Mailbag: Ask Machinery Pete
Four questions I was asked this past week:
1. "Pete, can you help me? I've got a 1986 model CaseIH 2096 2WD tractor with 2,115 hours I'm looking to sell. Is it worth $25,000? - Terry, southwest Minnesota.
Terry, I'm happy to report I think your 2096 is definitely worth in the $25,000 range. Terry was a bit discouraged when he called as he had run a couple local classified paper ads and only got a few nibbles. Those nibbling didn't seem to want to go much above $20,000.
This is a classic case of needing to stick to your guns. Terry's gut instinct was correct. What I told him was in my experience, how very rare it is to find 20+ year old tractors with under 2,500 hours. So his 2096 with only 2,115 hours should be very valuable and much in demand.
To prove my point, I highlighted a pair of 2096s I had seen sold on auction. One was a 1986 model (same as Terry's) with 4,388 hours, sold just last month (September 13, 2008) on a sale in southeast Minnesota. It was in good condition and sold for $20,000.
Now you can see why I think Terry's 2096, with less than half as many hours, should be worth $25,000.
The other 2096 I mentioned to Terry was the 1989 model 2096 with 5,420 hours sold June 27, 2007, in south-central North Dakota for $20,500. That auction took place 16 months ago. I'd estimate used tractor values have gone up easily 15% since then. So again, Terry's 2096 should definitely be worth at least $25,000.
I told Terry to keep the faith and to consider adjusting his advertising plan a bit. September and October tend to be slow months in terms of buying/selling equipment with harvest dominating most folks time and attention. MidNovember to early January for the last three years have seen a noticeable uptick in buyer interest. Terry should bring back his classified ads at this point and consider running his ads beyond his location (southwest Minnesota). A Case IH 2096 tractor with only 2,115 hours would be of interest to buyers in Illinois, Kansas, Ohio, Montana. . . I could keep going.
Lastly, I suggested Terry get his tractor listed for sale on the Internet, in classified sites like those offered at http://www.agriculture.com/ag/classifieds.
2. "Pete, I'm looking to trade my older high tin JD 643 corn head in on a newer 693 six-row head. What's a fair trade in value for my 643? - Phil.
Phil, great question. Whenever you're looking to buy, sell, or trade any piece of equipment, you need to start at the beginning and determine what each piece of equipment is currently worth. Notice I said, currently. If you've been following my column in print or online throughout 2008, you know how I've been documenting that used farm equipment values have jumped 10 to 20% higher.