So you want one hell of a deal on a piece of farm equipment?
You’d better be prepared to do the work to get that deal.
There are many factors that effect your ability to get a good deal on farm equipment. Here are my thoughts on how to get a good deal on farm equipment:
Let’s take right now (late January) for example. Spring isn’t really considered close yet for most of us. Who’s thinking about combines and harvesting equipment right now? Not many. Who’s thinking about planting / seeding and spring tillage needs? Maybe not every potential buyer just yet, but dealers certainly are. Nobody wants a planter to sit on a lot over winter from September to March, or worse, the next September+. Seasonality isn’t everything, but you’d better believe buying just before you absolutely need something to use immediately, you’ll probably pay more for it.
Yes timing kinda goes with seasonality, but look at it outside of seasonality.. Sometimes dealers are looking to move $$$ off their lots, sometimes they’re not. Sometimes auctions draw big crowds and good prices, sometimes they don’t. You also need to think about overall inventory. There still continues to be a massive glut of high dollar, low hour, large tractors out there. The timing is just better to buy tractors right now because of basic supply and demand. Nobody can be perfect at calling a bottom, but many things are looking pretty cheap right now, even relative to the last couple years. Twitter poll on the bottom from last August.
Corporate financial year end is another consideration for your timing. This is obviously very predictable. One particular company has their year end during an insanely busy time; The end of October. Despite the inconvenience, it’s a great opportunity every single year.. especially for large brand new equipment that has been sitting on the lot 30+ days.
Take the number of people you know that could afford a $250-350k tractor, then take the number of people that could buy a $60k tractor. Which do you think has more potential buyers? And why do you think nobody wants to give away nice 8000 series tractors? This is why (if you can afford and justify it) I think it’s a great time to buy nice late model less than 5 years old equipment. Especially if your trade is in that lower $$ area. More supply for you, more demand for your trade.
Two components here:
1. Length of time sitting on the lot/books
Dealers have a goal to turn inventory multiple times per year. If something sits for more than three months without a bite, especially in today’s market, it’s probably not going to sell at the current price. Look for that aged inventory over 90 days old for opportunity. Look at the stock number, sort by last date modified or added if you can.
2. Model year
Time and time again, something new comes out and everyone is scared of potential unseen issues. And these issues can and do happen. But guess what, that’s what product improvement/enhancement programs are for. Let’s take 2012 model year S Series combines for example. Some of these machines have received improvements as recently as last year. Yes, the 2014+ models got an increase power and other refinements and options, but they also now use diesel exhaust fluid too. What is that worth to you in your situation? Perception is not always reality.
Machine ordered without the premium lighting package?
Not a huge deal.. stick some LED’s in there and go
Planter ground drive and no row clutches?
Not the end of the world.. add electric drives and have the benefits of both for around the same cost
Tractor ordered with a solid front axle instead of suspended axle?
Huge deal for many.. but an opportunity on the pricing front as well
Just make sure you know what these kinds of options are worth in your market. A suspended front axle may add more value to a tractor that it originally cost when new.
Here’s where it gets tricky, especially sight unseen.. Pictures from a distance make everything look better that what it really is. This is more prominent yet in low light.. or my personal favorite picture peeve.. in the wash bay and still wet. Video can help you see things from different angles, but it’s still not going being there in person. Equipment jockeys can do unbelievable things with a can of spray paint and wax.
So other than the pictures, you have to consider real mechanical condition. Too many assumptions are made many times. Even if you have to pay for an inspection yourself, its absolutely worth the money. Look at used semi tractors for comparison. It amazes me that most $30k semis have at least basic inspection sheets advertised, but most $300k farm pieces don’t.
Trades are tough right now. There was a recent example on Twitter of a planter deal where the owner was only offered 1/2 to 1/3 of what that planter would bring, even if it was dumped at a consignment auction. It might just be worth an awful lot to list your trade yourself (or small plug.. consign it with me). Between social media and online forums like the AgTalk classifieds, you’ve never had more options for free advertising.
Cash / Finance
For the most part, you can probably forget about cash discounts on used equipment. Most salespeople and dealerships have goals to finance a high percentage of their deals; And they have funding in accounts setup to help lower interest rates. Not to mention, there are kickbacks involved in financing equipment as well. And before you go and blow up over that last statement, if you did more work and took on more risk wouldn’t you want more money too?
You can’t be in a hurry for a deal. Folks will pick up on that and it’s very likely that you’ll pull the trigger too soon on something. On the other hand (and this plays into the next section), you have to make a move when you want something. Yes this isn’t the wild days of 2012 when something was sold within minutes of the last call, but a truly good deal won’t wait forever.
Being a pain in the butt
Sorry I couldn’t come up with a one word heading for this one; And not a nice one at that. I can promise you, if you bug the living daylights out of a salesperson or a whole dealership and make their life hell, you probably won’t be getting a deal. This is going to sound terrible, but there’s an inside joke that’s well-known call the “asshole tax”… It’s real, it’s just invisible. But what’s also real is the warranty expense dealers have to write down when the manufacturer does not cover everything. This is what makes bad deals turn into terrible ones. The whole “good deals only get better, bad deals only get worse” sort of thing.
And nobody misinterprit what I’m saying here, please. I’m not trying to discourage people from filling out post-sale surveys, but if you really blindsided somebody in a survey, they’re probably not going to forget about it. Surveys are serious business and yes, corporate really does look at them all. Be honest and firm with your communication, but don’t make a scene about it. Keep a log of what happens so you can cite specific examples (just as they should have a log of promises and work done). Nobody wins in when things get out of control in bad situations.
As always, glad to hear thoughts and feedback – @AaronBobeck