- Location
- south norfolk
Probably won’t be visiting your dealer so often
Nick...
Nick...
Deere or Fendt
- Thread starter Alwaysworking
- Start date
Noooo, you silly sausage, it means you've clearly got a broken calculator and are running your business into the ground!! Have you not been paying attention???I bought a new Discovery 3 years ago, just traded it in for a Dacia Duster and got £2k cash back as well. Does that mean the Discovery made me money? ??
I’m not daft, next time I’m going to trade the Dacia for a pushbike ??
- Location
- Bedfordshire
How many years can you keep trading down and maintain your business to the same level
Clive's a bit gungho, Cart Blanche in his approach. It comes down to available cash, and priorities.
I drive a 5yo Isuzu pickup with 132000miles that I paid £9500 for 18mths ago, something I consider expensive enough to be driving about in. in 5yrs time, it will of amassed another 70,000miles, but I'd wager still won't of lost more than £5k in value since I bought it. £800/yr in depn. (and at that point it'll probably replace the 05 L200 that is the farm hack!) Clive, on the other hand, was discussing a vehicle that was to cost him £20k a year and still wouldn't be his at the end of 3yrs. Both will get people from A to B. Who's the more astute?
Sometimes I'll put off changing a tractor in favour of changing something else more urgently in need of upgrade, because doing that would create greater efficiencies than replacing a tractor.
Ten years ago, we ran three tractors. Today we run six. Fleet growth has occured by keeping tractors bought new for longer, and buying a second hand addition, that cost roughly the same to buy outright as the cost to change (that phrase again) the existing one to new. (workload has grown over the same time, the frontliners still do similar hours to what they ever did)
This sometimes means that the gap (cost to change) a tractor has become too large, meaning cashflow issues, or restriction on changing other machines, and necessitates that a tractor bought new is replaced by a young but second hand one. Is this negative? Is it me 'running the business into the ground' by buying a second hand tractor to replace one originally bought new? In my view, no its not - the money tied up in the kit is still growing, and efficiency of operation has been greatly improved by having the extra tractors.
As an aside, sometimes its financially (and operationally) better to keep hold of older tractors that are occasionally used, than sell them. The first one I bought cost £8250 in 2003. It had done 3600hrs. It was third in the pecking order then. Today, its still here, 7000 more hours on the clock, and worth about £6k to sell. It was written off in the books years ago, so should I sell it, there would be tax to pay. It still does about 300hrs a year, and is very convenient at certain times of year.
Different strokes for different folks I guess.
lloyd
Member
- Location
- Herefordshire
Spud ,didn't you see at 7.17 Clive was done with this thread.
How mean of you when you know he's not going to reply
How mean of you when you know he's not going to reply
He liked @principal skinner 's post sometime after 9.03pm - he's still watching.........Spud ,didn't you see at 7.17 Clive was done with this thread.
How mean of you when you know he's not going to reply
ollie989898
Member
I bought a new Discovery 3 years ago, just traded it in for a Dacia Duster and got £2k cash back as well. Does that mean the Discovery made me money? ??
Let me guess, the 2K of cash back equalled the scrap value of the Disco 3 and the Dacia is on full finance?
ollie989898
Member
Can you please explain how you are getting the 60K as a figure from your calculations? We don't know the value of the 140K tractor second hand, although we do know that the earlier one cost 110K new and was sent on for 80K giving 35K depreciation- I think most of us would agree with that. Where I am puzzled is your 60K figure- he can't realise any loss (or gain) on the new tractor as it has not gone on yet?
ollie989898
Member
All depends on how able you are to cope with the pushbike...
Obviously as machines age, one would expect repairs and maintenance to increase though this may be offset by changes to the rate it depreciates at. These are both unknowns. Under Clive's strategy- depending on how solid the residuals are (these could be guaranteed by the dealer/manufacturer even?) it may not be the outright cheapest option but he has a degree of business certainty in them and values reliability I presume or he wouldn't do it?
What is certainty worth in business? Discuss.
Fragonard
Member
No one has a gun to your head to trade in machinery. If you can afford it, buy it, if not, soldier on with the older stuff
Fragonard
Member
Correct, but Clive honestly believes that the deal only cost him 35k, which was the depreciation, of the old one.
And he'll sack any accountant that doesn't agree with him[emoji15] .
Fragonard
Member
So, what does your adding up machine say Clives new tractor, cost him, 35k or 60k?
Fragonard
Member
140k minus 80k equals 60k.
If Clive did not hand over 140k, he wouldn't have the new tractor in his yard now. So, its costing him 60k, today. Whatever deal he does in the future wont change the deal he has done.
- Location
- Yorkshire
Your calculators broken
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Deerefarmer
Member
- Location
- USA
I’ve no idea, I made it all up. A bit like some of the calculations on here ?
Speedstar
Member
- Location
- Scottish Borders
You can lead a horse to water but can not make it drink.
Fragonard
Member
Which figure do you agree with? An answer would be appreciated please?
this is going in circles.
his new tractor cost 140k. The old one depreciated 35k during ownership.