So you reduced cost of of chage to negate machinery price inflation by replacing with a cheaper tractor
What do you do next time ? Zetor ?
What was the actual depreciation / hr of the Fendt ? And why did you chage it so soon ? Early hours are the most expensive hours regardless of brand surely ?
I’m going to px my fendt for a zetor then - that will make it the cheapest cost to chage machine I’ve ever run ...... seriously !
What matters and this thread is about is depreciation. And that is very simply the difference between what you bought it for what you sell it for
Ask the tax man if you disagree !
Cost to change (like for like) and running costs are the subject of separate discussion
When we changed our last tractor a T7.185 3 and half years ago the price of it's replacement a T7.200 had gone up £2k in three years so it was roughly the same price as the 185 our deprecation and cost to change were more or less the same. The tractor deperation was £10/hr the cost to change was £30 k. Fast forward 3 and a half years deprecation is now just under £8/hr BUT the direct replacement has gone up almost £20k so my cost to change is getting towards £50k. So in short my deprecation is a little over £2/hr better but the tractor is £20k more. Now can you see why I value cost to change as a more important figure than deprecation. If the price of tractor had remained the same over the last 3 years then the deprecation would be more. Face it your Fendt is loosing money at the same rate as every one else, it is costing the same to run as everyone else, it is as reliable as other makes and it's productivity is the same as comparable makes. I own a Fendt so I know the way it works but I am immune to Fendt marketing.
Do you get the extra you paid for it back when you sell it?
Prices of used kit at dealers are probably not what they are sold for, do you know the price they sell it for or the price they will give you for it?
If you get a Fendt to 10,000 hours without a transmission/engine rebuild you'll have saved a big repair bill BUT the new buyer will factor that work in to the price they will give you for it.
Not quite. We just don’t see the value of the Fendt any longer. Excellent tractor which has been reliable but it’s not worth the current asking price when there’s others that are very close in terms of quality but £27,000 cheaper to buy on a like for like spec basis.
The tractor that has left was leased so we enquired about buying it and the price meant that particular tractor has depreciated by £16/hour. However to get into the exact same tractor but new showed a price to change of £23/hour so that was a typo earlier as I misread the opening post.
The replacement tractor (3 yrs old) is one of 2 or 3 used ones we will buy with the view of giving them an easy life by spreading the work. It’s a consensus decision to get out of buying new and now only buy used because you can then see much lower depreciation. It’s guranteed and will be around £5/hour. However of course you run the risk of repairs as warranty has expired.
I don’t think Fendt are any cheaper to run than most other brands from what I’ve seen. They used to be but not today as they’ve become common due to volumes sold.
Aw no our great leader has been brainwashed by the mad irish contractorI’ve said before I have no brand bias as have ran just about every mainstream manifactuer in the last 20 years here and may not run fendt in the future if better options become obvious.
I’m hearing a lot of very positive thing about current Valtra range and ownership cost / experience recently
It will be interesting to see if your policy works out cheaper, two things come to mind. Do you have capacity be able to park one for a day or two here and there as faults come up and perhaps the big one do you employ or have a good mechanic to work on them? I certainly think you need one, in my experience dealers can be good at 'firing the parts cannon' at a problem instead of properly diagnosing and fixing it. The problem today is finding a good mechanic with the proper computers, software and manuals to diagnose faults and calibrate things on the tractor, relying on the dealer could get expensive.
I like your thinking though, could be cheaper but the hassle factor could be higher.
Apologies if I’ve just waded in here without fully reading the thread. I agree with most of what you say, I try and keep tractors for long hours if I can but prefer to buy new or close to new. We run on the mainline tractors up to 1200hrs a year, these will go until 8-10000 hrs. The ones which are back ups are currently around 16-18000 hrs which dilutes the depreciation right down. I only have experience of JD and CNH, but if I want to trade a used new Holland in its always going to be a long way behind the JD.It’s the same as your doing though as your now running out of the standard warranty but just with newer ones.
In terms of the cost differences of the used. Same age Fendt similar spec, similar hours was £20k more to buy used so we’ve saved that instantly. However when they get older the price difference between a Fendt and other brands narrows considerably and any modern tractor doesn’t seem to drop past £30k now so if we’ve spent £20k less but ended up at the same value it’s actually cheaper.
Another factor is indeed a very good local mechanic that tends to specialise in used CNH products and does do full gearbox repairs if required.
I do actually think JD are presently lost in the wilderness as they are very near Fendt money new but very near CNH money used.
If you keep a tractor longer then the cost to change become too big. We generally keep tractor for 3 to 5 years any longer and the cost to change becomes too much although the deprecation may well be lower.I understand your point and agree cost to chage is important but it doesn’t reflect depreciation well. It’s rare we trade a machine for the same or similar machine, my usual reason to chage is to acquire something different / new tech etc
I don’t think our fendts are costing more to own. When I bought the last 2 it was a close decisdion between them and x2 jd 6210r’s at 4K each less. If I sold up today I would have lost a lot more on the jd’s than the 724’s from what I can see in used adds ?
The biggest factor that will influence ownership cost and depreciation / hr is how long you are prepared to run a tractor as depreciation dilutes with age. The best way to combat the increasingly high capital costs is to run these machines for more hours / years and not to keep trading down to cheaper machines.
Personally I cost each machine on it own merits and costs incurred over its ownership and purchase price vs disposal price is the only way I have ever seen true depreciation calculated
If you keep a tractor longer then the cost to change become too big. We generally keep tractor for 3 to 5 years any longer and the cost to change becomes too much although the deprecation may well be lower.
@Clive are these the tractors that are on Guaranteed buy back deals when you bought them,if so how does that work if you keep them longer than you planned for when you did the deal
Saying advertised costs for second hand tractors seem high is all good and well but are these tractors actually selling or are they even actually available? Dealers can put any price they like to make the price of a new one look attractive,we all know different people get totally different prices for the same new tractors as well
Yes that was an option at 3k hours 3 years old
As they were worth at least that buy back and they were proving reliable and were still the machine we wanted to run we decided to keep them longer. This should reduce ownership costs further from the original budget as the depreciation dilutes with age however the risk we run is increased repair cost and down time. Time will tell if it was a good decision or not I guess
I think we all need to be getting much more hours out of tractors and the days of swapping every 3 k hrs has become an expensive way to run them. 5k or even 10 should be perfectly possible without excessive downtime if you buy quality equipment and look after it
If we end up running to 10k without major issue and they still have a bit of value they will have been pretty cheap tractors
£120k new + 20% interest for purchase = £144k
10k hours later and worth £20k = £124k for 10k hours is £12.4/hr.
You can do that with new less houred tractors that are not Fendt. It’s their purchase cost that means your using more of or borrowing more money just to have a Fendt.
20k won't buy you a decent lawn mower in 10 years time though and looking at prices today a 10k old Fendt is still worth a lot more than 20k even now more like 30-35ish for a something similar on agriaffaires ??
that was the biggest issue with our old contract hire strategy - the longer you were out of the ownership market the harder it got to buy a machine, hire was the cheaper than owning at the time but as hire rates increased and owning became cheaper the cost of entry to ownership also increased
its a bit like stepping off the housing ladder in a rising market and renting because rent is less than a mortgage , not a good idea unless you never intend to own again, If I have a regret re machinery over the last 5 years it would be not buying our combines, although its been cheap it leaves us in a bad place right now where I either pay a lot higher rental for a replacement hire machine, finance a scary amount to get back into owning a machine or trade down to running used or cheaper machines. If I had bought the current one and stood a bit more cost each year at least I would have some decent equity to role into the replacement
I think a lot depends on how long term your thinking is