Father knows best. Not this time.
I have to admit, I was taken aback.
"Do you really think auction prices are a good way to value equipment?" The question was lobbed at me by a young fella, high school aged I guessed, at a recent auction I attended in eastern Iowa.
Before I could answer, he went on to say his dad was always going on about how it only takes two guys to drive up the sale price of any piece of equipment at auction. I admired the young man for paying attention to what his father had to say. I think we all should listen closely to what our elders have to say.
But, I think his dad was off base on this one.
Sure, we've all seen the occasional piece of equipment sell for an amazingly high price at auction. Head scratchers. Usually a family attachment to the item up for sale or just a couple guys that don't want to leave the sale empty handed. Emotions get involved. An example that jumps to my mind was the 1976 IHC 1066 tractor with 460 hours on it that sold for $40,500 on an auction in southeast South Dakota back in October 1997.
I know, doesn't seem to make sense, but then does life always have to make sense? Just because one IHC 1066 tractor sold for a very, very high sale price, does that mean you should ignore the other (353) 1066s we've seen sell at auction over the last few years if you're trying to establish what IHC 1066 tractors are worth?
Of course not.
Let me provide an example. Let's say, just hypothetically, that you are in the market to buy a used mechanical front-wheel drive tractor in the 200 horsepower range. Let's narrow things down further. Suppose you're only interested in tractors with 3,500 hours or more, trying to save a few bucks compared to the real lower houred ones.
Now let's get even more specific. You've heard the rising price of corn, the high cost of steel and the scarcity of auctions this winter have driven used equipment values higher of late. So I present to you this data table, based on these criteria:
200 horsepower range
mechanical front-wheel drive
sold at auction since November 2006
Recent auction prices on 200 HP MFWD tractors with 3,500+ hours
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