rockinbbar
Gold Member
- Joined
- Nov 11, 2015
- Messages
- 276
- Location
- South Texas
- Tractor
- New Holland Powerstar 120, Powerstar 75, New Holland c245
I hear you, and agree in most cases.Please don't misunderstand my position. I am not saying you didn't do okay. I'm just saying the inflated purchase price of the new tractors ate a sizeable portion of the inflated price you received for your old tractor.
Also in a paper trade deal I pay very little attention to the value they assign to my trade-in. I only pay attention to the difference paid. If I'm buying a similar machine as the one I traded in this difference paid is what it cost me to own that machine.
I tend to calculate this based on dollars per tach hour. If I put 1000 tach hrs on the trade-in machine and I pay $40K difference, my costs are $40 p/tach hour.
Again, inflation clouds the air in trades. The profit margin for the work performed by the old machine has to have inflated at a similar pace as all these dollar amounts or I have lost ground.
But I deal with my tractor dealer on "ACV" (actual cash value) when talking buying or anything involving a trade.
I get the lowest cash price I can out of him. That includes whatever incentives the manufacturer may have.
Then I will decide to opt the trade in. That way the trade value is what they are actually giving me for it. Lots of folks get taken in by over allowance when a trade is involved, but if you have a good dealer who understands you want real numbers, and no slight of hand BS where the figures are concerned, you can weigh what they are actually giving you for trade.
As far as the per tach hour, by business can be very seasonal, and when my clients call and ask if I can get on their project, if I have broken equipment in the shop for repairs, or waiting for parts, I don't make that money, and even risk losing the client because I can't get the work done. I just can't make money on a tractor that in the shop. That can cut the heart out of my busy season.
everyone has to consider their own needs and cost comparisons.