New vs Used (from a financial perspective)

[Puddnhead]

Most financial consultants will tell you that buying a new car is a bad decision from a purely financial point of view (It can still be a good personal decision if the financial loss is equal to the joy of owning a new car). The depreciation in the first few years of owning a car is too high to justify the purchase. I was wondering if the same is true of tractors If it is, then are there other reasons to buy new?

I am figuring ownership costs to be depreciation + operating costs + lost investment income from the purchase price (which I figure to be 5-6%... I am perhaps foolishly optimistic about the economy). I figure that an older tractor won't depreciate and won't lose as much investment income , but will have higher operating costs. I am assuming a ten year time frame and am looking to buy a sub compact or roughly equivalent tractor.

If I buy used, how old should the tractor be? Obviously a really old one will hardly depreciate at all, but will have higher operating costs. I don't have the tools or skills to do repairs on my own, so it will be going to a mechanic or dealer.

Just to concretize the decision a bit, our local Kubota Dealer is selling BX2360s with a 60 inch deck for 11,700.00 and is offering 0% financing for 60 months (which cuts down on lost investment income). Taxes and fees come out to about 900. Alternatively, I have seen used BX's with similar HP and cutting deck with under 500 hours going for 6.5-9K depending on the condition.

 

[nybirdman]

You can't compare tractors to cars..quality built tractors will hold their value much better.I see 1940's Ford 8N's. for $2500-$3,000.With zero percent interest,it is difficult to buy used,at least a low hour tractor.
check tracorhouse.com for used prices.
On a tractor;it isn't the year built....hours and over-all condition determine prices.

 

[flusher]

Most financial consultants will tell you that buying a new car is a bad decision from a purely financial point of view (It can still be a good personal decision if the financial loss is equal to the joy of owning a new car). The depreciation in the first few years of owning a car is too high to justify the purchase. I was wondering if the same is true of tractors If it is, then are there other reasons to buy new?

I am figuring ownership costs to be depreciation + operating costs + lost investment income from the purchase price (which I figure to be 5-6%... I am perhaps foolishly optimistic about the economy). I figure that an older tractor won't depreciate and won't lose as much investment income , but will have higher operating costs. I am assuming a ten year time frame and am looking to buy a sub compact or roughly equivalent tractor.

If I buy used, how old should the tractor be? Obviously a really old one will hardly depreciate at all, but will have higher operating costs. I don't have the tools or skills to do repairs on my own, so it will be going to a mechanic or dealer.

Just to concretize the decision a bit, our local Kubota Dealer is selling BX2360s with a 60 inch deck for 11,700.00 and is offering 0% financing for 60 months (which cuts down on lost investment income). Taxes and fees come out to about 900. Alternatively, I have seen used BX's with similar HP and cutting deck with under 500 hours going for 6.5-9K depending on the condition.

I think you've answered your own question--if you dont have any mechanical skills to offset the risk of expensive repairs for a used tractor, then buy the new BX2360 with the 0% interest deal and forget about depreciation and the other financials, chill out and enjoy your tractor. Use it for however long it serves your purposes, then get rid of it--private sale will generally get you more $$$ than the dealer trade-in price for your used tractor. Then go shopping for your next tractor.

 

[dodge man]

I feel that buying a used tractor will save some money, IF you know what your are looking at. I bought a new BX2350 about 3 years ago, and didn't have a clue what I was looking at. The big problem with used tractors to a new buyer, is they look like crap. They get used, and if they get used for mowing a lot, the deck starts looking pretty ratty after about 50 hours of use. None of this hurts the way it functions, its usually just some scrape marks, gouges, and a little lost paint, but apperance wise, they can look rough.

When I bought my BX brand new, they had the same tractor used, with something like 1000 hours for about $4000 less. The hours and apperance scared me away, but my tractor has 320 hours on it now and probably only looks a little better. I would now be comfortable looking at a used BX, but at the time, I didn't know anything about them. Good luck in your search.

 

[TripleR]

Pretty much in agreement with Flusher. My brother is a mechanic and we buy nothing but used tractors for the farm on which he lives as we can get them reasonable, put a little work in them and use them just about forever. We have tractors made in the 50's and 60's out there.

I am not a mechanic though I can do my own maintenance, so I buy new or in really good condition with maintenance records. I got an 03 L5030 HSTC with 735 hours in great shape and later we bought a new M8540. I was going to buy a new L40 when I found the 5030 and it was just too good to pass up.

Bottom line, you are probably better off going new.

 

[bigbull338]

since you dont know much of anything youd be better off buying new.an you cant compare a tractor to a car,because most people trade cars every 5yrs or sooner.we have an 11yr old suv that looks as good as new.a tractor is bought in most cases for life.

 

[Carl in CT]

I love old iron, I wish I had more time and money to get more of it. That said, used anything is always a risk, obvioulsy, and if you don't know what you are looking at it's double the risk. I have a 1958 Massey Fergusson 202 Work Bull Industrial t/l/b that I got for $3,000 last year and everything works. It was worth the risk at only $3,000 and after a year its been great, I love that thing (even my wife dug a rock out with it a couple weeks ago). Same for my 1976 Troy Bilt Horse rototiller and my 1960-something Gravey brush mower.

My buddy is a tractor mechanic and he said the BX series are good machines but many people buy them thinking they can dig like an excavator and they beat the snot out of them until they figure out they need a bigger machine and they unload the BX and buy bigger (like his dad did).

If you find that sweet middle ground of moderate hours and no more than moderate use then you can get a great machine and save some dough but to me the difference of $9,000 and $11,700 is not worth the risk of buying used. If the ones you are seeing for around $6,500 aren't beat on then they may be worth the risk but be prepared to possibly spend some money on repairs soon and factor that cost and down time into your decision.

If you don't find that used gem don't feel bad getting the new BX and taking advantage of the low financing. You will get the piece of mind of knowing it has not been abused and is not on the brink of a costly failure. That's what I did with my new Simplicity lawn/garden tractor this year and I sleep well knowing I can mow the lawn this weekend with no breakdowns, if it ever stops raining.

 

[teg]

Most financial consultants will tell you that buying a new car is a bad decision from a purely financial point of view ...

I take it that you have not looked at used tractor prices Some used machine have near new prices...

Depends on your area, some place just don't have used tractors on the market. If I waited around (year or more) I could have gotten a better "deal" used but for me it's a one time purchase for a life time. If you have used ones on the market, I would be looking at them. We just didn't have many of them.

 

[Whitey]

I have bought three tractors used. One from e-bay, one from tractorhouse and one from craigslist. All three have been great machines.....although you must question the seller very well. The bottom line is you really need to take your time in investigating the potential buys........and have the courage to walk away from some if they don't seem right. It took me about a year to find my JD 770 TLB........and about the same amount for my Kubota B21 TLB. It was hard to go without a tractor for that amount of time (and I walked away from several) but in the long run I was rewarded.:thumbsup:

 

[bigbull338]

the bottomline is you must be able to look at an spot probs with used tractors because you may not get the seller to tell you straight.ive called on 2 tractors off craigslist an talked to the owner about them,an i was able to spot some probs just by talking.plus i knew that the tires would need replacing an that id have to buy a loader for them.an knew id be out $25,000 when done.an he only wanted $16000 for them.