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  #51  
Old 06-13-2013, 09:07 PM
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ksss ksss is online now
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If you believe that resale means nothing, since your machine has earned all the money its needs to, you should donate it to charity and take the right off. Yes this position is that stupid.
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  #52  
Old 06-13-2013, 09:09 PM
whiffyspark whiffyspark is online now
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I don't purchase equipment with resale in mind. I purchase what I like.

If it has good resale value- terrific. If it doesnt, thats okay too.
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  #53  
Old 06-13-2013, 09:39 PM
Digdeep Digdeep is offline
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Quote:
Originally Posted by whiffyspark View Post
I don't purchase equipment with resale in mind. I purchase what I like.

If it has good resale value- terrific. If it doesnt, thats okay too.
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You should consider it or at least keep it in mind since it does have a definite bearing on your total ownership costs.
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  #54  
Old 06-14-2013, 02:46 PM
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ksss ksss is online now
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Quote:
Originally Posted by Digdeep View Post
You should consider it or at least keep it in mind since it does have a definite bearing on your total ownership costs.
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Yes it does have a bearing on ownership costs.

Here is an example of a recent purchase.

I bought a new CASE 440 wheeled machine in 06. The machine had cab, heat, no AC, no high flow but ride control and aspirator and other small adds. Price 36K.

I traded this machine in Fall of 2012 with 2000K hours on it. It was in decent shape. They showed me 25K with VTS which they itemized a value of $2250. I traded that machine on a 2012 TR320 CTL. Completely loaded including both high flow systems, ride control, EH, cab/heat/air. It cost me my machine with the VTS and 25K.

The purchase price was just over 50K for the new machine. If you do the math here is what it says. The value of my 440 after 6 years was $22750. Subtract purchase price and you get $13250. Breaking it down a little further, it cost me $2208 a year in depreciation or about $6.50 an hour. Conversely I have run numbers on some CAT MTL's and found numbers as high as $50 an hour.

I swapped into the 320 for 25K complete with all the benefits of a new machine and a dedicated CTL (or about the price of a good used machine).

I realize that trades make it tough to see true value due to front or back loading of the deal. However seeing the price of the 320 and the value of the 440 its easy to see it was not a front or back loaded deal.

I hope this illustrates what decent trade value can mean to an owner especially year after year and purchase after purchase. I can run new equipment for the price of a good used machine.

I do agree that purchasing just on resale value is not correct, also I am not advocating CASE equipment. I use them as an example simply because that is what I run, and I have the numbers. Across all lines combined, CAT traditionally has the best resale and I don't own anything CAT. I believe it is a balance that needs to be struck. However it is certainly not irrevelent.

I only brought all this up because the OP said his dealer would only give him 10K on his machine with 750 hours on it. Granted I don't know what year the Gehl is or anything about it, but to only be offered 10k on it (assuming its in decent shape), would ensure that I would not own that color again. Hence the comment which kicked all this off.

I like being able to roll into a new machine without having to start over on the purchase price, which is what you end up doing by running machines until they have no value or buying machines that dont hold their new purchase price very well.
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  #55  
Old 06-14-2013, 05:18 PM
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alldayrj alldayrj is online now
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All great points. He has to get me a hard # on what they are offering but its a 2007 that i bought for 30k. Only option is heat and cab.
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  #56  
Old 06-14-2013, 07:57 PM
AWJ Services AWJ Services is online now
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Quote:
Originally Posted by Digdeep View Post
Your resale factors into your hourly owning and operating cost whether your work pays for your machine in three years or you like it or not. It's a simple fact of opportunity cost and the math doesn't lie.
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No it does not since there is no way too possibly determine resale value. You depreciate the machines cost to zero value while owning it. If you actually owned a buisness you would know this,
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  #57  
Old 06-14-2013, 08:05 PM
AWJ Services AWJ Services is online now
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Quote:
Originally Posted by ksss View Post
Yes it does have a bearing on ownership costs.

Here is an example of a recent purchase.

I bought a new CASE 440 wheeled machine in 06. The machine had cab, heat, no AC, no high flow but ride control and aspirator and other small adds. Price 36K.

I traded this machine in Fall of 2012 with 2000K hours on it. It was in decent shape. They showed me 25K with VTS which they itemized a value of $2250. I traded that machine on a 2012 TR320 CTL. Completely loaded including both high flow systems, ride control, EH, cab/heat/air. It cost me my machine with the VTS and 25K.

The purchase price was just over 50K for the new machine. If you do the math here is what it says. The value of my 440 after 6 years was $22750. Subtract purchase price and you get $13250. Breaking it down a little further, it cost me $2208 a year in depreciation or about $6.50 an hour. Conversely I have run numbers on some CAT MTL's and found numbers as high as $50 an hour.

I swapped into the 320 for 25K complete with all the benefits of a new machine and a dedicated CTL (or about the price of a good used machine).

I realize that trades make it tough to see true value due to front or back loading of the deal. However seeing the price of the 320 and the value of the 440 its easy to see it was not a front or back loaded deal.

I hope this illustrates what decent trade value can mean to an owner especially year after year and purchase after purchase. I can run new equipment for the price of a good used machine.

I do agree that purchasing just on resale value is not correct, also I am not advocating CASE equipment. I use them as an example simply because that is what I run, and I have the numbers. Across all lines combined, CAT traditionally has the best resale and I don't own anything CAT. I believe it is a balance that needs to be struck. However it is certainly not irrevelent.

I only brought all this up because the OP said his dealer would only give him 10K on his machine with 750 hours on it. Granted I don't know what year the Gehl is or anything about it, but to only be offered 10k on it (assuming its in decent shape), would ensure that I would not own that color again. Hence the comment which kicked all this off.

I like being able to roll into a new machine without having to start over on the purchase price, which is what you end up doing by running machines until they have no value or buying machines that dont hold their new purchase price very well.

You paid 36k added 15k worth of VTS and are happy too get 22k? Not good resal value in my opinion and I am not taking into account maint. take 2000 hours and divide that into 30k plus and that is 15 dollars an hour depriciation min. Not figuring interest or sales tax into the equation.
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  #58  
Old 06-14-2013, 11:11 PM
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stuvecorp stuvecorp is offline
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Quote:
Originally Posted by AWJ Services View Post
You paid 36k added 15k worth of VTS and are happy too get 22k? Not good resal value in my opinion and I am not taking into account maint. take 2000 hours and divide that into 30k plus and that is 15 dollars an hour depriciation min. Not figuring interest or sales tax into the equation.
His VTS wasn't $15 large...thought it was more like $5 large? Thinking about it, I would have given him more for his VTS just for parts value.

I like VTS but someone is stupid to pay that.

My NH170 I bought new for $20,300 and put 800 hours in four years and sold it for $16,000. It allowed me to roll in to a new Case with all that equity. I could go on about some of my other skids but I have been able to buy new and 'flip' them rather than run them in to the ground. The only skid I've taken a beating on was that Mustang MTL16, new $33,500 and barely two years and 100 hours later got $21,000. I'm still bleeding from that.
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  #59  
Old 06-15-2013, 10:05 AM
Digdeep Digdeep is offline
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Join Date: Dec 2005
Location: Madison, WI
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Quote:
Originally Posted by AWJ Services View Post
No it does not since there is no way too possibly determine resale value. You depreciate the machines cost to zero value while owning it. If you actually owned a buisness you would know this,
And after you've depreciated the machines cost to zero you give it away for free? I don't think so. You see value in it and the money you get when selling it or trading it factors into what it costs you to own that piece of equipment.

You don't have to own a business to understand the concept of opportunity cost, residual values, etc. But who knows, you may have stumbled onto a concept that makes moot the practices and thought processes that have been part of the industry for generations??
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  #60  
Old 06-15-2013, 10:09 AM
Digdeep Digdeep is offline
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Join Date: Dec 2005
Location: Madison, WI
Posts: 1,775
Quote:
Originally Posted by ksss View Post
Yes it does have a bearing on ownership costs.

Here is an example of a recent purchase.

I bought a new CASE 440 wheeled machine in 06. The machine had cab, heat, no AC, no high flow but ride control and aspirator and other small adds. Price 36K.

I traded this machine in Fall of 2012 with 2000K hours on it. It was in decent shape. They showed me 25K with VTS which they itemized a value of $2250. I traded that machine on a 2012 TR320 CTL. Completely loaded including both high flow systems, ride control, EH, cab/heat/air. It cost me my machine with the VTS and 25K.

The purchase price was just over 50K for the new machine. If you do the math here is what it says. The value of my 440 after 6 years was $22750. Subtract purchase price and you get $13250. Breaking it down a little further, it cost me $2208 a year in depreciation or about $6.50 an hour. Conversely I have run numbers on some CAT MTL's and found numbers as high as $50 an hour.

I swapped into the 320 for 25K complete with all the benefits of a new machine and a dedicated CTL (or about the price of a good used machine).

I realize that trades make it tough to see true value due to front or back loading of the deal. However seeing the price of the 320 and the value of the 440 its easy to see it was not a front or back loaded deal.

I hope this illustrates what decent trade value can mean to an owner especially year after year and purchase after purchase. I can run new equipment for the price of a good used machine.

I do agree that purchasing just on resale value is not correct, also I am not advocating CASE equipment. I use them as an example simply because that is what I run, and I have the numbers. Across all lines combined, CAT traditionally has the best resale and I don't own anything CAT. I believe it is a balance that needs to be struck. However it is certainly not irrevelent.

I only brought all this up because the OP said his dealer would only give him 10K on his machine with 750 hours on it. Granted I don't know what year the Gehl is or anything about it, but to only be offered 10k on it (assuming its in decent shape), would ensure that I would not own that color again. Hence the comment which kicked all this off.

I like being able to roll into a new machine without having to start over on the purchase price, which is what you end up doing by running machines until they have no value or buying machines that dont hold their new purchase price very well.
Good example.
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