a clear driveway the service tech could not reach me and because the tractor couldn't be used, I couldn't clear the driveway. I could have possibly made the repairs myself but I didn't have the necessary parts or tools to do the job.

This condition existed from around Jan 7, 2017 until the snow melted on around March 22, 2017 and I was able to "bust out" with my Jeep. My only real concern was what would I have done if I needed medical assistance. Fortunately, I did not. I have plenty of food and homeowners insurance would cover any loss due to a fire. My son became a little panicked and called around to see if there were any driveway clearing services. There, of course, are, but none that would come out this far and the cost would have been prohibitive.

The dealership finally made it out - fixed the darn return line - everything is fine now. Soooo....all things considered and factoring this into any equation - the cost of ownership becomes a fairly insignificant consideration.

 

[smstonypoint]

I'll defer my answer and cede the floor to Dr. Steve "smstonypoint'.

It's all a matter of economics. :wizard:

Surely you have those days when you wonder, "How can I estimate the costs of owning and operating a tractor"? Then you come to same old realization. "I need the advice of an economist. An economist would be able to answer my question."

See my posts in http://www.tractorbynet.com/forums/buying-pricing-comparisons/377826-what-does-your-tractor-cost.html#post4739283 and http://www.tractorbynet.com/forums/owning-operating/378111-total-cost-operating-tractor.html#post4744112.

Steve

 

[rustyshakelford]

My 100hp is in the 5 gph range. Hopefully you missed a decimal. I don't ever mess with these calculations, to many variable. I need the tractor for my stuff. Any mowing on the side is just cash in the safe. When it's time for maintenance, it gets done and I go on about my life. Some folks will read these threads and think it's costing them $50 just to mess around with their tractor for an hour

Brett

 

[GregP27]

Hi Jeff9366,

If I assume $29,500 list, $27,500 purchase, 0.6 gph, 10 years at 200 hours a year, $15 per hour for the operator, 7% for interest and 2% for inflation, I get $31.57 per hour for that tractor total cost to own and operate. I am assuming that cost covers the implement. If not, then there is another cost for the implement that is, of course, much less than the cost of the tractor, but it's not free.


Hi Rustyshackelford,

It might very well cost them $50 to do just that. The costs don't show up each and every hour. They show up when they come due. Tractors need oil changes, grerase, they break, need tires, etc.

I can fly an airplane for peanuts for 2 - 5 hours or more. But when the annual inspection comes due, peanuts ain't gonna' PAY for it when it has to be paid. If I don't hit the old aircraft account with the money for hours flown, then the money for the annnual expenses won't BE there when it is time to pay. If you can afford that, good on you and happy day. But if you can't plunk down $2,500 in cash for an annual inspection where nothing wrong is found, then your plane is grounded and you don't fly anymore. If they find a bad cylinder, just try finding one and getting it running in a certified aircraft for less than $7,000! Better plan on a bad part every now and again, because they happen to everyone, even me.

Same with a tractor. It doesn't cost that each and every hour, just as it doesn't with a boat, either. But the pay-out DOES roll around and you either have the money anyway, have planned for it via something like the cost to own plan, and so have the money in an account especially for it, or you will come up short. There are no other possibilities except to borrow the money, which is an added expense. People don't lend money free.

Cheers and nothing else intended. I passed on a link to a very plausible cost to own paper. That's all. I wasn't going anywhere else with it and have no message or other statement.

 

[jeff9366]

Hi Jeff9366,

If I assume $29,500 list, $27,500 purchase, 0.6 gph, 10 years at 200 hours a year, $15 per hour for the operator, 7% for interest and 2% for inflation, I get $31.57 per hour for that tractor total cost to own and operate. I am assuming that cost covers the implement. If not, then there is another cost for the implement that is, of course, much less than the cost of the tractor, but it's not free.

Few here would have one implement or attachment. I have about fifteen, with Ratchet Rake bucket attachment being the least expensive and heavy Monroe Tufline Tandem Disc Harrow being the most expensive. Even though only one implement is mounted at a time, they are all depreciating and require some maintenance. I estimate the cost of my implements and attachments at $25,000, which changes tractor operating cost significantly, assuming it is infrequently used without at least one implement or attachment.

 

[GregP27]

The link has depreciation and owning / operating costs for a lot of attachments.

I feel the pain as I have owned many racing items that were more expensive in the end than I expected, mostly competition motorcycles. I had a very good friend in Phoenix, AZ who raced SCCA with Mazda rotary engines (12A / 13B). We tracked his expenses each and every time for 5 years. Every single time one went on the trailer to go ANYWHERE, it was $650! And we often took them out just to WASH them (one at a time)!

If you figured race days, they weren't cheap, averaging $3,500 or so with all costs figured in, including tires, brakes, oil. gas, spares, towing there and back, food, supplies, entry fees, etc. That didn't include tools, the trailer, or the tow vehicle itself (just operating cost)! ... or ME. Jusy HIS costs.

Seems like all Vehicles cost more than you think, always, even cheap ones. Get a cheap car that needs tires, brakes, and shocks and figure it out.

Tractors seem much the same, from a cursory look. I really like the fact that they're stressed MUCH less, at least mechanically, than any racing vehicle. I would NOT want to run a tractor pull unit ... unless someone else was paying for it! Then it would be good fun.

 

[newbury]

Hi,

Posted a cost thread in the General Operting forum at the top about total cost of operating a tractor. Found it online and gave the link.
<snip>

Why couldn't you give it here?

<snip> I passed on a link to a very plausible cost to own paper. That's all. I wasn't going anywhere else with it and have no message or other statement.

The link has depreciation and owning / operating costs for a lot of attachments.
<snip>

Here's the blasted link

As oosick wrote many of us here don't give a flip for the "cost per hour" of ownership. It's nice to know, like it's nice to know how a nuclear reactor works, but it's not going to change our lives much.

I figure my costs per hour in what I've spent divided by the hours I used it. A while after I bought my USED M4700 and a set of pallet forks I'd used it for about 20 hours and it had cost me about $13,000. So at that time my cost was about $1,300 per hour.
I've run my two tractors maybe about 1,000 hours over the last 8 years, for about a total cost of $50K (not including my truck, sawmill or my labor). So I'm down to about $50/hour.

 

[countrybumpkin]

I'm trying to figure out why start another thread on the same topic in here?

 

[Bigfish50]

I'm essentially a newbe in that I've got <12 hours seat time on my new tractor so about as new as you can get. Seems to me that a person could use the methodology expressed in this thread to start trying to understand their baseline costs. For example if I were asked to quote out brush cutting a field then I would definitely want to understand those average costs of operation on the tractor to ensure I quote high enough to cover those costs. While I'll probably not do work for others with my tractor as I have a full plate every time I go to the farm I can see a benefit of having an understanding of those running costs. I'm sure if I didn't know them I'd definitely shoot myself in the foot by underestimating the price of a job.

 

[GregP27]

Hi newbury,

In other forums (actually several) we are asked to give a post only once and then refer to it elsewhere. I COULD give it here and in every other brand-specific "Owning and Operating" forum, too, but that would be 20+ duplicate posts. That is sort of frowned upon everywehere else on the web.

I suppose you can't please everyone all the time ... glad you managed to find it.

Cheers.


Hi Countrybumpkin,

Not everybody READS the general Owning and Operating forum. I spend more time in here than elsewhere because I have sort of zeroed in on a Kioti from reading in here. We don't all think alike, do we?


Hi BigFish,

Which is EXACTLY why I posted it when I found it. Glad somebody actually read it. When I put in some numbers thrown out in here, it comes in around $35 per hour for a couple of scenarios offered. Don't know if that included implements or not; I suspect not. That's NOT getting any profit, that's COST to own and operate.

It isn't something I would encounter every day at all, but it gives me an idea of the ballpark charge I migh quote should I elect to hire myself and my equipment out. Also, that money does not include the cost of any damage. People do NOT tell you what is in the field they ask you to brushog most of the time, for instance. You find out when you hit it. Also, they may tell you it is OK to dig HERE but, if you hit a sewer or a utility, guess who they come after? It isn't gonna' be your neighbor!

So, for myslef, I'd want to estimate it, track it, and know it. That way, when things happen, I have planned for the expense and am not caught short of staying in operation.

I have friends in the flying world who bought a plane, and flew it for little to no money for quite awhile. They didn't hit the account with the costs they KNEW were coming for each and every hour flown. When those costs came due, they stopped flying. And since the plane wasn't airworthy anymore, the sale price was WAY down, too, almosy scrap value. They basically lost everywhere and never flew again.

I just didn't want to have that happen to me in the tractor world and started looking for a good cost-to-own explanation for tractors. That's all. Again, no other message intended.

Glad at least one guy gets it, and it looks like maybe all forums do not have the same duplicate posting etiquette. Go figure.

Cheers.

 

[oldpilgrim]

I didn't read the link but based on ur original post in this thread, you didn't factor in 'residual' or resale value of the tractor. That brings down the cost of ownership considerably.

 

[Bigfish50]

oldpilgrim and GregP27

Now my head is hurting from trying to do all this figuring

 

[dalroo]

Different, but kind of related - my father bought a really nice Champion bass boat with a big ol' 250 hp Mariner engine several years ago. He did the math and found that each fish he caught worked out to about a thousand dollars. Hehe!

 

[rustyshakelford]

Different, but kind of related - my father bought a really nice Champion bass boat with a big ol' 250 hp Mariner engine several years ago. He did the math and found that each fish he caught worked out to about a thousand dollars. Hehe!

Clearly needs to fish more. It will correct the numbers!

Brett

 

[GregP27]

Hey BigFish,

PM me your email and I'll send the Excel spreadsheet. You just have to input some things and it pops out of the bottom. Easy!

Again, I make no claim, but it LOOKS good. Residual value is there. NOTHING is missing. With the spreadsheet AND the link, you can choose your own numbers. I suspect a CUT will be in the $35 per hour range most of the time, give or take a few bucks, but it also depends on use, years, interest rates, etc. It may be a SWAG, but it's in the ballpark. The $35 per hour is COST, no profit. And it comes from sonething like a slightly sub-$30k tractor with reasonable use.

The $54 per hour rate was for a high 30's/low $40's tractor with a big fuel burn and low use.

I only did the tractor part, but the implement part isn't very hard to add. I'd estimate the tractor and implement cost to be in the low $40 per hour cost, over time, with everything thrown in.

Hey, cheaper than flying! By over 50%!

I always thought BOAT stood for "Break Out Another Thousand!" or a hole in the water into which you pour money until you've had enough fun.