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Post by kenmb on Mar 28, 2021 19:30:45 GMT -6
Do dealerships deal in used much these days? I look at Kijiji and Ritchie Brothers and the amount of +$350,000 pieces of equipment just makes me wonder what is going on in the equipment market. Why wouldnt 400 hour machines be going back to dealerships.
I am not a big fan of going to auctions but it's looking like that is where my next items will have to be found. They won't be on dealers lots it seems. Might get lucky and see something on Kijiji, my last tractor came that way. But I may have to bite the bullet and try Ritchie Brothers for the next thing I have an eye out for. It just seems that used equipment,regardless of how old, is bypassing dealers and changing hands by other means.
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nvw
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Post by nvw on Mar 28, 2021 19:35:25 GMT -6
Dealers dump their older stuff at Auction, they also hose you on trades over a cash deal. I believe they have cut their own throats.
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Post by meskie on Mar 28, 2021 19:42:07 GMT -6
It all depends on the dealer. Lots of the bigger dealers seem to not want trades. They sit on the lot too long and doesnt look good on the books. I know of a few guys who have traded that have a trade in price but if they sell their machine privately they have a cash price at the dealer. Then there is dealers who won’t take a machine over a certain age or if the emissions have been “modified”.
If you have tried to trade a combine the last couple of years and looked at the cash price vs what they will give you for a your trade it’s pretty easy to figure out why there is so many private sales. It’s also pretty easy and cost nothing to list your equipment.
Dealers or the manufacture kinda shot their self in the foot by flipping guys one year old machine into new for a few years. Caused a lot of unsellable used equipment that ended up at auction and got bought for a lot less then on a dealers lot. Used market was a tough sell on dealers lots and made trade ins worth less then they should have. Why would a guy spend $400,000 at the dealer when he can go to RB and buy the same machine for $200,000
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Post by torriem on Mar 28, 2021 20:22:29 GMT -6
For dealers it's also often more profitable to dump them in auctions than to sell them as a premium used machine. They sell as is, so need to repair the machine or do any kind of field ready stuff. The buyer buys it, and then pays the dealers to fix it up and make it field ready. And prices at auction are often really good for the dealer, although not always. But generally it's a win win for the dealers.
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Post by kenmb on Mar 28, 2021 22:14:02 GMT -6
Maybe best described as "the times are changing". Quite likely those wonderful deals guys were getting to buy new about 5 years ago is showing the adverse effects now. And being able to list and make private deals via internet advertising is having a significant impact. 10 years ago people had the internet but still had a reason to buy/trade at the dealership but as the private/auction market has expanded and become fairly well accepted then there is less and less interest to work with a dealer on a trade in. And if the dealer is going to deal in fewer average used machines then they will for sure turn their back on an older unit.
Maybe it is just that dealers are outlets for the manufacturers these days. When you had your own privately owned and operated dealership then anything for a buck is the business model. At least that is the model I am used to. A guy can make a good dollar taking in used equipment and going through it then selling at a profit. As long as they knew what they were doing. But as simply an outlet store, then no real need to earn extra dollars on moving used equipment. The corporate system dictates how things are to be run and probably discourages dealers getting heavily involved in used equipment. I have seen some pretty unusual policies come down the corporate chain at my work, things that really effected our ability to put a profit in at the end of the year. In fact, they made it pretty hard for us to buy used electrical equipment. We made a good profit buying things as low as salvage value and selling as good electrical equipment, but the various levels of computer systems in the office made it such a PITA that we pretty much stopped our old methods.
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Post by kenworthman on Mar 29, 2021 8:16:37 GMT -6
I think dealers like the auction model because there is low risk at this time. talked to one of our local dealers about how something of his sold at a sale and he laughed it off. Said he had ten major pieces in the sale and RB guaranteed him X amount total so he did OK.
Makes sense why RB auctions are still going after supper these days. Not hard to tell which items they guaranteed a price on, feels like you could make a bid then go outside and cut the grass and come back in and be in time for your next bid. Certainly not like the old days in Nisku when they would sell a 500K machine in the time it took to drive it across the ramp.
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Post by generalchaos on Mar 29, 2021 8:19:35 GMT -6
Don’t a lot of the bigger farms lease their equipment?
I know a few farmers in my area that have grouped together to lease a fairly new combine.
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Post by torriem on Mar 29, 2021 9:08:49 GMT -6
The only difference between leasing and buying is whose name is on the loan, and how it's taxed. The payments are the same.
That said, I think the day is coming when dealers no longer sell new equipment at all and we'll we forced to lease if we want new. A lot of sectors like aviation are already like that. Nicely circumvents the right to repair laws when the terms of the lease require servicing by the dealer!
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Post by torriem on Mar 29, 2021 21:33:51 GMT -6
I should add that with a lease you still have the same liability as a loan in your own name. You're responsible for the full value of the dealer-held loan. When your lease is up, if the dealer can't make enough money selling it to pay off the loan, you're on the hook for the difference. And you don't have a machine at the end either.
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BJT
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Post by BJT on Mar 29, 2021 22:00:24 GMT -6
I think if leasing, you want a no equity lease, make the payments and flip every 3 yrs, use your capital elsewhere. But you are committed to the payments no matter what than.
With the cost of new iron I’m starting to think we won’t be able to own it anymore.
As of now, I will run what we have for quite a while I think.
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Post by SWMan on Mar 30, 2021 12:30:57 GMT -6
I should add that with a lease you still have the same liability as a loan in your own name. You're responsible for the full value of the dealer-held loan. When your lease is up, if the dealer can't make enough money selling it to pay off the loan, you're on the hook for the difference. And you don't have a machine at the end either. Those were the JD leases, predatory leasing as far as I'm concerned. Not everyone operated that way, others had the parent company or dealer guarantee the residual. |
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Post by torriem on Mar 30, 2021 12:58:36 GMT -6
Those were the JD leases, predatory leasing as far as I'm concerned. Not everyone operated that way, others had the parent company or dealer guarantee the residual. No those were Case. Info came right off their corporate web site if I recall. No matter how you cut it, someone has to hold the loan on a lease and the leasing company is not going to eat a loss. Just something to be aware of with leasing. |
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kens
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Post by kens on Mar 30, 2021 18:03:13 GMT -6
I think if leasing, you want a no equity lease, make the payments and flip every 3 yrs, use your capital elsewhere. But you are committed to the payments no matter what than. With the cost of new iron I’m starting to think we won’t be able to own it anymore. As of now, I will run what we have for quite a while I think. Hold on here, let me see if I got this straight. So you lease a combine for $100, the buyout after the 3 year lease is done is $50. The dealer then sells it at auction for $25, they would want you to pay the $25 difference. Does that not negate any benefit to a lease. Whats stopping the dealer from selling the combine to a friend for a fire sale price. That seems like it should be illegal. So for the benefit of leasing you pay a higher interest rate and still have the possibility of paying a huge cheque at the end of it. I kind of thought the biggest benefit to leasing was certainty of it, you know exactly what your cost of ownership will be at the start at the expense of equity. This is just bizarre. |
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Post by torriem on Mar 30, 2021 19:43:11 GMT -6
I don't necessarily have the details correct. However I do know the leasing company holds a loan (they bought the machine) that must be paid off.
I read somewhere recently that the residual value is often negotiated between the leasee and the leaser. Perhaps that is your protection there. And likely you have legal remedies if the dealer tried to screw you dumping it at auction.
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Post by Oatking on Mar 31, 2021 7:45:00 GMT -6
Interesting , back in the day I had two yellow bananas aka (tr96 and a tr98). I leased the tr 98 from Mazers and it was full of problems since the day I got it. At the end of the 5 year lease I was told dont worry about the pending repairs. However, THAT FAITHFUL day when I switch over to john deere , that seemed to upset the boys at mazers and Holy cow was I dinged for an end of lease term inspection even though they knew the combine was a lemon since day one. That was a 14500 work order.
Kinda makes you think how much mark up on the combines there is because initially mazers were going to absorb the 14500 work order if I bought the cr 960. I would say be careful when returning leases now and get information in writing so you dont have surprises like i had.
That said I think mazers is a good company but they were just protecting there ass I guess. They knew they lost me as a customer and wanted to screw me for the fixes.
It bothers me that newer equipment leases are not maintained very well. I will never be in the new to lease market but 5 year old combines should not look like they have been through a war. It is not surprising some machines are not greased or broken shaker arms are run all day hammering out the side of the deere combines! Oh yeah ,ran into that problem with my 4 year old 9760 back in the day. Previous owner must of had the radio turned so loud he never heard the break down. That is why when I bought my 16 s680 two weeks ago I bypassed the dealer lot and told enns buy my retiring neighbours machine and take my old deere in trade. Essentially I got a minty combine and got the dealer low interest rate and they took my old machine in trade. Our Enns sales guys are pretty good and I was happy he helped me out. Sometimes it feels weird dealing with your old buddies from high school.
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