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View Full Version : New vs Old Debate?


MOturkey
06-05-2011, 09:35 AM
This comes up often in threads about major equipment purchases, but not always as a separate issue, and I'm wondering what the thoughts are of the majority?

Some purchase a mower, planning on running it until the paint is faded and the deck is rusted through. Others, like myself, trade on a more or less regular basis. There is merit in both approaches, but I'm wondering if, in the real world, there is really that much difference over time either way?

I run two 260 Gravely's. Started having two machines 3 years ago, prior to that, got by with one. I also have a Walker side-discharge I bought used, but put very few hours on it, so won't include it in this discussion. I am not particularly mechanically inclined, and do not enjoy mechanical work, so I decided early on to trade as often as feasible to avoid repairs. Other than with the first Z I owned, I've been trading as soon as, or just prior to, the expiration of the 2 year warranty. So far, it has cost me around $7 per hour depreciaton to trade, basing that on the cost of the new machine, which historically has always been higher than the original cost of the old one.

Some would argue that is too expensive, but is it really? Let's say you pay $10,000 out the door for a brand new Z. You use it for X number of years, and put 3,000 hours on it before you consider trading. For argument's sake, let's say you get $1,000 trade on your new mower, and that the new mowers haven't gone up since your last purchase (yow, right, LOL), so it cost you $9,000 in depreciation for 3,000 hours, or $3 per hour, substantially less than my $7 figure, but you have to remember that I'm normally out only the depreciation. I have no repair costs. Of the last 4 mowers I've purchased, other than regular maintenance, the only thing I've paid for out of my pocket is one deck belt, which I thought was bad, and it wasn't. Turned out the tensioner was loose.

I haven't had to replace a tire, put in a new wheel motor, replace a spindle, buy a new battery. Nothing. Plus, I normally have the availability of a loaner if something major does go wrong. How often does that happen putting thousands of hours on before trading? Also, for me, there is that "peace of mind" factor, knowing I'm not going to get surprised with a $1,000 repair bill.

I'm not knocking those that are still running 10 year old mowers, I'm simply hoping to spur a discussion which will perhaps help others decide which method works best for them.

Patriot Services
06-05-2011, 09:44 AM
Like you pointed out it makes good sense for some guys. Workers tend to be harder on equipment than owners. Lack of facilities, skills and time are other factors. I have a fully equipped shop and am a born mechanic/welder/fabricator. Dealer reliability and availabilty are important considerations as well.
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topsites
06-05-2011, 11:15 AM
It's all the same money at the end of the month.

Darryl G
06-05-2011, 11:36 AM
You left one substantial thing out of the equation realting to running newer equipment: the tax benefits of depreciating your equipment on the books.

PROCUT1
06-05-2011, 01:05 PM
I used to want to trade in mowers or keep them a period and replace them but it just never worked out. I think I was too stubborn and never looked at it too closely.

I was always growing really fast so every year I would have to add a couple machines. I would buy 2 new ztrs but end up keeping the old ones because I needed them also.

I never got to the point where business leveled out and I didnt need additional equipment. So stuff usually got run until it didnt run anymore, then a couple grand for a new engine and back on the road.

But the difference is that I did have a night mechanic and a parts stock that was better than any of my dealers so I didnt have to deal with downtime.

If a machine went down during the day, the foreman could usually run out with the service truck and fix it, otherwise it came in that night, and was good to go in the morning.

Without having that in place, if I had to rely on a repair shop, and ordering parts, and all the downtime involved, I would have definately had to rotate equipment out a lot sooner.

Richard Martin
06-05-2011, 01:19 PM
Nevermind this posting by me.

Snapper Jack
06-05-2011, 02:32 PM
Being mechanically inclined,a decent welder and fabricator, I'd rather some else eat the depreciation loses of a new mower and buy a used mower dirt cheap,soak $400 to $500 in it and still be ahead of the game if the engine would continue breathing on it's own for another 2 to 3 years.

Kelly's Landscaping
06-05-2011, 03:27 PM
Buying used vs new is another aspect of the debate and I have come down on buying new side after getting screwed on several trucks. Your example on the 3000 hour mower being worth only 1 thousand is way off. Certain items do not depreciate at the same rate as others. 2 cycle stuff becomes almost worthless after 2 seasons or so but a good ztr with a vac system they don't typically lose over 60% of their value since they are money makers and have a lot more life left in them then you think. I just hit 4400 hours on my 60" lazer this week I changed the engine around 3200 and both hydro pumps in the last 1000 hours. I wouldn't part with the mower for under 4500 dollars atm she is running great I am racking up 100 hours a month on her.

One of the better areas to invest in is a dump trucks the pickups lose their value at a much greater rate then a diesel dump truck. So why I get the idea of protecting the assets you have and trying to keep everything new there are some items that hold their own value very well. And then there are those that don't they are the items I tend to want new on. Hence Ill be dropping over 6k this season on new wackers and back packs. And as much as a new mower sounds great replacing the truck fleet is more important atm and with the 60k my new ram 4500 just cost the mowers can wait.

PROCUT1
06-05-2011, 04:08 PM
Everyone has different opinions.

I spend 5k or less on trucks and get years and years out of them and rarely have a major mechanical problem.

Machines on the other hand I buy new.
I always have trouble selling things, and I think thats because Im a poor buyer.

I see a truck that is 80k used, and its 15 years old with low miles in good shape with maybe a couple odd and end things to do and I think to myself, certainly that truck is worth 15k.

Then a year later if Im done with it, I thought I got it for a steal and come to find out the highest offer I can get on it is 3,000 and thats if I restore it to showroom condition.

So I just lost my patience selling things.

For the most part I run everything until its dead and I would rather cut it up for scrap than deal with the crap of trying to sell something.

Will P.C.
06-05-2011, 06:09 PM
Buying "used or getting deals" and selling equipment is about investing time and luck. Some guys are willing to jump through all types of hoops for buying and selling. Some guys just go straight to the dealer and it is over in a hour.