Machinery Pete:

Agriculture.com Staff 05/04/2006 @ 8:29am

One big reason why used equipment values are going up?

Because the price of new equipment isn't getting any cheaper. Last week I wrote a note on our Web site's homepage noting how we've seen some very high auction sale prices of late on Deere 8320 tractors. The sale prices were so high it prompted me to look back at our sale price data from a couple years ago. Here's what I found.

$110,500: 2003 model, 575 hours, excellent, sold 4/18/06 in northwest KS $91,000: 2002 model, 1227 hours, good, sold 3/1/06 in northeast NE

$91,000: 2002 model, 650 hours, good, sold 12/5/03 in south-central MN $102,000: 2002 model, 696 hours, good, sold 3/26/04 in northeast SD $97,000: 2003 model, 400 hours, good, sold 8/17/04 in west-central NE $103,000: 2003 model, 620 hours, excellent, sold 3/13/04 in northwest MO $105,000: 2003 model, 183 hours, excellent, sold 8/20/04 in southeast IA

So basically, we're seeing three and four-year-old Deere 8320 tractors sell at auction now for the same type money (if not more) than they were selling for at auction two and three years ago when the tractors were only one to two years old.

Interesting.

One of our subscribers saw my note and dropped me an email. He said how he thought the biggest reason for very strong used equipment values (higher auction sale prices) was the increasing cost of new equipment. I've touched on the theme often over the years. The rising cost of new applies a sort of suction to used equipment values, pulling them up along with the rising new equipment costs.

Over the years, I've found there are levels to the used market. Price levels I'm talking about. A certain percentage of the buyers in the market will look to buy equipment a couple years old, like the 8320s listed above. Another segment of buyers will judge that price range out of reach and move back to an earlier model series. And so on down until you're out into used equipment 20, 30 years old and older.

Ok, let's have some fun and compare what slightly older model tractors in this same 200 horsepower range have been selling for. Below are links to various older makes & models.

One big reason why used equipment values are going up?

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