Resale value as a function of purchase price

[atsah]

IMO, once you get to 50HP-60HP, prices don't start going back up much until you get over 100HP or 120HP and most of it is due to demand from the "hobby farm" segment of the market. A lot of people could justify going up from a 30HP tractor to a 40HP tractor, or even a 50HP one, but once you get much past 50HP or 60HP you need a DRW pickup and a gooseneck trailer to move it and that limits your market significantly.

Aaron Z

Very true.. I can buy a big tractor around here for half of the price of a CUT.. I have been trying to sell a 8 1/2ft rear snowblower for a long time and can't even get a bite for $3000, it's a very limited market with big things in a lot of areas..

 

[Steppenwolfe]

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.

 

[Atchuuu]

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.

Who wouldn't like to do that? :drink:

 

[rScotty]

I know very little about tractors. I kind of assumed that the bigger, more expensive models such as the L4701 and MX series might be more akin to trade tools where as the L01 series more akin to homeowner stuff. For that reason, I was entertaining the thought of buying a more "serious" machine and was surprised to find a steeper discount on used vs new on the bigger machines. I think I am discovering that my assumption that these bigger models are "trade tool" grade might be incorrect. Perhaps they are just fancy "homeowner" equipment and the "real" tractors don't start until you get into ag-business stuff.

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

 

[aczlan]

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

I dont know about that. I am still seeing people asking $7-15k for similar sized backhoes from the 1960s and $15-30k for ones from the 70s and 80s.

Aaron Z

 

[daugen]

I dont know about that. I am still seeing people asking $7-15k for similar sized backhoes from the 1960s and $15-30k for ones from the 70s and 80s.

Aaron Z

https://www.machinerytrader.com/lis...-sale/list/manufacturer/deere/model-group/310
I wonder if you studied this if there is a geographical difference. Do certain tractors, particularly Asian, cost less on the West Coast new?
I bet the price of an older grey market Yanmar is higher there than here, when you see a lot more of them around, it seems like
a less risky purchase.

Those backhoes seem like a really good deal if you have some mechanical ability to do the work yourself.
Paying a dealer to maintain an old piece of machinery can be eye opening.
I've never owned a backhoe and was always eyeing one, coming to conclusion it was over my pay grade and pay check.

Having local service capability I believe adds a lot to the value of a brand locally.
If I buy a Deutz Fahr tractor, the closest dealer for which I think is in Virginia, and I put it out at the end of my lane with a For Sale sign,
it will sink into the ground before it sells locally.

 

[rScotty]

I dont know about that. I am still seeing people asking $7-15k for similar sized backhoes from the 1960s and $15-30k for ones from the 70s and 80s.
Aaron Z

Yep, I agree with your price figures. And as you get into the 80s and 90s commercial TLBs I think you'll find that the price goes up a little more....but only a little. Those 90s models and early 2000s are bringing $25 to $35 right now. Check the sales, and I think you'll find that even a nice early 2000s model with 5000 hrs, good tires, options, & new batteries will struggle to bring $40K. And $40K is about 1/3 of the new cost. I'd say the math is working.
rScotty

 

[Turbys_1700]

My biggest concern when buying an older tractor is parts availability, functionality, and convenient dealer support. My biggest concern when buying a newer tractor is parts availability, functionality, and convenient dealer support. Resale value is not high on my list of concerns.

 

[prof fate]

many commercial things don't hold their value - BUT - they make the owner money and are a tax deduction, so the math is very different.

I don't know how the down time vs up-time works on older equipment, or at what point it's more logical to replace used with new (up-time, taxes, etc).

I drive school bus part time and a new one is $80-90,000. You can buy as many used ones as you want for 5k or less. We take a few to the auction each spring, here they rarely have 100k miles on them...$4600 is the high point the past 3 years and only because it was a non-electronic diesel. The local auto trader has 3 buses listed, $2500 each.

There is little demand for a used bus..some make campers out of them, you see the odd conversion for something else. they are a 10 ton truck, you'd think they'd have more value. I can't imagine what a trans or engine costs new / rebuilt for a truck - and they are the same.

If you get 5 years to write something off, depreciation, on your taxes that can influence your decisions. There are workarounds...you can depreciate it forever...Bob and jim have a partnership, depreciate it 5 years. Sell it to partnership of jim's wife and bob's wife - they get to do it all over again for 5 years. Lather rinse repeat. You are the 'owner' of the partnership..well, technically manager on the paperwork. Profit is paid to you as a bonus.

 

[rScotty]

My biggest concern when buying an older tractor is parts availability, functionality, and convenient dealer support. My biggest concern when buying a newer tractor is parts availability, functionality, and convenient dealer support. Resale value is not high on my list of concerns.

I agree. If you have those things, "parts availability, functionality, and convenient dealer support" .... then the resale value will take care of itself.