Used Tractor Discount Percentages %%%%%

[arnoldziffel]

I've been looking for a used compact tractor to take over 7 acres of field mowing from our Massey 135.

In a general sense, is there a certain percentage discount (off new pricing) that a low hour really nice machine should come in at? In other words, if something brand new is in the $18,000 price range, what would a similar low hour, well maintained, clean as a whistle 5 - 8 year old machine sell for? (% discount?)

I've read casual references such as 25% off. Several references to 33% off. One reference to never pay over 50% of a best deal new price.

What do you think?

 

[PoorPlowboy]

Tractor Blue Book

 

[arnoldziffel]

Where does Tractor Blue Book gather sales data? Dealer reports?

Does Tractor Blue Book have a data collection method that includes private (non dealer) sales?

 

[Rocky Hoffler]

There is no definite answer. used equipment sells for what ever the seller is asking and what buyer is willing to pay. You can look at previous sales such as tractor house but prices vary for location the best price on a used tractor is what You are happy paying for it.

 

[arnoldziffel]

I think there is a little more to it.

Tractor House shows asking prices but I don't think they share selling prices.

To put it simply, do most of you think a used tractor will usually sell for less than a new one? For example, is an 8 year old machine with under 100 hours worth something less than a brand new comparable version today? Assuming no mechanical issues, good maintenance, and attractive looks, what does your gut instinct tell you to offer on the used machine -- in percentages. 10% less than new today? 25% less than new today?

Or, would you approach the used machine from a discount off its original retail price of 8 years ago? Keep in mind many buyers negotiate a discount off retail when buying new.

If the machine retailed for $20,000 eight years ago, but was purchased at 15% off for $17,000 eight years ago what does your gut tell you its ballpark value is today? 10% - 30% less than the $17,000?

I'm not looking for precise pricing formulas. I'm just trying to get a feel for what is a reasonable approach to pricing a nice, low hour used machine.

 

[motownbrowne]

From what I experienced buying our Kubota last year, the used tractors you're talking about were discounted only very slightly. I was finding lots of models ten years old or less selling for something like 10% less than they were bought for. We needed ag tires (ag is our primary use) and most CUTs are sold with R4s, so after swapping tires on a used machine, the savings would have been really nominal. That, plus the fact that you get a warranty on a new machine, and for that matter a new machine made the choice pretty simple.

They just don't depreciate the way you'd think they would. For better and for worse.

 

[murphy1244]

The first few years are tough. Why buy a 1 or 2 year old machine when I can have new with warranty and that 0% loan that everyone is so fond of.

 

[tman1020]

Quality tractors depreciate very little and slowly. When you are comparing a used tractor to new your discounts should be figured from the replacement cost. So whatever it would cost you for a new one start your discount from there because that's really the competition.

 

[downslope]

From what I experienced buying our Kubota last year, the used tractors you're talking about were discounted only very slightly. I was finding lots of models ten years old or less selling for something like 10% less than they were bought for. We needed ag tires (ag is our primary use) and most CUTs are sold with R4s, so after swapping tires on a used machine, the savings would have been really nominal. That, plus the fact that you get a warranty on a new machine, and for that matter a new machine made the choice pretty simple.

They just don't depreciate the way you'd think they would. For better and for worse.

They only "depreciate" 10% because the newer ones keep going up in price, especially with the stricter emission regs coming on line. And then there are the buyers who would prefer the older tractor just because it doesn't have the emission equipment. Even non-motorized equipment keeps going up in price as steel prices rise so that supports the price of used stuff. I always try to base what I will pay for a used item by looking at what the new EQUIVALENT would cost me with warrantee and delivery, and then going down from there.

 

[MHarryE]

My dealer offered 25% less than I paid for the L5740 than I paid for it 3 years and 650 hours ago. He told me the expected demand for prior to Tier 4 final used tractors that had been expected hasn't materialized - demand is still for the new tractors. He offered me exactly the same discount on the L56060 that he gave me on the L5740. After I got home I checked Tractor House for asking prices and found my dealer was probably cutting his margin pretty thin on the used tractor compared to what other dealers are asking for my model.

 

[chim]

In my personal experience it was a 25% discount. I only took a $3,000 hit on a B7500 that was 10 years with about 1,100 hours on it. In 2002 it cost about $12K and when I bought the L3200 in 2012 I sold it for $9K. As was mentioned, new tractor prices haven't stood still. I don't know what the nearest comparable new tractor would be to the B7500, but there is likely more than a 25% spread between $9K and the price of a new 21HP B series.

I bought the L3200 outright and had planned on trying to get $10K for the B7500. Before I wrote the check for the new tractor, the dealer saw the B7500 and offered me $9K. Since it could be written up as a trade-in, that made it worth $360 more than the $9K here due to the PA sales tax. I took the easy way out and sold it rather than dealing with goofballs and scam artists replying to ads.

 

[Poopdeck Pappy]

The brand name will be a factor too. Kubota and Deere, especially, will bring a higher percentage of their original price than some lesser known brands will.

If you want to get really silly, check the asking prices for a used John Deere 4020, which is a 40 - 50 year old tractor (made from the early 60's to the early 70's). Some asking prices are more than they sold for new (around $10,000).

For me, I just compare the used one to a new equivalent and decide whether the savings are worth the risk. If, for example, a new one is $20,000 and I can buy a 3 year old one for $15,000, I have to decide if $5,000 is worth the risk of (a) not having a warranty, (b) not knowing how (or if) the used one was serviced, and (c) not knowing how it was used or abused.

 

[downslope]

...For me, I just compare the used one to a new equivalent and decide whether the savings are worth the risk. If, for example, a new one is $20,000 and I can buy a 3 year old one for $15,000, I have to decide if $5,000 is worth the risk of (a) not having a warranty, (b) not knowing how (or if) the used one was serviced, and (c) not knowing how it was used or abused.

+1 exactly. What someone paid 3 years ago will have almost no bearing on what it will fetch today. And if the purchase was 40-50 years ago like the 4020 it means almost nothing since (1)prices have gone up so much over 50 years and (2) some buyer/sellers might consider a clean old 4020 approaching collectability status.