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Mechanics Corner: Buying used equipment

Andy Overbay Published on 28 January 2015

This has been a really good year for many of our county’s farmers, particularly our beef farmers. One sign that we have had a good year are the number of calls I fielded about ways to avoid or divert potential tax issues prior to Dec. 31, 2014.

One area many farmers are drawn to is equipment purchases. This makes sense because many times needed replacements are postponed during lean years, and after a while repairs just are not practical any more. Purchasing equipment is exciting, but it is also stressful. To state the obvious, new equipment is pricey.

Used equipment can be a great alternative when cash is limited and needs are great, but there are all kinds of precautions one needs to take to avoid the pitfalls of buying “experienced” equipment.

One of the first things I suggest you do if you are considering a used equipment purchase is to do your research. Step one in your research should be the investigation of what exactly is the new purchase price of your intended acquisition.

Often times and mostly at auctions, you can observe a bidder who comes within just a few dollars (and I have seen new prices exceeded) of paying a “new” price for an older piece of equipment or vehicle.

With some variations, I like to rely on advice my father shared with me long ago on buying used equipment, “If it brings more than 10 cents on the dollar of a new one, leave it alone. The warranty is worth the difference.” I have thought over the years, with the price of new equipment and the reality that some older equipment is better in some cases than new models of the same brand, maybe that doesn’t hold true any more.

However, when I think about why I trade equipment (mostly for improved reliability), paying for a piece of equipment that may be in the shop within a few days just isn’t very appealing to me. Therefore, I think Dad’s rule holds true unless you know everything (and I do mean everything) about the history of the used purchase.

A good example is a small square baler I am considering purchasing for our farm. Our 1976 IH 436 is very “experienced” and is apparently looking to retire. One would think that after 1.2 million bales (no misprint there) and 38 years of field experience, it would about know how to bale by itself. Be that as it may, some used balers I was looking into were around $8,000 to $10,000 for ones that seemed to be mechanically sound.

Thinking about what Dad had drilled into me, I thought I better be investigating a new baler as well, just for background information. A call to the local dealer found that the used models I was considering were priced over 50 percent that of a new baler – a locally purchased baler with a full warranty.

Being aware of a piece of equipment’s background also brings up the point of its locality. Adding freight to the cost of a used purchase can drive costs up substantially, and you also need to be aware what the type of soil is where the purchase has “lived.” Sandy soils, like those around the coast and to our south, can erode housings and pit bearings to the point where future repairs are nearly impossible.

Tractors and combines are especially bad for this as they have many nooks and crannies to hide debris and cause damaging wear. Another issue to be aware of is equipment that finds its way to the marketplace after a natural disaster, especially a flood.

Speaking of tractors, do be aware that tachometers and hour meters can be replaced just like any other component. My wife can attest to the fact that I receive several tractor sales magazines and flyers over the course of a year and pore over them much like the old Sears “wishbooks” that spelled the return of Christmas shopping.

In many issues, I will see a nice looking 30-year-old to 40-year-old tractor with an engine hour reading that just doesn’t add up.

Generally speaking, I put between 300 and 500 hours per year on my tractors under normal daily farming use. So when I see a machine that is 30 years old and only has 2,100 hours on the dial, I get a bit suspicious.

Ordinarily, that tractor ought to have more than 9,000 hours on it, and there may be a circumstance here and there where a low-hour tractor is legitimate, but again, this reinforces the thought that you need to be aware of exactly what the background of this major purchase is and is not.

Unlike the “Show Me the Carfax” ads you see on television, there is no “Tractorfax” to look at, so be sure to ask questions and seek the advice of a professional if need be.

Look for evidence that routine maintenance was carried out and grease fittings are free from their original paint; ask to see maintenance records and talk to employees about the history of the equipment being reviewed. You may find that payments on a new piece of equipment are cheaper than the repairs on the bargain. Cheaper is rarely “lowest cost,” so be wise and be informed.  FG

Andy Overbay holds a Ph.D. in ag education and has more than 40 years of hands-on dairy and farming experience.

Andy Overbay
  • Andy Overbay
  • Extension Agent
  • Virginia Cooperative Extension