Deere or Fendt

Fragonard

Member
I won’t look through 21 Pages to find what everyone posted. This is way beyond any reasonable debate.

No matter what they are, depreciation is difference between what it’s bought and sold for. i think that is clear for most.

Someone wrote that the price for running a tractor was dependent on if you bought another one, or it was your last.

I really don’t know how to respond to that.

i really am surprised that there can be so big differences between how people, running businesses, look at basic economic terms. There really is no room for interpretation in this stuff.

This confusion between cashflow and bottom line is really a mystery for me.
That one was priceless [emoji15] [emoji15] [emoji15]
 

sexy lexy

Member
the salesman is not running your business or collecting tax from you, he is concerned with just one thing ............. Selling - it's not hard for someone who sells a cheaper brand to the one you are trading to make a deal look better but you are trading DOWN doing so, and the deal will not reflect the true cost of your outgoing tractor at all if you are daft enough to fall for such dumbed down numbers

I posted this earlier in this thread but seems to have been lost on you
Trade down?, Clive obviously thinks the higher value kit you have in the shed, the stronger business you have, who's to say you bought a cheaper tractor ie mf, case, claas kept it 5 years nd bought the same model again the running costs could easily be less than a fendt.
 

sexy lexy

Member
But what odds does it make- we aren't talking about the same machine. They are two entirely different assets.
OK, apply your theory bought the fendt for 115k sold for 80k, cost 35k, bought another one for 140k sold it for say 100k, cost 40k, that's how some people work out their running costs for their tractors, the 25k to upgrade to the 140k fendt is neither here nor there, your fairy God mother pays the 25k nd is not paid out of your business, if it makes you feel better??‍♂️
 

Mouser

Member
Location
near Belfast
OK, apply your theory bought the fendt for 115k sold for 80k, cost 35k, bought another one for 140k sold it for say 100k, cost 40k, that's how some people work out their running costs for their tractors, the 25k to upgrade to the 140k fendt is neither here nor there, your fairy God mother pays the 25k nd is not paid out of your business, if it makes you feel better??‍♂️
That IS the running cost for the 2 tractors. The 25k is included in the 140 purchase price for new. That is how it is calculated, it's the only way to calculate and estimate running costs.
 

sexy lexy

Member
That IS the running cost for the 2 tractors. The 25k is included in the 140 purchase price for new. That is how it is calculated, it's the only way to calculate and estimate running costs.
OK running costs plus an additional 25k to trade up for a new one, still got to pay it, it's a cost.?‍♂️
 

principal skinner

Member
Arable Farmer
Location
Bedfordshire
I really don't understand how many people confuse costings, all costs known for outgoing machine, giving cost of ownership or cost per hour, cost to change is irrelevant if cash allows (car salesman favourite trick just giving you cost to change) cost of ownership of new machine is unknown until the day it is sold unless on a buy back deal, even then it can be lowered by selling privately.

60k 80k or what ever is all irrelevant and nothing at all to do with the running costs of the old machine, invoice price-sale price + repairs, fuel and insurance = cost of ownership, yes or no???
 

Serup

Member
Mixed Farmer
Location
Denmark
I really don't understand how many people confuse costings, all costs known for outgoing machine, giving cost of ownership or cost per hour, cost to change is irrelevant if cash allows (car salesman favourite trick just giving you cost to change) cost of ownership of new machine is unknown until the day it is sold unless on a buy back deal, even then it can be lowered by selling privately.

60k 80k or what ever is all irrelevant and nothing at all to do with the running costs of the old machine, invoice price-sale price + repairs, fuel and insurance = cost of ownership, yes or no???

Apparently it’s debateable :unsure:, which i don’t understand.
 

Serup

Member
Mixed Farmer
Location
Denmark
So who pays the 25k?!, is that not a cost against either the old or new tractor?!

The buyer.
No. It’s the difference in new price on two different tractors.

You buy one tractor, for whatever amount it was, and sell it later for less. The difference is the depreciation. The end - of tractor number 1.

Then you buy another tractor for more money than the last, you pay the full amount, and drive happy away into some field.
If and when you come back from the nice field, and sell your second tractor, the depreciation on that will then be know. The end - of tractor number 2.

The 25k is the gain in cash tied up in assets to continue to run your business. The only cost is the opportunity cost of that 25k, untill you sell the second tractor and get the rest of your money back. that means that it will probably be more expensive to own tractor number 2, which is how most things evolve over time.
 
I really don't understand how many people confuse costings, all costs known for outgoing machine, giving cost of ownership or cost per hour, cost to change is irrelevant if cash allows (car salesman favourite trick just giving you cost to change) cost of ownership of new machine is unknown until the day it is sold unless on a buy back deal, even then it can be lowered by selling privately.

60k 80k or what ever is all irrelevant and nothing at all to do with the running costs of the old machine, invoice price-sale price + repairs, fuel and insurance = cost of ownership, yes or no???
Yes, and I agree with the way its worked out, but I think the confusion is where some people start their maths from. ie, New tractor sat in yard , five years later want a new tractor sat in yard, and put all the difference in money to depreciation .
 

Chris F

Staff Member
Media
Location
Hammerwich
Just caught up with this thread - it's priceless. I think this is how my professor felt trying to explain nth dimensional geometry to me at university.

What things cost and their cost to the business being two different things - got to love the english language.
 

SFI - What % were you taking out of production?

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  • 50-75%

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    Votes: 3 1.7%
  • 100% I’ve had enough of farming!

    Votes: 4 2.3%

Red Tractor drops launch of green farming scheme amid anger from farmers

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As reported in Independent


quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

read the TFF thread here: https://thefarmingforum.co.uk/index.php?threads/gfc-was-to-go-ahead-now-not-going-ahead.405234/
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