- Location
- Cheltenham
Hah. Is my tax (well when we were members) paying for your rallying? I need a cut of that! lolSo, when are these subsidies in Europe going?. Just wondering how many years I can continue rallying
How long before biggest dealers pack up
- Thread starter nick...
- Start date
- Location
- Limousin/Charentes toad land
Flyingscotsman
Member
The contract hire model will need to come into play like it does in other industries and sectors…
Mind set change required in Agriculture to move away from owning high value and complex to repair equipment to a fixed cost of ownership rental model . No worries about residual values as the manufacturer will have factored these into the regular payments along with full maintenance package .
- Location
- Cheltenham
Oh yeh. The infamous cheese twin cam. From memory aren’t they fidgety things to build? Especially the head?only the engine repairs
Cowabunga
Member
- Location
- Ceredigion,Wales
While I see what you mean, the cost is still the cost and for someone like me, who buys new and keeps long term, your model would not be suitable. Indeed your model is remarkably close to a lease with a balloon payment and charge to include warranty and servicing, all of which are already available for up to five years if not more. The problem with this is that it will always be a straight deal after the first one, due to having no residual part exchange value… you just hand it back rather than pay the balloon.
Maybe we will be buying Indian tractors to do the same work for half the price
Cowabunga
Member
- Location
- Ceredigion,Wales
If they provide better value per unit of work done, including driver, maybe.
- Location
- Northumberlandia
No much use to me who doesnt do the hours of actual use too justify even more expensive hiring of things.
Ive bought everything i have with either HP or cash in the bank.
Nothing has ever been on any sort of monthly hire job & then return it & start again.
And it never will be neither, not even vehicles.
Johnnyboxer
Member
- Location
- Yorkshire
Is that a problem, if you just pay a fixed rental cost per annum and swap every year/2 years.........no need to have a residual interest whatsoever?
Just pay an upfront rental and keep hiring for 10 years, with a new one annually or biannually if your usage is less.
Value of your original p/ex, could be exchanged for cash and you could put that back into the business to aid cashflow for buying livestock/seed/feed/fert/chem
I don't get this agricultural obsession with machine ownership, in UK - don't buy, just rent the power units you need
Truck industry is virtually all contract hire
We’re the same, I’ve often thought if I was ruthless I could run one tractor of my own and hire in a 2nd from May-sept but looking at prices even if I skimped on Power (working on the assumption it’s a hire tractor so it’s there to be thrashed) it would still cost me more long term than having a couple of extra older tractors kicking about 24/7/365
Cowabunga
Member
- Location
- Ceredigion,Wales
Sounds like a very high cost way of going about it. It’s already possible to do this using conventional finance. Do not make the mistake that there is some financial saving for the farmer here because if you change every year or two, you will have to cover the interest and depreciation on the gross value. Also someone must buy or lease/hire the one or two year old unit. I cannot for the life of me see any cost reduction for the farmer or contractor.
The biggest cost reduction is to utilise the tractor or machine for every hour of every day possible. Which is where a contractor can often be the best option with a driver thrown in, spreading the cost over several farm’s workload and only costing the farmer when it is actually needed and available. Unfortunately the traditional Winter contractor workload around these parts is curtailed from now on because they will not be able to spread slurry by umbilical for several closed months. Not that it made much difference this particularly wet last seven or eight months where tractors were more confined to sheds than usual.
No decent chap or chapess would come out for £50 to inspect someone else’s work. I know you said wear points but I bet you would want him to sign to say wear points are good. The days of £50 jobs are gone. I charge £30 an hour to remove and sharpen a lawn mower blade . I should charge more but this is locals discount and out of hours (in my free time )
Flyingscotsman
Member
Lease Purchase (optional balloon) and Contract Hire are two separate finance vehicles .
CH is fully inclusive where legal title of asset sits with finance company so no need to worry about warranty or servicing.
Lease Purchase requires a separate maintenance agreement and warranty is limited to std manufacturers offering so still a risk and like you say, usually accompanied with a final optional payment at the end of the term .
10 year contract hires are not too far away with 7 year popular in other industries.
Why do farmers want to buy/own the equipment with such increasing financial risk in an industry where inputs and capex are paid at retail and outputs sold at wholesale ?
A unique industry in this respect .
glasshouse
Member
- Location
- lothians
If daddy didnt leave you a bunch of money, how else can you get kit but finance?
serf
Member
- Location
- warwickshire
Have to analyse everything nowadays and take no ones word for anything , every fekers seems to be on the take if Ur not awake , don't deserve any custom with this p!stake going on everywhere
Cowabunga
Member
- Location
- Ceredigion,Wales
The farmer will pay the full whack for it however it is financed or hired. Who else but the end user pays? Your dream of using tractors in a cheaper way is pie in the sky. The only way to do it cheaper is to increase productivity, buy used and keep for higher hours. As it always has been. If agricultural income falls below a level that is sustainable, given the cost of production of an average farm, then those farms will fail and food production will fall until price rises to a sustainable level. That’s how the capitalist system and the market works. There is absolutely nothing new under the sun.
Cowabunga
Member
- Location
- Ceredigion,Wales
Try ‘out of retained profit and savings’.
glasshouse
Member
- Location
- lothians
Savings from what?
Work?
Need the kit to do the work to make the profit to retain.
Thats like saying save up for a house by sleeping on a park bench instead of taking a mortgage
Cowabunga
Member
- Location
- Ceredigion,Wales
Could be, otherwise what the heck is the point of it? To accumulate ever more debt? There is absolutely no point in a business that doesn’t leave you with as much as a pot to pee in at the end of the day. Having lots and lots of expensive equipment with interest to pay off is not my idea of efficiency unless that equipment is kept working productively for profitable work. Plenty of farmers do still only take finance when it is subsidised and better not to use one’s own savings, leaving it in other investments, pensions, a house or whatever.
Devil's advocate
Member
- Location
- Posh side of Barnsley
Difficult in agriculture to put a lot of hours on, because of weather & the sheer amount of non tractor work to do. This is speaking as a one man band with part time help. I have three tractors, tempted to run one loader tractor as contract lease & do as much of the work as possible with that & keep two older tractors for busy times.
I do get that on mega dairies, yard tractors can do a lot of hours or in the vegetable sector.