Machinery price discussion .

[quavers]

Noticed in agritrader I think it was you could get a 125hp deutz that had been pre registered for 55k and add a loader for 4k. And interest free for 3 months down and then 57 monthly payments. 5 years interest free to buy a tractor must be a first?
Same magazine case were 4+ 44. I've only ever seen 3 years interest free before.

deutz are out to buy business right now , some cracking deals in the go , make buying second hand look expensive ,

 

[Sharpy]

But owning one also works out cheaper than hiring weather your doing the hours or not, it only really works if you need a high horse power tractor for only 2 weeks of the year, like say to do all your top downing in September. Hire a big tractor for 2 weeks then continue on with your 150hp tractor the rest of the year.
I can’t make hire stack up any direction, even the fixed cost at any cost crowd struggle against it with all the service R&M contracts available now etc with HP deals. I like to have an asset at the end of paying for it.. not pay similar money as the HP bill and see it go back to the hire company after 18 months

Plus the cost of the next contract hire one will be more whereas your hp will remain the same.

 

[Enry]

Why would they do that ?

Cashflow and where the item is depreciating in their yard, esp with a seasonal item. Say if you had a set of mowers that have sat there all summer, they stand you 20k so in 6m you have paid 3% interest so they now stand you £20,600 heading into winter - better to sell them for £18k in Sept than have them standing you £21300 next March, going rusty, fading, and limiting cash available to trade in something else. When you need cash it's about what assets you can realise quickly,

 

[puntabrava]

You’re naive if you think that
Manufacturers want it off their books, at factory gate and onto their approved dealer network & therefore the dealers carry the wholegoods liability ….pronto
Dealer stocking allows this shift and manufacturers get paid, so the factories can keep production ongoing

Apparently at the JCB factory gate there is a receiver to read livelink and as the machine passes through on the lorry the invoice is sent to the dealer.

 

[mx110]

Apparently at the JCB factory gate there is a receiver to read livelink and as the machine passes through on the lorry the invoice is sent to the dealer.

Back when at college in the 97 ish we went round the JCB factory I seem to remember at that time them saying a machine didnt go on the line until it was paid for.

 

[Johnnyboxer]

Apparently at the JCB factory gate there is a receiver to read livelink and as the machine passes through on the lorry the invoice is sent to the dealer.

I am not surprised and as soon a dealer invoices the new machine to a customer or finance company, that action removes it from the stocking plan immediately and monies are debited from the dealers bank account, in minutes

 

[PI Stsker]

Apparently at the JCB factory gate there is a receiver to read livelink and as the machine passes through on the lorry the invoice is sent to the dealer.

Surely that’s how to do Buisness? The dealer wouldn’t let a tractor/telehandler out on farm on a 30 day invoice why should the manufacturer.

I can see stock being an issue, where the manufacturer requires you to hold X Y & Z to continue being a dealer / franchise, but also wants you to pay for it before it’s sold, leaving the dealer carrying it financially, although I suppose if you want to be a JCB or fendt dealer or what ever, it is what it is… if you don’t like it renegotiate with a different colour see if they will do better terms.

(Especially in today’s world of finance approved in seconds and internet transfers all on

 

[Drillman]

Surely that’s how to do Buisness? The dealer wouldn’t let a tractor/telehandler out on farm on a 30 day invoice why should the manufacturer.

I can see stock being an issue, where the manufacturer requires you to hold X Y & Z to continue being a dealer / franchise, but also wants you to pay for it before it’s sold, leaving the dealer carrying it financially, although I suppose if you want to be a JCB or fendt dealer or what ever, it is what it is… if you don’t like it renegotiate with a different colour see if they will do better terms.

(Especially in today’s world of finance approved in seconds and internet transfers all on

I wonder how many of the bigger dealers could get out if they wanted to?

let’s use say Ripon Farm Services as a random example, sure there’s lots of rumours about there finances but let’s say if the directors st down one day looked at the accounts and all agreed that there was no light at the end of the tunnel could they ring the likes of JD up and say sorry chaps but this ain’t working so as our contract is up next week/month/year to sell your tractors we’re dropping you? Anything of yours that’s left in our yard after that date come get it!

note- this is just a random hypothetical example and bears no relevance to ripon farm services or JD management policies.

 

[Alistair Nelson]

I wonder how many of the bigger dealers could get out if they wanted to?

let’s use say Ripon Farm Services as a random example, sure there’s lots of rumours about there finances but let’s say if the directors st down one day looked at the accounts and all agreed that there was no light at the end of the tunnel could they ring the likes of JD up and say sorry chaps but this ain’t working so as our contract is up next week/month/year to sell your tractors we’re dropping you? Anything of yours that’s left in our yard after that date come get it!

note- this is just a random hypothetical example and bears no relevance to ripon farm services or JD management policies.

In most cases the big boys are already paid and out as they’re on the stocking plan with the finance company apart from the rolling parts account and as mentioned above there won’t be much credit on ordered machines if any. The smaller manufacturers who used to be on 28 days are now a lot tighter 14 days or even pre delivery as they can’t affford to get caught in these situations as the stakes are all so high. So the main people exposed are the revenue, banks and finance companies

 

[SilliamWhale]

We’ve ridden the inflation wave quite well the last 3 years, changing tractors that are very young for sometimes more than we’ve paid for them, or very little depreciation. It’s all gone to pot now with used prices through the floor and new prices through the roof, so we’ll stick with what we’ve got now in 2x decent spec very young tractors that will do us for the next 5 years+. Had we been in a hire arrangement we’d be stuck with very high payments still and have nothing to show for it at the end.

Did the same with a Defender, similar to @Ducati899

Are used prices through the floor?

 

[mf7480]

Are used prices through the floor?

Trade- yes

 

[Pottersfarm]

I wonder how many of the bigger dealers could get out if they wanted to?

let’s use say Ripon Farm Services as a random example, sure there’s lots of rumours about there finances but let’s say if the directors st down one day looked at the accounts and all agreed that there was no light at the end of the tunnel could they ring the likes of JD up and say sorry chaps but this ain’t working so as our contract is up next week/month/year to sell your tractors we’re dropping you? Anything of yours that’s left in our yard after that date come get it!

note- this is just a random hypothetical example and bears no relevance to ripon farm services or JD management policies.

JD can terminate the deal whenever they want to giving 4 weeks notice.

 

[thesilentone]

Cashflow and where the item is depreciating in their yard, esp with a seasonal item. Say if you had a set of mowers that have sat there all summer, they stand you 20k so in 6m you have paid 3% interest so they now stand you £20,600 heading into winter - better to sell them for £18k in Sept than have them standing you £21300 next March, going rusty, fading, and limiting cash available to trade in something else. When you need cash it's about what assets you can realise quickly,

You must remember, paid for stock is also a depreciating asset on the balance sheet. Where does the 3% interest charge come from if you've paid ?

You math's are a fast lane to liquidation.

The ONLY time your plan holds any merit is when their is a threat of bankruptcy.

 

[Pottersfarm]

deutz are out to buy business right now , some cracking deals in the go , make buying second hand look expensive ,

Works out the same cost when you’ve done with it because they are worth a lot less used, unless you trade against another deutz.

 

[thesilentone]

Works out the same cost when you’ve done with it because they are worth a lot less used, unless you trade against another deutz.

"
Deutz tractors are known for their low depreciation compared to other brands. Their excellent fuel economy and cost of ownership make them a benchmark for others1. Let’s delve into the world of tractor depreciation!

When it comes to calculating depreciation, several factors come into play, including the initial purchase price, usage, and market demand. Here are some insights:

1. John Deere 6210R (2013):
   • New Price: £106,000
   • Advertised Price (1850 hours): £76,500
   • Theoretical Depreciation: £/hr = 15.94 2
2. Deutz 7210 TTV (2013):
   • New Price: £95,000
   • Advertised Price (2634 hours): £48,000
   • Theoretical Depreciation: £/hr = 17.84 2
3. Case Puma 215 (2014):
   • New Price: £94,000
   • Advertised Price (450 hours): £79,300
   • Theoretical Depreciation: £/hr = 32.66 2

These figures highlight the substantial money lost on machinery when changing tractors frequently. However, some farmers prefer to keep their tractors longer, focusing on high workload and frontline tasks2.

Remember, depreciation rates can vary based on workload, inflation, currency fluctuations, and individual preferences. While some opt for frequent upgrades, others prioritize longevity and reliability21. Whether you’re a fan of Deutz or another brand, managing tractor depreciation is crucial for efficient farm operations!

 

[Pottersfarm]

"
Deutz tractors are known for their low depreciation compared to other brands. Their excellent fuel economy and cost of ownership make them a benchmark for others1. Let’s delve into the world of tractor depreciation!

When it comes to calculating depreciation, several factors come into play, including the initial purchase price, usage, and market demand. Here are some insights:

1. John Deere 6210R (2013):
   • New Price: £106,000
   • Advertised Price (1850 hours): £76,500
   • Theoretical Depreciation: £/hr = 15.94 2
2. Deutz 7210 TTV (2013):
   • New Price: £95,000
   • Advertised Price (2634 hours): £48,000
   • Theoretical Depreciation: £/hr = 17.84 2
3. Case Puma 215 (2014):
   • New Price: £94,000
   • Advertised Price (450 hours): £79,300
   • Theoretical Depreciation: £/hr = 32.66 2

These figures highlight the substantial money lost on machinery when changing tractors frequently. However, some farmers prefer to keep their tractors longer, focusing on high workload and frontline tasks2.

Remember, depreciation rates can vary based on workload, inflation, currency fluctuations, and individual preferences. While some opt for frequent upgrades, others prioritize longevity and reliability21. Whether you’re a fan of Deutz or another brand, managing tractor depreciation is crucial for efficient farm operations!

As I said ‘unless you trade against another deutz’ .

 

[e3120]

I wonder how many of the bigger dealers could get out if they wanted to?

let’s use say Ripon Farm Services as a random example, sure there’s lots of rumours about there finances but let’s say if the directors st down one day looked at the accounts and all agreed that there was no light at the end of the tunnel could they ring the likes of JD up and say sorry chaps but this ain’t working so as our contract is up next week/month/year to sell your tractors we’re dropping you? Anything of yours that’s left in our yard after that date come get it!

note- this is just a random hypothetical example and bears no relevance to ripon farm services or JD management policies.

HRN managed to.

 

[Drillman]

JD can terminate the deal whenever they want to giving 4 weeks notice.

HRN managed to.

Well I suppose nothing lasts forever does it, some dealers can tell the manufacturer to get lost, I believe Sharmans effectively did that a few years back and appear to doing well with a new franchise

others as we all know, losing a main franchise finishes them.

 

[BRB John]

I find it very hard to believe that any dealer would be forced to buy equipment. Sure there's quotas and plenty pressure to buy equipment but surely never a situation where a manufacturer just phones up a dealer to tell them about the 10 new mowers on there way and they now owe them X to be paid by the end of the week.
Surely .....

 

[mf7480]

I know with the larger manufacturers the bonuses available to sell X number make it almost impossible not to do those numbers.