When contemplating a new farm equipment purchase, you can typically take two routes: buy new or buy used. There are advantages and disadvantages to both – while buying new gets you the latest farm equipment in the best condition, it also requires a significant financial investment. Similarly, while used equipment can save you money on a purchase upfront, you don’t know how long your equipment will last or when parts will need to be replaced.
While buying new farm equipment may be the right choice for your operational needs, sometimes buying used is the smarter decision. Here are some of the ways that buying used farm equipment outshines new equipment in a few significant areas.
The first and most obvious advantage of buying used versus new equipment is cost savings. Generally, used farm equipment, including agricultural and lawn & garden equipment, is much cheaper than new equipment. It is often available at a fraction of the price of new equipment. Farmers looking for affordable farm equipment can easily access machinery that fits their budget. If you’re looking to upgrade your farm equipment fast, or increase your efficiency faster, then buying used can help you do that. Think about it; with the money you would use to buy one piece of new farm equipment, you may even be able to purchase multiple pieces of used equipment.
New equipment, as opposed to used, also depreciates at a much quicker rate. Similar to how new automobiles lose their value as soon as they leave the dealership’s lot, so do new pieces of farm equipment. In the first year alone, a new piece of equipment can depreciate by as much as 20 percent. So, if you purchase a new piece of equipment at $750,000, that equipment could depreciate in value to a little over $500,000 in just the first year! While used equipment also depreciates in value, the lower upfront cost and slower rate of depreciation help to balance it out.
Your ROI is also an essential factor to consider in the debate between new and pre-owned. ROI, which means return on investment, measures your long-term financial return based on how much you initially invest. It can apply to large equipment purchases, land purchases, hiring, or anything else that doesn’t immediately show returns. The fact that used equipment involves a lower initial cost and slower depreciation means you get a much more apparent ROI when you purchase used.
Have you ever visited the dealership only to realize that the new tractor, combine, or other farm equipment you were eyeing online isn’t available in person? You then have to place an order and wait for your equipment to be delivered. But there’s good news: with used equipment, you have quicker availability. That’s because the equipment you see online or in person is typically 1-of-1. Rather than waiting for new equipment to arrive, used equipment is readily available. So you can purchase and start using your equipment on the same day.
Used equipment typically has a lower market value than new equipment. Because insurance premiums are based on the cost of replacing a vehicle, the insurance required to cover it costs less to insure against damage or loss. Used equipment that’s insured has a lower replacement cost, meaning it can be replaced by similarly valued used equipment. New equipment, on the flip side, has a higher premium cost because it costs a lot more to replace it. Buying used equipment and insuring it can save you money in the long run.
While new equipment can limit your selection due to a more limited inventory, used equipment opens up the possibilities to many different models and makers of farm equipment. Most farm equipment dealers, including Koenig Equipment, sell used equipment from various makers. Although we specialize in John Deere equipment, we also sell used farm equipment from other trusted brands, such as Steiner, Ventrac, Gravely, Kubota, and Cub Cadet.
Explore our used equipment inventory online to see what we currently have in stock.
Every farmer should care about the long-term stability of farms and farmland. One way to help protect and sustain farmable land is to buy reliable, used equipment. Rather than retiring older equipment early, trying to get a few more good years out of it can positively affect the environment. It means fewer tractors and other equipment taking up landfills and junk yards and more sustainable farming practices.
Who doesn’t love a deal? Often, used equipment sold by dealerships comes at a steep discount. You can often find great specials or tractor packages on used farm equipment as well. If you’re looking for a great deal on used or new equipment, check out our specials page for our latest offers.
Koenig Equipment specializes in various used farm equipment, from John Deere models you know and love to trusted brands that we are happy to offer as additional options.
You can visit us at one of our many locations. Let us help you find a great deal on used farm equipment.