Machinery dealers/manufactures, have they lost touch with farming reality?

[Hilly]

I don’t think there’s any right or wrong; but there is a time or deal when it makes sense.

It’s not only the purchase price, but running costs. Seemingly 30k repair bills are not uncommon now for 180hp tractors.

30k ffs I have two 200hp tractors and not 30k invested in the pair never mind a repair bill Jesus that’s savage .

 

[Secret Agronomist]

Last merlo we changed 18 months ago. £6.80/hr. 5yr old 6000hrs. And that was changing to a newer model and going up a size.

Makes my JCBs look sensible.
We run 2 x 526 (rear engine model) one 2006 and one 2008 we would be IRO £40,000 to change each one which is about £5/hr. However we have had significant expenditure in that ownership time frame, whereas the like of Chae will have had nothing but regular servicing.

 

[Against_the_grain]

This issue is across all machinery; I never understood why people would change a tractor or loader or truck that had low hours only to pay over the odds to keep new. I see some see the light.

For example I know one contractor that used to change his Jcb loader every few years. But that gap widened from 20k to 80k to change. We both agreed his trade machine was worth more to him than the trade in value. So as 80k was the deal to move up; we both agreed if he found a similar machine to his trade in for similar or less money; that was the way to go. So now he runs two identical Jcbs for less money than the cost to change for a new one.

His depreciation has lowered; and he has 2 machines, not just 1 and peace of mind if one goes bang.

That said, if you like the simplicity of fueling and driving; keeping within warranty is the only option.

At the end of the day, sure we are all millionaires and it’s only money

His problem will be he has had his cake already by running the machines for longer periods. He wont be able (or will stress cashflow considerably) when these machines are at the end of their useful life, to change for a new machine and will be stuck in the same circle just lower down the chain, constantly running second hand gear. It works out the same (roughly) over the years whether you change every 3/5years or run in to the ground and then try and go again. New machine prices are still increasing 4%+/year.
Something that might cost 80k to change this year will likely cost £85ish next year. We have an old ford5000 on the farm. Been here since new. Its cost to own is VERY VERY VERY cheap per hour/year/acre, BUT it doesn't even cover the deposit of a similar tractor these days. THATS the problem.

 

[lexion780tt]

Surely if you keep them for longer and keep the money your saving in 10 years you could keep old one buy new one and still have money left, good 4.5 forklifts with not stupid hours can be bought for below 20k now just buy 2 and run 4 20 years

 

[D14]

Dealers and manufacturers must be worried about life after BPS. Regulation, especially for emissions, is making production costs higher but machinery inflation is just ridiculous at the moment.

I have a 400hp hire tractor for 12 weeks/year. The current 2017 one is 3 years old and is due to be changed. The same spec replacement is 25% more to buy and hire than the current one!

Where do we go? A bigger fleet of older machines kept for much longer? Why do we all feel the need to buy new gear and trade it on for new after a few years?? The Americans & Aussies don't do this - they keep them for far longer.

Its because we have all be lead to believe things are to risky outside of warranty. Quite amazing really how over the last 15 years sales staff have managed to sell tractors to us all off the back of them being so reliable and hold their values, yet in the same breath you need the warranty and then also worry us not to run them past the warranties. A local contractor friend (about 20 tractors) has about had enough. He's never had so much stuff on finance and warranty packages ever in his 40 year career. He's thinking about downsizing selling the newer stuff off to completely clear all outstanding finances and then taking life easier with bought and paid for equipment that won't leave the yard unless its for a proper rate per hour.

And as for dealers manufacturers being concerned about life after BPS and ELMS. The ones I have spoken to have no idea about what could happen to this industry.

 

[Dave6170]

Someone has to buy the new 1s if buying a 2nd 1 is the cheapest option

 

[Against_the_grain]

Surely if you keep them for longer and keep the money your saving in 10 years you could keep old one buy new one and still have money left, good 4.5 forklifts with not stupid hours can be bought for below 20k now just buy 2 and run 4 20 years

Yep thats an option

 

[D14]

Someone has to buy the new 1s if buying a 2nd 1 is the cheapest option

Thats why we are buying into good used now to keep for 20 years. We are taking ourselves out of the market effectively and will be sitting on a number of pieces of equipment that will actually depreciate very little. I looked at a tractor yesterday that had cost £100,000 new in 2008. Now with 5500 hours and very tidy private sale is £25,000 and I need to re tyre it.

 

[Hampton]

In September last year I watched a 2019 MF7719S with 300 hours on the clock sell at a local farm sale for £66k.
I saw our local dealer at the sale and said if I could find something like that, I’d be persuaded to sell my 2012 MF6480 (4500hrs) which he’d already valued at £34k.
“I’ll see what I can do” he said think the cost to change worked out at nearly £60k for a 7718

 

[JJT]

In September last year I watched a 2019 MF7719S with 300 hours on the clock sell at a local farm sale for £66k.
I saw our local dealer at the sale and said if I could find something like that, I’d be persuaded to sell my 2012 MF6480 (4500hrs) which he’d already valued at £34k.
“I’ll see what I can do” he said think the cost to change worked out at nearly £60k for a 7718

Know someone who paid 110k for a 7719s in 2019. Full spec with auto steer, front pto ect. But.....

 

[EddieB]

I bought two NH tractors in 2008 (a 7030 and a 7040). I still have the 7040 but the 7030 has been swapped twice. Excluding scheduled serving I have spent c. £10k on the 7040 and have spent £90k swapping the other tractor twice. The newer tractor is probably currently worth £30k more than the 7040. By my reckoning I am £50k better off with my old 7040.

 

[Hilly]

Surely if you keep them for longer and keep the money your saving in 10 years you could keep old one buy new one and still have money left, good 4.5 forklifts with not stupid hours can be bought for below 20k now just buy 2 and run 4 20 years

It Disney matter what you do it s cheaper than a 3 year turn around new one , but if I could afford it I would turn everything around at three be great to have new stuff all the time but I ca t afford to even get close to it so I don’t .

 

[Spencer]

30k repair bills are not uncommon now for 180hp tractors.

We don’t all run JD you know

 

[Suckndiesel]

Had a call from a machinery manufacturers rep suggesting that it might be a really good time to change my machine (telehandler).
I explained that it was not on my “to do” list but that if the deal was right I might be persuaded.
so the dealer rep turns up and we go through the process. I’m expecting a deal that is too good to refuse .......... well that was a mistake
My machine has just turned 4 years old and has only done just over 1700 hours. Cost to change quoted at £35.5k [emoji50][emoji50][emoji50]
What the manufacturer doesn’t realise is the damage this has done to my thoughts about the dealer and manufacturer.
So that’s a cost to change of almost £21/hr.
Do other forum members think that is reasonable or unaffordable? It is certainly far more than I expected.
Current machine will be staying with me for a good few years yet now [emoji6]

Going on clives way of calculating it, what was the cost of ownership of your machine, ie what it cost you new minus what they’re offering you now?

 

[SilliamWhale]

Thats why we are buying into good used now to keep for 20 years. We are taking ourselves out of the market effectively and will be sitting on a number of pieces of equipment that will actually depreciate very little. I looked at a tractor yesterday that had cost £100,000 new in 2008. Now with 5500 hours and very tidy private sale is £25,000 and I need to re tyre it.

Thats cheap

 

[An Gof]

Going on clives way of calculating it, what was the cost of ownership of your machine, ie what it cost you new minus what they’re offering you now?

Lies damned likes and statistics.
Willl have to go and look it up to check.

For me it’s the true cost to put me back in a similar position.
The residual value of the current machine should have benefited in part from any change in new pricing.

 

[D14]

Thats cheap

Magnum 310 and very tidy. We have run two others (shouldn't of got rid of them) and we found them very reliable machines. Not ideal on the roads for hauling but they will do it if required.

 

[Andrew]

Just divide hours worked by cost to change. I wouldn't be much below £10 hr like some on this thread. Dealer knows that's figure we work towards and quotes accordingly I think.

Interesting your dealer works towards it? To be honest it’s a figure I’ve never calculated before. One of those machines thats essential and we buy what the drivers like.

 

[Against_the_grain]

Lies damned likes and statistics.
Willl have to go and look it up to check.

For me it’s the true cost to put me back in a similar position.
The residual value of the current machine should have benefited in part from any change in new pricing.

No thats cost to change.
True cost of ownership is what you paid minus what you sold it for.

 

[Chae1]

Interesting your dealer works towards it? To be honest it’s a figure I’ve never calculated before. One of those machines thats essential and we buy what the drivers like.

Are not all of your machines essential?

I'm sure you have all JCBs.