Resale value as a function of purchase price

[4570Man]

I’ve noticed the same thing with trucks. 1-1.5 pickups bring a pretty penny. The heavy CDL required trucks bring a lot less. I haven’t had time, but I plan on getting a cdl so I can buy a cheaper and better truck. As for the construction equipment not holding its valve. It doesn’t have much use on a construction site once it’s worn out. The non construction guys aren’t paying very much. I paid a tad less than 30k for my backhoe. It’s still good enough to run the construction fleet though. Based on what I see any decent backhoe is worth 20k so I probably have 2000 hours and 15 years before I take much of a hit in deprecation. And weighing over 8 tons it limits the buyers a lot more than a little tractor. If I follow through with the CDL plan I plan on buying an excavator in the 20 ton range because they don’t cost much more than a mini excavator. In my experience used industrial equipment takes a huge depreciation hit because the people that are buying the stuff have money and don’t buy used stuff. A few years ago 3 phase equipment was dirt cheap. Hobbyists are starting to catch on to VFDs and that’s brought the value up quite a bit.

 

[4570Man]

Geotech, I think you were right in concept, the dividing line is just one step larger than you put it initially. In the Kubota product line, the "trade tool" models tend to start with the M series rather than L4xxx or MX - and most of the trade tool size are going to be 70 hp and above.

A case in point: Our Kubota M59 TLB (Tractor/Loader/Backhoe) is large - but still argueably within the top end of the homeowner size. It has 60 hp, weighs 8000 lbs, & I doubt that it's resale will ever drop much below 2/3 of it's new price....if that. We just love that machine, it's a winner.

Contrast that with our John Deere 310 TLB. This is a true "trade tool" TLB built the same year as our Kubota M59. Everyone knows the JD 310 - it's the standard yellow backhoe/loader that you see on construction sites everywhere in the world. As a "trade tool" our JD310 has a cab and every bell and whistle including 4wd & extendahoe, 50% more HP than the Kubota, and weighs twice as much. And yes, its resale value is pathetic. When I bought it used a few years ago it had already dropped below 1/3 of new price - and is worth even less than that today. BTW, it runs fine; needs nothing. Very comfortable and trouble free. Fires right up at -20, the heater, AC, and air suspension seat in the cab are awesome, controls are all push-button, and the loader is rated in tons rather than lbs.

You can buy a JD310 just about like ours for roughly the cost of a new Kubota B series. And ten years from now that B series Kubota will probably be worth more.
rScotty

That’s a slightly biased comparison. An old backhoe has worked all it’s life and is worn out and is littered with problems. Commercial guys can’t afford to deal with it. The B series Kubota quite likely hasn’t worked a hard life and has plenty of life left. Nobody pays top dollar for a 400000 mile pickup either. I thought about buying a M59 and it was honestly probably a better fit for what I need, but I couldn’t get past the cost. For the price of a pretty nice M59 I could have a pretty nice full size which is obviously a way more capable machine. And the full size is more fun to play with IMO.

 

[rScotty]

That痴 a slightly biased comparison. An old backhoe has worked all it痴 life and is worn out and is littered with problems. Commercial guys can稚 afford to deal with it. The B series Kubota quite likely hasn稚 worked a hard life and has plenty of life left. Nobody pays top dollar for a 400000 mile pickup either. I thought about buying a M59 and it was honestly probably a better fit for what I need, but I couldn稚 get past the cost. For the price of a pretty nice M59 I could have a pretty nice full size which is obviously a way more capable machine. And the full size is more fun to play with IMO.

I'm not sure what you are saying is biased? We've talked about a lot of used equipment, but so far I don't recall anyone mentioning an old worn out backhoe littered with problems.
I wouldn't think there would be much reason to buy a machine littered with problems since there are a ton of inexpensive old backhoes on the market whose main problem is misconception based on age .... that being it is difficult to believe how well they work given how old they are.

What makes the full size machines so attractive is how much machine you get for the dollar. That was what the OP wanted to kick around. My take is that old full size TLBs are reliable but not versatile. The full size TLBs can't mount a a 3pt hitch, they don't have a PTO, and the backhoe isn't removeable. The M59 does all of those things. I suspect that the M59 will hold it's value much better.
rScotty

 

[Turbys_1700]

Thread drift here but I'll join in. I sold my neighbor my dad's old 3616 International backhoe for $2K. It's not worth much on the market. But for someone like my neighbor who is a good mechanic it was a great fit. He rebuilt a leaking cylinder and bought a new back tire. That's all so far. He's dug up several large dead oaks and loves it. I go over there when I hear the old gal crank up. Nothing like the sound of an old 236 international diesel bellowing.

 

[shooterdon]

I just sold my Kubota B2320, got within $100 of what I paid for it after 2 years and 100 hours. Looked new and was well taken care of. AND ... it was a Kubota.

Not sure if that means much. You got lucky? The buyer was an idiot? I would never buy a used machine unless there was a significant price difference over a new one. But that is me and why it took me so long to acquire a tractor.

BTW, as another poster stated, a lot depends on how talented someone is. I can do minor stuff but that is it. I need (want?) dealer support and a warranty. So buying used is not for everyone.

I paid $3500 for my machine (came with turf tires, MMM, FEL, brush hog, tiller, rake, boom), then bought a blade, spare set of wheels and AG tires for $200, and have spent $2500 so far on repairs (dealer did all the work so a lot of that was labor costs). I have a 30 year old tractor (1100 hrs) with attachments for less than $6.5k. Probably not a good choice if I was planning to put 250 hrs a year on it. But I will likely use it 50-75 hours a year. If it lasts another 10 years, and is worth $2.5k, my cost will be $400 per year plus oil/filter changes and any other repairs. The "other repairs" are the unknown and what may bite me....that is the risk of buying used or owning anything out of warranty. And as has been mentioned by others, with older machines, parts may be difficult or impossible to get.

Having the tractor now, I regret waiting as long as I did. I should have bit the bullet and bought a new one 6 years ago. At my age (now late 60's) it would have lasted my lifetime and still have retained a reasonable value after 20 years. My cost per year would have been about $1000-1200 for a better machine. And I would have less risk of "other repairs" as I take care of my stuff and do not abuse it.

 

[4570Man]

Not sure if that means much. You got lucky? The buyer was an idiot? I would never buy a used machine unless there was a significant price difference over a new one. But that is me and why it took me so long to acquire a tractor.

BTW, as another poster stated, a lot depends on how talented someone is. I can do minor stuff but that is it. I need (want?) dealer support and a warranty. So buying used is not for everyone.

I paid $3500 for my machine (came with turf tires, MMM, FEL, brush hog, tiller, rake, boom), then bought a blade, spare set of wheels and AG tires for $200, and have spent $2500 so far on repairs (dealer did all the work so a lot of that was labor costs). I have a 30 year old tractor (1100 hrs) with attachments for less than $6.5k. Probably not a good choice if I was planning to put 250 hrs a year on it. But I will likely use it 50-75 hours a year. If it lasts another 10 years, and is worth $2.5k, my cost will be $400 per year plus oil/filter changes and any other repairs. The "other repairs" are the unknown and what may bite me....that is the risk of buying used or owning anything out of warranty. And as has been mentioned by others, with older machines, parts may be difficult or impossible to get.

Having the tractor now, I regret waiting as long as I did. I should have bit the bullet and bought a new one 6 years ago. At my age (now late 60's) it would have lasted my lifetime and still have retained a reasonable value after 20 years. My cost per year would have been about $1000-1200 for a better machine. And I would have less risk of "other repairs" as I take care of my stuff and do not abuse it.

You might be missing some details The new model had very likely increased in price over that period of time. Especially if emissions control was implemented over that time.

 

[4570Man]

I'm not sure what you are saying is biased? We've talked about a lot of used equipment, but so far I don't recall anyone mentioning an old worn out backhoe littered with problems.
I wouldn't think there would be much reason to buy a machine littered with problems since there are a ton of inexpensive old backhoes on the market whose main problem is misconception based on age .... that being it is difficult to believe how well they work given how old they are.

What makes the full size machines so attractive is how much machine you get for the dollar. That was what the OP wanted to kick around. My take is that old full size TLBs are reliable but not versatile. The full size TLBs can't mount a a 3pt hitch, they don't have a PTO, and the backhoe isn't removeable. The M59 does all of those things. I suspect that the M59 will hold it's value much better.
rScotty

I thought 30 year old backhoe and worn out junk that’s littered with problems was a interchangeable term. And there’s talk of stuff older than that here. There might be a few garage kept lightly used backhoes on the market, but the vast majority stayed outside and worked hard. I don’t think your M59 would be worth much more if it had 7000 hours and stayed outside for 30 years and had little other TLC over that period. I don’t know any details about your M59, but I suspect it’s had an easier life than that. People don’t buy a new full size backhoe and work it 50 hours a year and keep it in a garage. People do do that with a little tractor.

 

[ultrarunner]

Not sure if that means much. You got lucky? The buyer was an idiot? I would never buy a used machine unless there was a significant price difference over a new one. But that is me and why it took me so long to acquire a tractor.

BTW, as another poster stated, a lot depends on how talented someone is. I can do minor stuff but that is it. I need (want?) dealer support and a warranty. So buying used is not for everyone.

I paid $3500 for my machine (came with turf tires, MMM, FEL, brush hog, tiller, rake, boom), then bought a blade, spare set of wheels and AG tires for $200, and have spent $2500 so far on repairs (dealer did all the work so a lot of that was labor costs). I have a 30 year old tractor (1100 hrs) with attachments for less than $6.5k. Probably not a good choice if I was planning to put 250 hrs a year on it. But I will likely use it 50-75 hours a year. If it lasts another 10 years, and is worth $2.5k, my cost will be $400 per year plus oil/filter changes and any other repairs. The "other repairs" are the unknown and what may bite me....that is the risk of buying used or owning anything out of warranty. And as has been mentioned by others, with older machines, parts may be difficult or impossible to get.

Having the tractor now, I regret waiting as long as I did. I should have bit the bullet and bought a new one 6 years ago. At my age (now late 60's) it would have lasted my lifetime and still have retained a reasonable value after 20 years. My cost per year would have been about $1000-1200 for a better machine. And I would have less risk of "other repairs" as I take care of my stuff and do not abuse it.

Lots of variables come into play...

One of my old car guys moved to Oregon and bought a Kubota for the property there... found it was a little on the small side... he still had his Santa Clara property and was getting ready to sell it...

Brought his 60 hour Kubota down to do site work which was no trouble as he needed the trailer to transport things to the new place in Oregon..

Oregon has a lot of Kubota Dealers compared to Santa Clara...

Anyway... one of his neighbors took a liking to the machine and had work to do around his property...

The short version is the tractor stayed in California and was sold for the price paid new in Oregon... plus my friend got to use the tractor for 100 hours for the cost of fuel.

We have 10% sales tax and the only Kubota Dealer keeps prices high... the combination meant buying local would be 6k more to buy one brand new verses one 9 months old with 100 hours...

Great resale in my book.

 

[kenmac]

The short version is the tractor stayed in California and was sold for the price paid new in Oregon... plus my friend got to use the tractor for 100 hours for the cost of fuel.
Great resale in my book.

Yes it is ! Probably doesn't happen allot, but I'm sure there a few other stories like this out there

 

[rScotty]

I thought 30 year old backhoe and worn out junk that痴 littered with problems was a interchangeable term. And there痴 talk of stuff older than that here.

OK, I can see where you are coming from. It's a common misconception, but truth is that those aren't interchangeable terms. That's why we've been discussing pros and cons of older commercial machines as an option in this thread.

You aren't alone, though. The mistaken idea in the tractor world that "used" means "junk, repairs, & problems" became popular about 20 years ago.....perhaps as a result of some clever advertising right about the time that millenneals were reaching young adulthood. It was also right about then that the digital world began to replace the old style more mechanical world and that figured in as well.
The result is that equating older with less reliable in the tractor world has become a common misconception with today's buyers, and that mistake has persisted long enough so that today it has become "common knowledge" in spite of whether or not it is supported by fact.

One fact seems clear, and it is that tractors all seem to last far longer than anyone had expected, whether in homeowner service or ag/commercial. Hard work just doesn't hurt them, although of course outright abuse does.

That's what we were discussing. Given a tarp for cover, routine maintenance, and not too much abuse, tractors just don't age as much as manufacturers would like you to believe. And that's even more so for the larger commerical duty and farm tractors. Around here I know at least a dozen machines in every type of use in spite of being 30+ and all having 5K to well over 10K hours. Frankly they don't seem to have any more problems or need any more repair than brand new ones.

There just isn't much market for the larger used equipment, so your dollar goes a long ways in that market compared to compacts. That doesn't mean "tools of the trade" are the answer for everybody, but that might be more about how they are equipped to work rather than their reliability.
rScotty