Putting off purchase

[Anonymous Poster]

Don't know about the rest of you, but my new Kubota purchase is going to have to wait until the economy improves.

Much as I hate to admit it (especially not within earshot of my wife) it is a luxury item.

I'd be interested to hear what you all are doing. If there are more people with a similar mindset to myself then we might be seeing some bargains at the end of the year.

Not enjoying this decision - I have to drive past the orange dealership every day on the way to work. Maybe I should change my route ...

 

[Thomas]

Tom,
Indeed todays tractors and attachments are consider more of investment,and w/ investment comes big $$$.

One of the last thing one should do purchase tractor etc.. which brings hardship to the house hold.

When you are ready and your wife agree than you shall enjoy the new investment {tractor} even more so.

Hang in there.

Thomas..NH /w3tcompact/icons/wink.gif

 

[Roy]

First thing required is to determine if a big-ticket purchase is a 'want', or a 'need'. In your particular case, it is a 'want' (described as a "luxury item").

For 'wants' delaying usually pays off. First, many people jump on 'wants', just to regret it a year or two later. I know of a number of people who bought big boats, used them for a year or two, and then kicked themselves for the purchase. (In my geographic area, you have to trailer a boat for a couple of hours, or pay a marina). Give yourself adequate time to determine if you still 'want' it a year from now. For myself (admitting the tractor was also a 'want'), I spent a little over 2 years on and off looking, shopping, researching and re-asking myself, 'Do I still want it'. To my family's dismay, delayed installing a pool for 3 years, using the same philosophy.

This is what I believe you should do. (WARNING: It takes a lot of discipline from you, and your entire family). Pick out a tractor today. Ask the dealer what the monthly payments would be, and for how long. DON'T BUY. Go home and start putting that payment in a separate account each month. Act like you are paying the dealer, except for, if you find the payments are too much, there are no adverse consequences.

If you have the discipline, and make the payments, you may find that you prefer the way the investment grows, and 'playing' with the money (picking investments) more than owning a big tractor.

[Why do we, generally as a nation, demand that our government stays fiscally responsible, yet studies show that the average American family is in debt?]

 

[Boondox]

In my case, what it all comes down to is time and money. If you have enough time to do everything manually, you don't need much money. But if you don't have time to spare, you need money to hire someone else to do things for you.

The wife and I looked at all the upkeep our property and animals require...and decided the time a tractor would save us (amortized over the life of the tractor) was a solid investment even in these hard times.

Just a thought. Pete
www.gatewaytovermont.com

 

[Haroldv]

Tom I would agree with you 100%. My wife says things at her work don't look good, maybe layoff. I am going to wait and see what the next couple of months bring.

Harold

 

[Boondox]

Good points, Roy. You've described what's called a "sinking fund," which is how my wife and I have remained free of consumer debt. It took a lot of resolve, but years ago when we paid off our car we kept making payments to our savings acct. When the car eventually crapped out, we had enough in the sinking fund to pay cash for the next one...and saved ourselves the $1000/year in interest payments. That gave us the flexibility to do the same thing with our first tractor, a little B1750HSD...and then to move up to our present tractor, an L3010HSD. Think how much faster you can save up $$ if you don't have to give the bank $1000/year in interest.

The trick is to make this a way of life, and to not treat the money you save as some sort of a windfall. It's a committment to never again pay interest. Good luck.

Pete
www.gatewaytovermont.com

 

[Muhammad]

Yes, tractors are expensive to buy new, especially if your needs demand a certain sized/capable tractor...

The actual cost of a tractor, long-term (over the term of your ownership) isn't really very expensive if averaged out monthly. But the initial investment is substantial for sure... whether paid in full or paid monthly for 3-5 years on a loan.

The others gave some good advice. It comes down to a want, or a need.... a need can usually be justified but a want might wait for the expenditure to be more possible financially.

For something that won't generate income for you, but rather save expense (and expenses that aren't really required) yes, it could be considered a luxury item. /w3tcompact/icons/smile.gif It's all your choice...

 

[cowboydoc]

Pete,
You are right in your posts. When you own a business, however, it becomes a different story. You have to stay in debt to avoid taxes. For example if I have a profit with my cattle and horse business then I am going to have to pay about 50 cents on the dollar for taxes. If I buy some machinery or some more land then essentially I pay about half of what the purchase price was with the tax savings. It's not right because you have to stay in debt to avoid the govt. taking all of your profits. Same way with my real job. As soon as I've expensed equipment then I have to buy more equipment to keep my taxes down. It's really a vicious circle and doesn't allow you to ever get totally out of debt, that is unless you want to pay alot of taxes.

 

[skent]

Been there - done that. Have 6 acres of meadow/pasture, 1 mile of stone drive. Been using a 1950 case DC for the last 17 years with a home made 3 point hitch hooked to a 5' bush hog - hand clutch - fel with single action cylinders - does not have live Hyd or cont PTO - does not have PS. I do 5 hours of repairs to use it for 2. The wife and I couldn't afford a replacement - she has problems operating the DC, so if I'm not home, the snow don't get moved! She always said the tricycle is a dangerous setup and somebody could get hurt, not to mention all the skinned knuckles and broken bolts. We just kept our eyes open and sure enough last fall I found a B7300 w/60" mid mower, FEL, 5' Box blade with 180 hours (repo) and still had warrenty left, but they wanted 11K. We scraped and pinched and bought the thing and its the best money I spent. It has ROPS, hydro, easy (and safe) for the wife to use. Moves snow like there's no tomorrow. Just keep looking and asking. It will happen when its supposed to (and when your ready) - The other thing to keep in the back of your mind - if you buy a reasonable brand (Deere/Kubota/Yanmar/Mits) and take reasonable care of it - you will always be able to sell it in a heartbeat for a darn good price. Good Luck!

 

[GlueGuy]

Tom,

Listen to all the replies, they are all valid. We went through the same thing. For us we decided to purchase.

First, we had the money, so payments weren't a deciding factor. We also looked at the projects that we had; several landscaping projects, all the mowing, and the continual road maintenance (we have a 3/4 mile gravel drive).

The maintenance on the drive is something that we budget every year. Up until we got our 'bota, we hired a neighbor, and have sunk about $1K per year (amortized) into road maintenance.

For mowing, I always wanted a bigger mower, but we don't need it but 2 or 3 times in the summer; so it was hard to justify $2500 for a billy goat. The rear mower on the 'bota is only $800, so that was easier to swallow; and seems reasonable.

Each of the landscaping projects we estimated to be about $1K each when you consider that we hire somebody, they charge $300 for transport, and about $700 for a day's work.

We added all those up, and it was clear that the 'bota was worth it for us. It will pay for itself in 3 or 4 years, no sweat.

That, and after we got it, we've "discovered" other projects that weren't on the original list.


The GlueGuy