Hire instead of buying?

[Highashgrange]

Given the price hikes any views on long term hire compared to buying?
I’ve a 6 yr old 5000 tractor that ought to be traded otherwise the gap between new and its value just keeps widening. However i’m wondering about cashing it in and banking the money and then hiring similar in its place. I’ve got some hire prices on their way so no figures yet but what do you lot think? Its my main workhorse doing everything from topping, ploughing, drilling to spraying. Around the 250hp mark is where I’m looking.

 

[som farmer]

just changing our main tractor, and yes, difference between new, and trade in prices, are ridiculous.

the price we recieve for our product, and the cost of tractors and kit, is stupidly to far apart, it doesn't justify the machinery we buy, but we still do it.

local lad, with tractor, we use, hires his tractor, the hire cost was lower than the finance costs of buying. Perhaps more of us should look at it harder.

 

[Tarw Coch]

You’re heading down a road you’ll have a job to turn back from, if you ever want to go back to ownership it’ll be the full cost of a new tractor.

 

[mf7480]

just changing our main tractor, and yes, difference between new, and trade in prices, are ridiculous.

the price we recieve for our product, and the cost of tractors and kit, is stupidly to far apart, it doesn't justify the machinery we buy, but we still do it.

local lad, with tractor, we use, hires his tractor, the hire cost was lower than the finance costs of buying. Perhaps more of us should look at it harder.

The hire cost might be lower than the finance cost but at the end of the finance you own a tractor?

 

[vantage]

“Own nothing and be happy“, springs to mind!

 

[Drillman]

Depends if the funds released can be invested to give a return or wether there just absorbed into the business.

And obviously once off the hamster wheel and nothing for the start point it’s hard to get back on if the situation changes.

we were there wen we moved from contractors to owning a combine. We had the annual contract cost to throw at the job but no deposit or allowance for running costs.

 

[som farmer]

You’re heading down a road you’ll have a job to turn back from, if you ever want to go back to ownership it’ll be the full cost of a new tractor.

The hire cost might be lower than the finance cost but at the end of the finance you own a tractor?

and that sums to own, or not to own

leased couple of cars, but returned to ownership, you actually own the car.

the cars, you drove a new car, which was nice, the last one, 2 men went over it, for an hour, looking for 'damage', some of the scratches they listed, l couldn't even see, took pictures of what they had 'found', waste of time, still couldn't see them on the photo, refused to sign the 'satisfaction' document.

basically the car was returned in good condition, and we had zero 'damages' to pay. But, if they are going to be that particular, searching for damages, just don't want to know.

1st lease, chap looked at the car, thanked me for picking him up from the train station, saving him a good mile walk, and said 'perfect'.

 

[BuskhillFarm]

and that sums to own, or not to own

leased couple of cars, but returned to ownership, you actually own the car

You don’t own it until the final payment anyway.

For a lot would it not be better keeping to 10year old or 10,000+ hours, tractors are good for it nowadays. Even having to cut back on acerage, you can be a busy fool very quickly

 

[som farmer]

You don’t own it until the final payment anyway.

For a lot would it not be better keeping to 10year old or 10,000+ hours, tractors are good for it nowadays. Even having to cut back on acerage, you can be a busy fool very quickly

that is a really good question. Took me years to get a new tractor.

once you have a new one, you pretty well have to keep changing it, otherwise the cost to change is un-justifiable.

the other point to consider, new tractors are heavily reliant on high tech electronics, which can easily mean a huge bill, if they go wrong, ours had several warranty claims on faulty tech, that and the cab mountings shearing off, we have changed earlier than we would.

best tractors we have had here, were the JD 30 series, 6 cylinder, and long, great on our banks. Just the cabs let them down. Would we be better off, with 2/3 older type tractors, instead of 1 new one ? I don't know the answer.

 

[Johnnyboxer]

The hire cost might be lower than the finance cost but at the end of the finance you own a tractor?

Aha
But that depends on whether you want to own a tractor …..or just keep hiring one
Ownership long term isn’t free - there are repair and tyre costs

 

[Spud]

Every time you change there is a big cost.

MF 6490 new in 2008 was £48k, traded with 7000hrs and a transmission issue in 2015 for £15k against a new 7620 thats still here. (unbroken valuation was £19k iirc)

That same 6490, had it still been here, would still be worth mid teens now, with its original 7000hrs and the 9300 thats on its successor.

That new 7620 cost £90k in 2015, and was valued at £40k in 2022 against a new 8s225 at £137k
Same tractors value had dropped to £30k a year later, despite only gaining 700hrs in that time (9100 total) and the new one had gone up to £167k!

Its nuts. Spending £137k to change for shiner paint won't do the job any better or make me any more money, and in 5yrs it will have halved in value.
I'm not a hire fan though - not easy to personalise re control box mounts, power cables, freeflow return etc and can be called back. You never stoppaying either - come hell or high water, profit or not, you have to pay. If you own the thing outright, its not going to depreciate by as much as a hire will cost.

The cheapest and lowest risk method to me is to buy as young as I can afford and keep for as long as possible.

 

[BRB John]

Aha
But that depends on whether you want to own a tractor …..or just keep hiring one
Ownership long term isn’t free - there are repair and tyre costs

If you hire are all costs included in the monthly payments? Insurance, services, break downs etc?

Personally my business has never been better off when it's not paying off the burden of a new tractor.
Tractor might be 9 years old now and with some personality flaws.....
But even with all the breakdowns it's cost no where near how much it cost to buy new.
So I intend to keep it for as long as possible, opting for buying a secondhand tractor as a supporting role for a third of the price of what one new tractor would cost.

 

[JohnnyF]

I fail to see how you can hire a machine 52 weeks of the year and convince your self you’re better off having not owned it.
Hire has a place and that is short term. Say you want to do your own silage, go off and hire a couple of tractors and trailers for circa 4/5 weeks over the summer in different blocks and you’d be laughing in comparison to owning all the gear to only do 5 weeks work.
On the other hand if your going to use it all the time if you finance it over 3/4/5 years at the end of the term you have nothing to pay and have some free motoring for a few years or a hell of a deposit to put against another new one bringing your monthly’s down below hire.

 

[MF CI]

If you want to hire a big tractor for let's say four months, will the hirer be able to find anyone to take it on hire for the other eight months? Quite possibly not. So the cost of the hire is going to have to cover the depreciation, the servicing, the tyres a bit of profit, and maybe more things I can't think of right now. The cost of hiring a front line big tractor will be high, if you see what I mean.

 

[Blue.]

Circa £2k per month based on 12 months hire for a 6r215 deere,I can never make hire stack up.

 

[warksfarmer]

215hp JD, 50km/hr, front linkage etc. £500/week for annual hire so 5 years thats £130k. Purchase price depending on spec is about £150k for something standard. It'll be worth more than £20k after 5 years work and 5000 hours.

 

[mf7480]

215hp JD, 50km/hr, front linkage etc. £500/week for annual hire so 5 years thats £130k. Purchase price depending on spec is about £150k for something standard. It'll be worth more than £20k after 5 years work and 5000 hours.

That’s the same maths/ quotes as I was working with

 

[Moors Lad]

Given the price hikes any views on long term hire compared to buying?
I’ve a 6 yr old 5000 tractor that ought to be traded otherwise the gap between new and its value just keeps widening. However i’m wondering about cashing it in and banking the money and then hiring similar in its place. I’ve got some hire prices on their way so no figures yet but what do you lot think? Its my main workhorse doing everything from topping, ploughing, drilling to spraying. Around the 250hp mark is where I’m looking.

Get the hire prices, and the finance cost for a new one then do a few simple sums yourself ( over for example 5 years). There`s some pointers in a couple of the most recent postings.... You`ve got to try to think of all costs of ownership to make a job of it though.

 

[JohnnyF]

Get the hire prices, and the finance cost for a new one then do a few simple sums yourself ( over for example 5 years). There`s some pointers in a couple of the most recent postings.... You`ve got to try to think of all costs of ownership to make a job of it though.

Fixed cost, at any cost and vanity before sanity come to mind….

a set of tyres should (he says tongue in cheek) see a tractor through its finance period, as should any warranty which simplifies the numbers.

anyone financing a tractor over 5 years but only signing up for 3 years warranty needs there head seeing to..!

 

[Cocomac]

If you hire are all costs included in the monthly payments? Insurance, services, break downs etc?

Personally my business has never been better off when it's not paying off the burden of a new tractor.
Tractor might be 9 years old now and with some personality flaws.....
But even with all the breakdowns it's cost no where near how much it cost to buy new.
So I intend to keep it for as long as possible, opting for buying a secondhand tractor as a supporting role for a third of the price of what one new tractor would cost.

That’s were I’m at, think a third older tractor would be more useful and more cost effective than trading one tractor in for a new one and having to pay new tractor prices plus an extra tractor would be handy through the summer seem to be constantly swapping stuff on and off. And wouldn’t get caught out with breakdowns the same.