If you are looking into buying equipment for your farm, often it can be confusing when choosing between used versus new farm equipment. You will have to take into account the different aspects of each, such as wear and tear, and costs. Below are some helpful hints as to how to decide between new and used farm equipment.
Keeping pace with technology
New equipment, such as the unique offerings from Radium, allows you to keep up with the pace of technology in farming equipment. New equipment will help your farm to perform at a higher level due to the more modern technology of the equipment.
The newer models will also come with the best warranty and customer-service plans. Having updated equipment for a working farm is important if you are going to keep ahead of the competition, and if you need to increase the output of your farm.
Used equipment holds its value
Despite the fact it has depreciated, used equipment can still hold its value if it has been cared for correctly. This means that you are able to purchase a piece of equipment that meets your needs at a lower price, while still being able to ask for a decent resale price.
Be sure to document all repairs and services if you buy used equipment and stick to a regular maintenance plan to uphold the value of the piece. If you are not looking to sell your used equipment, then the fact that it holds its value is even more important and useful for you. Depending on how often the equipment will be used, you can keep it in a ‘like new’ condition for years to come.
Buying new equipment ensures that the equipment meets all the safety standards and regulations set out by law, as it has been newly manufactured and has not been used yet. This means that aspects such as brakes, transmission and frames of the equipment are in pristine condition.
While used equipment is not necessarily unsafe, new equipment is guaranteed not to have any damage or have undergone any serious repairs before you buy it. This will not only put your mind at ease but it will also increase the amount of labour and weight your equipment can handle because no repairs or replacements of parts have taken place.
Used farm equipment will often be on offer for a lower price than new equipment, which is helpful to farmers who have a tight budget or who need to replace equipment in a hurry. A lower cost does not equate a lesser quality, but always be sure to thoroughly check the log books for all repairs and replacements.
Because you will be paying less for your equipment, you will be able to purchase the necessary attachments for it too, as well as use the remaining money to improve other aspects of your farmland. You may also be able to purchase more than one piece of equipment when opting to choose used due to the affordable price.
As with any new equipment, new farm equipment includes a dealer warranty. These warranties generally cover labour costs on claims, which will give you complete peace of mind should anything happen to your equipment.
You may find that the company you are buying from offers ‘extended warranties’ which cover parts and labour above and beyond the standard warranty. While this does come at a higher price, having this warranty will help a working farm which uses the equipment daily, as breakages and damages will be covered. Remember to always check for ‘owner obligations’, such as the cost of transporting the equipment to a workshop for repair.
Seasonal use is a factor
If you only use some of your equipment seasonally for planting and harvesting, then buying new is counterproductive to your earnings. An expensive tractor or harvester that will only be used once or twice a year may end up costing you more in the long run, whereas used equipment is more cost effective.
Instead of buying new equipment that will sit in a storage unit, waiting to be used during the right season, opt for used equipment that has been maintained well. You will pay less and will not feel as though your investment is going to waste by only being used once or twice a year. Seasonal equipment should not cost enough to be detrimental to your income.
Financing is easier
Acquiring finance from the bank or a financial institution for new equipment may be easier than for used equipment, especially if you are leasing rather than buying the equipment. The bank is more able to resell or lease out new equipment than used equipment.
If you have drawn up a proper plan, outlining why you need the equipment and how you are planning to use it, the bank is also more likely to approve your finance request. Some banks work hand-in-hand with equipment dealers and will thus prefer to finance new equipment that can be offered by these dealers rather than used equipment.
When considering whether to buy new or used equipment, you will need to ask yourself how often the equipment will be sued, what your plans are regarding reselling the equipment and if you need to update the technology on your equipment regularly. The pros and cons listed above should help with answering these questions, and outline which option is best for you.