How long before biggest dealers pack up

d williams · Apr 4, 2024

Flyingscotsman said:
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 .

But are the scale and margins there for uk farmers??

robs1 · Apr 4, 2024

Flyingscotsman said:
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 .

The difference between farming and many other industries is that farming needs many different machines most of which only get used for short periods but timeliness is vital, a haulage company will often use a lorry for virtually 24/7 so it makes sense in many ways to contract hire them which despite the high monthly charge it works out cheap on a hour used basis, tractors on farms are very different, of course contractors get far higher usage so contract hire works ok for them, running several older but well maintained tractors works well for many of us especially if you can do any repairs yourself, older tractors have less stupid complexities to go wrong, the problem is now news ones are so stupidly expensive it's hard to occasionally upgrade to a new one, buying an ex hire shagged tractor is risky

Tony1989 · Apr 4, 2024

I don’t think it’s just agri dealers, I enquired about a used Scania a few weeks ago but left it, email last week to say they will knock another £5k off and another email today to say they will knock another £7k off!

Devil's advocate · Apr 4, 2024

robs1 said:
The difference between farming and many other industries is that farming needs many different machines most of which only get used for short periods but timeliness is vital, a haulage company will often use a lorry for virtually 24/7 so it makes sense in many ways to contract hire them which despite the high monthly charge it works out cheap on a hour used basis, tractors on farms are very different, of course contractors get far higher usage so contract hire works ok for them, running several older but well maintained tractors works well for many of us especially if you can do any repairs yourself, older tractors have less stupid complexities to go wrong, the problem is now news ones are so stupidly expensive it's hard to occasionally upgrade to a new one, buying an ex hire shagged tractor is risky

We've for a long time bought new & kept for 20 years. With three of them that's a new one every 6 or 7 years. With modern tractors its the repair bills rather than the buying of the tractor which is expensive.

robs1 · Apr 4, 2024

Devil's advocate said:
We've for a long time bought new & kept for 20 years. With three of them that's a new one every 6 or 7 years. With modern tractors its the repair bills rather than the buying of the tractor which is expensive.

We are much the same but I think the cost new now has overtaken the repair cost issue

Devil's advocate · Apr 4, 2024

Building sites seem to love just one week self drive hire, don't know how that would work in agriculture

Devil's advocate · Apr 4, 2024

robs1 said:
We are much the same but I think the cost new now has overtaken the repair cost issue

Its the new ones that cost so much more to maintain.

Hence why I may contract hire one, good for tax reasons too.

For my business 2wd drive 80 hp is fine & sometimes those seem good value used.

Hilly · Apr 4, 2024

Ive given up any ideas of anything new its all
Shyt anyway … i go out to work for me and mine and me and mine alone im not working for a manufacturer and finance company, i work for me and if running old machines is what it takes that ls what i will do.

Cowabunga · Apr 4, 2024

Devil's advocate said:
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.

I agree. That is where older tractors and contractors come in, especially if full time labour is efficiently utilised.

Hilly · Apr 4, 2024

Devil's advocate said:
Its the new ones that cost so much more to maintain.

Used to be you bought something new and walked away with it , now buy something new its like a Venus financail trap ! They welcome you every month for the monthy spend ….

serf · Apr 4, 2024

Tony1989 said:
I don’t think it’s just agri dealers, I enquired about a used Scania a few weeks ago but left it, email last week to say they will knock another £5k off and another email today to say they will knock another £7k off!

Should hang off another month they'll pay you to have it by then !

Whitewalker · Apr 4, 2024

glasshouse said:
If daddy didnt leave you a bunch of money, how else can you get kit but finance?

I have next to no kit , however it highlights the disconnect between returns and costs of machinery and who is actually benefiting from farmers efforts. I recall a fw interview where a contractor said he used to change his kit through his cash flow, now he couldn't afford the finance for the kit . Kinda sums up many .

Tony1989 · Apr 4, 2024

serf said:
Should hang off another month they'll pay you to have it by then !

I bought a Volvo instead!

Hilly · Apr 4, 2024

Tony1989 said:
I don’t think it’s just agri dealers, I enquired about a used Scania a few weeks ago but left it, email last week to say they will knock another £5k off and another email today to say they will knock another £7k off!

Some say they slowing production ….. Scania are, i had a brand new one in yesterday unit 560 s iirc they are getting
Some size ! Need 200hp to pull themselves

Tony1989 · Apr 4, 2024

Hilly said:
Some say they slowing production ….. Scania are, i had a brand new one in yesterday unit 560 s iirc they are getting
Some size ! Need 200hp to pull themselves

Most dealers have new ones in stock now, 12 months ago their was a long wait!

Hilly · Apr 4, 2024

Tony1989 said:
I bought a Volvo instead!

Alot of drivers say the volvo s are tougher ..

Tony1989 · Apr 4, 2024

Hilly said:
Alot of drivers say the volvo s are tougher ..

Time will tell, it’s my first one

Blue. · Apr 4, 2024

Mate had a 540 Volvo,best thing I’ve ever driven.

Hilly · Apr 4, 2024

Tony1989 said:
Time will tell, it’s my first one

Hope it dose well for you .

Tony1989 · Apr 4, 2024

Blue. said:
Mate had a 540 Volvo,best thing I’ve ever driven.

This is a 500, havnt had it or driven it yet

How long before biggest dealers pack up

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Up to 25%

25-50%

50-75%

75-100%

100% I’ve had enough of farming!

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