Depreciation of CTL machines?

[AWJ Services]

This subject is often brought up so I decided to present my scenario and ask what is an acceptable depreciation for a machine.

2006 TL 140

Ran some searches on the net and it seems the prices range from the high 20k range to the high 30k range.

New these machines sold for 42k to 48k.
Sure maybe one sold here are there for lower but these are the majority of whats available used.Most ads are less than 2 months old.

So if I got 30k for mine if I sold it that is around 16k depreciation in 3 years.
Is that acceptable?

[Stillwater]

what was the revenue figures for this machine in the 3 years you used it. look at that figure and you will have the answer

[bobcat_ron]

You can anticipate an average of $5,000 per year for the first 3 years, then it will level off and only depreciate $1,000 a year.
That's kinda how my insurance is based.

[Mr. Rain]

How many hours? 500? 1500? Seems like any track machine takes a dump as far as value over 1000 hours. People are just afraid of them because of what might need to be done to the undercarriage in the near future, and the track replacement is often looming in that 800-1200 hour range. Anything over 500 hours at best is worth the same as the comparable wheel machine from what I've seen on equipment trader.

[AWJ Services]

My price range reflects all hours of machines with or without cabs.Of course the higher price machines are with less tham 1000 hours and the lower priced machines where usually no cabs and higher hours.
My machine will be a low hour with cab so I picked the lower price range to be realistic about it.

I like Rons explanation.

[bobcat_ron]

My explanation is not based on machine hours, only the model year, if you base it on machine hours, anyone looking to place a value on it can give a poorer value if they see a high hour machine that's only a year old versus a low hour machine that 5 years old, it's going to be the same.
When I renew my insurance policy on my Cat, they don't ask me what the hour meter reads, only if it's still a 2007 model, and I get the base value of it to compare with Catused.com and it always comes out even.

The only difference there will be is when you are still making payments, then the value will stay almost at par, then after the payments stop, the value drops fast, but that's mainly for insurable purposes only.

[Mr. Rain]

The only difference there will be is when you are still making payments, then the value will stay almost at par, then after the payments stop, the value drops fast, but that's mainly for insurable purposes only.

If you're looking at selling it, market value is what matters. Insurance value and how you and your accountant depreciate it for your business model really don't matter at this point, unless that's what you're trying to come up with. I read it as you're trying to put a number to it with the idea of getting rid of it.

[Stillwater]

My price range reflects all hours of machines with or without cabs.Of course the higher price machines are with less tham 1000 hours and the lower priced machines where usually no cabs and higher hours.
My machine will be a low hour with cab so I picked the lower price range to be realistic about it.

I like Rons explanation.

What?? You like rons explanation? you did not ask for a explanation. you asked if 16K was acceptable deprecieation for a 3 year period, where and how was that question answered by rons post.

The replies you have received is like asking what time it is and getting the weather report for an answer....

[AWJ Services]

What?? You like rons explanation? you did not ask for a explanation. you asked if 16K was acceptable deprecieation for a 3 year period, where and how was that question answered by rons post.

The replies you have received is like asking what time it is and getting the weather report for an answer....

Off your Meds?

Ron explained his answer not answered my question.
What good does it do to answer a question without an explanatory answer?

[Stillwater]

If you're looking at selling it, market value is what matters. Insurance value and how you and your accountant depreciate it for your business model really don't matter at this point, unless that's what you're trying to come up with. I read it as you're trying to put a number to it with the idea of getting rid of it.

Bingo!! Thank you. I also took it as if the 16K for 3 years was worth having it in the first place. and that is something only he can answer. I can come right out and say yes 16K depreciation in 3 years is acceptable in many circumstances easy no problem. but does that really have any meaning to anyone? 16K is the working figure- ask yourself questions, What capital did the machine generate in the last 3 years what did it allow you to accomplish what did your bottom line tell you. where are you now with it and where would you be without it.

[Stillwater]

Off your Meds?

Ron explained his answer not answered my question.
What good does it do to answer a question without an explanatory answer?


Exactly ! Absolutely Nothing !! when you don't answer the question in the first place.:laugh:

[bobcat_ron]

I don't think I have ever met anyone who turned down a deal on a machine just because they were worried about the depreciation.
I mean who cares anyways? Unless you were going to keep trading it off, but even then you should buy what you need now instead of later and save some money.

[Stillwater]

I don't think I have ever met anyone who turned down a deal on a machine just because they were worried about the depreciation.
I mean who cares anyways? Unless you were going to keep trading it off, but even then you should buy what you need now instead of later and save some money.

I fully agree......

[ksss]

Well to me depreciation matters.

Who runs a machine until its worthless? If your working commerically, which most everyone here does, then eventually at some point the machine gets rolled into a new one. When it does get traded or sold, don't you want to get the most dollars back you can?

Randomly checking selling prices on used machines of same make and model involves a lot blue sky.

[Stillwater]

Ksss you make a good point, but Like bobcat-ron said unless you keep tradeing them off...

[Dirtman2007]

they way I look at it is there are 1300 hrs on our tak TL150, so needless to say its made plenty of money to pay for itself. We plan on keeping it till its worn slap the hell out so it really does not matter what its worth, as long as it runs its making the money:weightlifter: