Buying Farm Equipment
by Jim Rumsey, lecturer, Department of Biological and Agricultural Engineering, UC Davis
To properly select farm equipment, you must predetermine a number of factors. These factors include the size and/or number of farm machinery equipment needed, equipment features needed, and where to buy farm equpment. You should also be aware of some of the pitfalls you may encounter when purchasing equipment.
New vs. Used Farm Equipment
Small farming operations might find advantages in buying used equipment if the owner wishes to maintain control over certain equipment operations but finds that new equipment is not economically efficient. Used equipment also is appropriate when buying a back-up unit. Used tractors are useful to tow nut carts during walnut or almond harvest when the tractor will run a few hours seasonally. Used equipment can also be used for less-critical and/or low annual usage tasks.
You might also consider buying used equipment when starting a new farming venture. It would not be unusual for the lending institution to specify used equipment.
When you purchase used equipment, you are buying the remaining, unused service life of the equipment. All equipment is designed with a certain number of hours in it. Depending upon how it is used, maintained and repaired, the equipment will use up these hours at a faster or slower rate. (See Table 1.)
Table 1. Machinery Wear-out Life in Hours
|Machinery||Wear-out Life (hours)|
Wear out life is the point at which it is not typically economically feasible to continue repair of the equipment.
What's going on before the wear-out life of a tractor? Engine overhauls. A minor overhaul would generally consist of new rings, grinding valves, etc. A major engine overhaul would consist of new pistons, new sleeves (liners), new bearings, new injectors, etc. New tires are necessary approximately every 2,000 to 3,000 hours, depending upon use and soil conditions. Batteries should be replaced approximately every three to four years.
Pitfalls in Selecting Farm Equipment
Be cautious of smaller utility tractors that have been used with front-end bucket loaders. These types of tractors generally perform a lot of stop-and-go usage that is hard on the transmission and clutch mechanisms. Front-end loaders also are hard on front axles and front tires.
Beware of farm tractors that have been used in the construction industry. Farm tractors have not been built to withstand the rigors of construction.
Stay away from fire, water, flood or accident damaged machinery unless it is being bought solely to sell for parts. It is difficult to determine the extent of damage of such equipment, as the damage may be hidden. For example, seals (as in sealed bearings) that keep oil in won't necessarily keep water out. Internal components (bearings, gears, etc.) can be overheated and distorted from a fire and will be difficult, if not impossible, to see. Machinery that has experienced serious accidents (such as rollovers) also can have serious damage or distortion to internal components that cannot be seen.
Beware of buying any equipment from manufacturers that have gone out of business. The price may be right, but parts may be a problem. Also, later trade-in value will be much less.
Generally speaking, buy powered equipment with diesel engines. Diesel engines are more fuel efficient and more economical than equally sized gasoline engines.
Be aware that some equipment makes, models, and sizes hold their market value better than others over the years. This means that you might expect to not only pay more for this equipment, as compared to a similar item from another manufacturer, but would also expect more on the trade-in when that time comes.
Be aware that many "new" models of equipment are really not that different from last year's model.
Look closely at technical specifications between model years. It is not uncommon to find that the old model will give you similar performance specifications at a fraction of the cost of the "new" model.
Different models from the same manufacturer (particularly tractors) may not be substantially different. For example, the same engine may be used in several different tractor models, but the horsepower is increased by using turbochargers, intercoolers, etc. The same extends to other components such as transmissions, frames, final drives, etc. What this means is that models at the low end of the family may be overdesigned and should give longer service life with less trouble from major components.
The machine's age and its hour meter should be reasonably in balance. Guidelines for typical annual use are given in Table 2.
Table 2. Typical Values of Annual Use (Row Crop Operations)
|Machinery||Annual Use (Hours)|
|Tractors||1,000 (400 to 1,600)|
|Crawlers||1,200 (600 to 2,000)|
|Combines||300 (200 to 350)|
Typical values only. Annual use can vary widely from the typical values given above.
Machinery that exhibits average annual usage far in excess of the typical values given above would be priced lower than the going rate for such equipment. Machinery that exhibits average annual usage far lower than the typical values given above would be priced at higher than the going rate for such equipment.
In general, the used equipment market tends to weight the age of equipment more than accumulated hours of usage of the equipment. Generally speaking, the lower hour machine would be the better buy.
When you have narrowed your choice down to a particular unit, the first thing to find out is the asking price of the unit. It is no use going to the trouble of mechanically evaluating the equipment if the asking price is too high. However, be cautious of deals that are drastically below market value. Dealerships know the real value of machinery. If equipment is below market value, there is probably a good reason.
Keep financing separate from the purchase decision. Great financing terms will not make your equipment run any better. Before buying used equipment, contact the previous owner if possible. Determine characteristics of machine operation that would be advantageous or disadvantageous to your position. And, whenever possible, bring the equipment home for a trial run.
Marshall Publications. 1981. 101 Ways To Get A Better Deal Buying A Used Tractor, P.O. Box 1190, Minnetonka, MN 55343.
Useful Internet Sites
Machinery Buyer's Guide
Agriculture Online Machinery
Fast Finder Online
Pre-1975 New and Used Tractor Parts
The publication, "Proceedings of the Fourteenth Annual Farm Conference" (1997 Farm Conference), from which this article is taken, is available from the Small Farm Center for $10 plus shipping and handling. To order, call the center at (530) 752-8136.