When deciding between buying a new or used tractor, consider the depreciation of new tractors, tax breaks, and how the tractor will be used. Reconditioned and restored tractors from reputable brands can also be a good option.
Buying farm equipment is often a major investment. For this reason, you want to get the best return for your cost. When it comes to tractors, there are many reasons to consider buying a well-maintained used tractor rather than a new one. At the same time, a new tractor may be in your interest. Here are some considerations to help you decide which option is right for you.
One of the first points to consider is the reality of the depreciation of new tractors. As with cars and trucks, the new tractor will start to decrease in value the moment it is delivered to your farm. While this may not be a big deal if you only plan to keep the tractor for a short time, it can be a big concern if you hope to recoup your investment by selling the equipment in about six months. If this is your goal, choose a good quality used tractor. You’ll get closer to recouping your investment and maybe doing a little more if you’ve made some improvements to the unit.
A big benefit of buying a new tractor is the tax breaks many countries allow on farm equipment. However, keep in mind that these tax benefits may only be available if farming is your primary vocation or at least makes up a significant amount of your total annual income. Before spending a lot of money on a new tractor, check the tax laws that apply in your area. If you are not eligible for significant tax deductions on new equipment, you would do well to purchase a good quality used tractor.
Understanding how the tractor will be used is another important consideration. Do you have a small garden, perhaps no more than five acres or so? If this is the case, there is relatively little wear on the equipment; a good used tractor will cost less and will do the same. On the other hand, if you’re a professional farmer with hundreds or thousands of acres to farm and harvest, you’ll want something built to last and fully functional. In this scenario, it might be advantageous to buy a new tractor that comes with a solid warranty and maintenance contract.
Luckily, you have another option to consider. You can buy reconditioned and restored tractors from reputable brands. Such industry giants as John Deere® and Farmall® are often good sources for both new and refurbished equipment. Check with local dealers for availability of refurbished units; they are often available at prices similar to used tractors, but have the added benefit of a limited warranty and perhaps even a limited service agreement.
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