Tractor lots are full

[rScotty]

Used prices will fall first and furthest. If you have a 5 year old tractor, for which you paid $10k that was suddenly worth $15k due to the 'problems', you are not really out anything if you sell for $12k...or even $8k. A dealership with new inventory cost wholesale $10k and retailed for $15k. They have to pay interest on the Floorplan and other overhead does not give them much room to cut prices without losing real money. Unless ownership has deep pockets to ride it out, they cannot lower prices. That is why interest rate deals are popular. Eventually, they will hit a tipping point and will go out of business. There will be surprises to some who bought big brands because of dealer network as those networks cannibalize each other. The advantage to lower cost brands is that they are more attractive as the economy worsens. Some small dealers are also at risk, but that is lessened as they also tend to carry less inventory, have lower overhead and fewer in-brand competitors.

(Note: numbers are completely made up for illustrative purposes only)

I don't know what will happen with new prices. But I don't see good used tractor prices going down at all. Why should they? Part of the value of used tractors can be traced to people noticing that tractors don't suddenly get old, out of date, or quit working like old cars or other old appliances do. Tractors are a different type of manufactured good. It's a tool vs toy thing.

What may happen is that dealers find that they are overstocked without the ability to lower prices. The public may not be willing to buy at the higher prices. And people with used tractors will begin to notice that their used tractors work for them as well as a new one would.

rScotty

 

[5030]

That's me Scotty. No way would I even consider a new tractor. Mine will outlast me with proper care and feeding.

 

[deezler]

Why am I not surprised when a TBN thread about "Tractor lots are full" smoothly pivots into a a discussion of the history of currency? It's not only unsurprising, it makes sense.
rScotty

Not surprised either. I forgot about this thread, got a like for a post back on an early page so was checking it out again. Jump to last page annnnd.... oh of course the guys are talking about currency and economic policy LOL.

 

[Paystar]

I'm not surprised when new anything costs more after not being available for awhile. Some of the manufacturers will have used the down time to make improvements on their new models. Those are interesting. The brands that did nothing more than raise prices stand out in a different way.

Not saying that new features alone would make my buying decision. But new features are part of what we notice. It's not all that often that we get an inside look at manufacturing priorities.
rScotty

And that's what really P'd me off with Kubota and why I quit buying and walked away from the deal I had in progress.
The M7060 cab I was in the process of purchasing.....it's the "now economy model" that has been superseded by the M4. It has had no changes or updates since 2012. Then new years day comes and it goes from 66 thousand Canadian to $72,400.

Now the price of an MX 5400 cab here is what the M7060 used to be.

 

[5030]

Inflation is alive and well in Canada and here.

 

[rScotty]

Inflation is alive and well in Canada and here.

The best explanation for inflation I've heard is this:
That a small amount of positive inflation is always built into goverment run economic systems to avoid the alternative direction from zero - which would be "deflation".

Inflation is something we may not like, and is a political headache - but at least it is familiar and economists have some idea of how to deal with it. Deflation is unknown territory.

rScotty

 

[RobertEH]

And that's what really P'd me off with Kubota and why I quit buying and walked away from the deal I had in progress.
The M7060 cab I was in the process of purchasing.....it's the "now economy model" that has been superseded by the M4. It has had no changes or updates since 2012. Then new years day comes and it goes from 66 thousand Canadian to $72,400.

Now the price of an MX 5400 cab here is what the M7060 used to be.

I went LS over Kubota mainly because when I talked to the Kubota dealer, they said they could not promise a delivery date (annoying but understandable), and until it shipped, they could not tell me what price it would be (unacceptable).

 

[Snobdds]

There is going to be a lot of dealers that were making money hand over fist during and right after covid, to bankrupt.

High inventory costs and prices that people won't pay anymore is a going to take them out. Supply and demand shocks create this. Stable growth and stable prices prevent this. Depressions, not just a recession, reset this.

Get liquid and stack stacks of cash...

 

[Williy]

Well taking a cow to the grocery store could be a
crappy situation and there will be a big stink!

willy

 

[Hay Dude]

There is going to be a lot of dealers that were making money hand over fist during and right after covid, to bankrupt.

High inventory costs and prices that people won't pay anymore is a going to take them out. Supply and demand shocks create this. Stable growth and stable prices prevent this. Depressions, not just a recession, reset this.

Get liquid and stack stacks of cash...

I have seen some wobbly dealers getting bought out by stronger dealers and mergers, too. If it goes that way, then we end up with less, but larger dealers.