Equipment depreciation and financial moves

Discussion in 'Lawn Mowing' started by ALarsh, Jul 30, 2007.

  1. ALarsh

    ALarsh LawnSite Silver Member
    from Midwest
    Messages: 2,412

    So there are either two takes on running and selling equipment, either run the mowers until they die or sell them before 1,000 hours to take advantage of the resale value. Which makes better financial sense? Should I sell my equipment before they hit 1,000 hours so they still have a decent resale value or should I plan to keep it until it dies? We are talking ztr/wb lawn mowers, I will be keeping the two strokes until they die.

    I am very happy with my equipment and would purchase the same (but new) if I sold it...

    Lets hear it.
  2. lawnspecialties

    lawnspecialties LawnSite Silver Member
    Messages: 2,524

    I keep my equipment in the best shape I can. When it becomes a hindrance to keeping it running is when I'll consider selling. Sure, getting the most for your money is important, but to me, a machine that will continue to run with minimal breakdown time is the ultimate factor. Once it becomes "undependable" out there in the field, it's gone. This may be at 500 hours or 2000 hours.
  3. BQLC

    BQLC LawnSite Senior Member
    Messages: 574

    I would have to agree with this concept. Its the down time that cost the most money.
  4. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Messages: 11,073

    I buy'em new and run my money's worth out of them if possible.

    That can mean many different things, depending on the service the mower provides.

    I don't worry about what the resale value or trade-in value is unless it's time to cycle it out... because once you cut grass with them, the value free-falls.

    If there was a good market here for used equipment, I'd never buy new.
    I'd let someone else take the loss, buy it cheap and run it until the wheels fell off.
  5. ALarsh

    ALarsh LawnSite Silver Member
    from Midwest
    Messages: 2,412

    I'd like to get some more opinions on this. Thanks!
  6. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Messages: 4,373

    I run my ZTR's like this....

    Two out of every 3 years I buy a new one.

    I traded my 2004 ZD28 this year with 1200 hours on a new 2007 ZD331.

    It was a difference of $5,000.

    Last year I traded my 2003 on a 2006, it was a difference of $5,000.

    I'll trade the 2006 in 2009, probably for a difference right around $5,000 and it'll have right around 1200-1300 hours.

    I look at it this way.

    Over the 3 years, I finance at 0% interest, ao it's $10,000 that I have financed at any given time.

    So for $300 / month (roughly) I'm running new equipement, and whichever machine is in it's 3rd year, that's the backup machine since it's not under warranty.
  7. Frue

    Frue LawnSite Bronze Member
    Messages: 1,472

    I go about every 5 th year I have 2 one back up one for everyday use. Five years from now I will buy a new one. No matter the hours, 3 to pay them off, 2 for profit, then I buy.
  8. ncls

    ncls LawnSite Senior Member
    Messages: 441

    Exactly, I lease them for 3 years, then run them for two. I maintain them very well during this time. I find I can sell them for about 1/3 of new.
  9. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Messages: 4,373

    This is what I'm getting to. I used to trade them in every other year, now I'm running them out to 3 years. Just testing the waters to see what the expenses run up to.
  10. AL Inc

    AL Inc LawnSite Bronze Member
    Messages: 1,209

    I don't do as much mowing as I used to, so now I have three machines that go out every day, A 52" Stander, and 48" and 36" walkbehinds. I have been turning over my Stander every three to four seasons, and the walk behinds which are almost ten years old, I just keep running. The 48" is on its third motor and second transmission. I pretty much buy a new line trimmer every year, and new backpacks every two to three seasons. I am very anal when it comes to maintenance on the machines, so they do stay in pretty good shape. One other thing is that I have a great dealer that I buy EVERYTHING from, they usually will fix my machines while I wait. That is a big plus.
    I guess it boils down to how mechanical you are, and how much time you have. As the other guys stated, downtime gets expensive.

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