New mowers every 2 years

Discussion in 'Business Operations' started by SLC4U, Nov 8, 2008.

  1. SLC4U

    SLC4U LawnSite Member
    Messages: 3

    Just wondering, but some guys in the businesses in this area turn their mowers over every 2 years. Is their a tax advantage, warranty issue, or some other reason people do this. As long as it is under 10K can you not just depreciate it in the first year anyway.
  2. mattfromNY

    mattfromNY LawnSite Bronze Member
    Male, from Central NY
    Messages: 1,582

    Most guys around here turn them over just before the two year warranty expires. This works well for the LCO, as well as the dealer, b/c the dealer can repair most things under warranty and still sell it with remaining warranty.
    I would imagine it helps with write-off as well.
  3. procut

    procut LawnSite Bronze Member
    Messages: 1,852

    Most units have two year warranty, so that would be my best guess. I'd say a good commercial mower should last four years if maintained well, even under heavy use.
  4. SLC4U

    SLC4U LawnSite Member
    Messages: 3

    Thanks for the input, I thought it relied mostly on the warranty. I will talk with my dealer and see what kind of incentive he can give me to start a program like that. Then see what the tax benefits are when trading up like that.
    Here are some rough figures but let me know what you think. 60" exmark rider cost $10500, and divide it by 2400hrs expected like over 4 years. It comes out to $4.33 per hour of use. Take that same $10500 and put 1200hrs on it in 2 years and trade it in for $6500 est. The $4000 loss would make it $3.33 per hour of use. Plus all of your repairs are under warranty. If you take care of equip. it makes sense to look into replacing every 2 years.

    DLAWNS LawnSite Fanatic
    Messages: 5,780

    I guess that I'm wrong but I thought they only did that for big companies like Brickman, I know they have a deal like that.
  6. sgl41377

    sgl41377 LawnSite Member
    Messages: 191

    Why not take that mower and sell it on your own on Craigslist? Then go buy your new equipment. What I have found out is smaller companies tend to buy equipment from bigger companies when they upgrade or buy new.
  7. P.Services

    P.Services LawnSite Fanatic
    Messages: 6,319

    you arnt going to get 6500 for a 2 year old mower with 1200 hrs on it. if you got 4k then i think you would be doing good. i bought a scag turf tiger with 100hrs on it used for 7,000, so that number id far out to me.

    i agree with your idea and i to have been thinking alot about turning mowers over. im also thinking about running them for 4 years and then doing a complete overhaul of everything that wears out. new engine, pumps, wheel motors, spindles, seat, everything . put a new coat of paint on and new decals and run them for another 4 years. im looking into see what it would run for parts. this would also give your guys some thing to do during the winter months, and give them a new appreciation for the equipment.
  8. newtostone

    newtostone LawnSite Senior Member
    from NY
    Messages: 681

    I am thinking about the rebuilding every few years as well. The thing is the first couple years take a major hit on value, but from 7 years to 10 years the value wont change. Another point of doing a rebuild yourself is you know the mowers well. Anything that would be downtime to some is just a quick fix. And great to keep guys working in between storms. Its just really how you want to run your business. Is it worth a headache every now and then for a some $ or not? Its the owners decision.
  9. retrodog

    retrodog LawnSite Silver Member
    Messages: 2,429

    We have a big lco here that buys atleast 6 diesel mowers every 2 years, but he sells the old ones himself. If he traded in 6 diesel mowers on 6 new ones with 1500 hours or so, he would lose to much money to make it work. When it comes around to time to swap out, he already has waiting lists for his mowers to sell. You take your average big diesel....say Ferris. You pay $16000 each for them, 2 years and 1500 hours, you will be lucky to get $7000each, your dealer might give you $4500 if your lucky on trade in. If he just traded in, he would lose another $15000 to his bottom line on prolly the best scenario possible.
  10. TLS

    TLS LawnSite Fanatic
    Messages: 7,943

    You really have to price your used ZTR's at what the market can bear. Large acreage homeowners are your target buyer. You may get the occasional young/new LCO just starting out, but normally it's your homeowner. When people have cash they'll spend it. If they have to get a loan to pay for your used mower, it's a tougher sell.

    Saying that, I've been very successful at selling my 4-5 year old mowers at about 1/2 the original purchase price. The most I put on a mower is 400hrs/year, so someone is usually getting a 1500-2000hr machine for $4-5K. My machines are always the highest horsepower/inch cut, are maintained in tip top condition, garage kept, and owner operated. I was never offered anything close to these prices on trade. So the benefits of the tax reduction considered, I'm still ahead of the game selling outright.

    As far as totally rebuilding after 4 years and going another 4 years....

    Have your priced pump and motors? Parts alone...$2K


    Spindle assemblies...$300

    Spindle pulleys...$100

    4 new tires...$300

    PTO Clutch $250

    Idler assemblies...$200

    These are just a few off the top of my head, and are just the price of the parts alone (min ~ $5200). You said you'd be doing the you work for free?

    So you take that $5200, thats about 1/2 of the cost of new. I would never put that much into a machine. Sell it for $4-5K and invest in a new one. You'll have the newest technology, and a new 2 year warranty.

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