It's also interesting to sit down & fugure out long term value by calculating deflation of the dollar's purchasing power (inflation %) against the increasing new tractor prices. Then expand that calculation to cover the replacement cost of the tractor over how long that a tractor lasts.
Because if you do that, I think you are going to be surprised at just what a what a good value a used tractor can be. And that even goes for one several years old at near the original price. That's when the high price of used tractors begins to make more sense.
Pretty much the same applies to any tool with a long useful life.
rScotty
No doubt that is something to think about and can get interesting. One thing to keep in mind though is when you are talking depreciation and inflation, is sometimes you are talking 10-20 years or even longer to figure that one.
Where I somewhat disagree is where a new-used machine really makes a lot of sense, if were talking that 10% price difference that I said above. Older machines, yes you would be right in terms of that calculation. On a new used machine the inflation/deflation is not going to be all that different then a new in a calculation, maybe but it will be very small in this situation. Now if you were talking six figure equipment or more, yeah might have something. You also have to figure interest rates, promotion etc. But trying to keep things equal lets say same machine one is three years old vs the new one, same cost at purchase minus a few bucks, lets say we spent 30k on it which seems pretty middle of the road around here. So we have spent 3k more on new then the older one. In theory the new tractor should be worth 3k more than the older one at least for the few first years or so. 20 years from now year wont matter as much, newer tractor might take a more of a hit but doubtful. Next buying a new tractor means more warranty, that is worth something, what its worth, I don't know, but the 3k gap dropped some. The next thing is being three years newer means a few things, 1. Potential better design, old flaws fixed, better gadgets added, again there is value there. Lastly a three year old machine theoretically will last three years less than the new one, has more wear and tear on it, which ultimately affects a price per year value.
Again im not against used stuff, i buy it too, can get some good value, look hard enough you can get steals. But with that said I just don't think its there in the new used market, prices are inflated due to loans out more than anything else.
