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Improving Your Farm Equipment Trade in Value

Jul. 3 2019 News By Redline Equipment

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Ok, you’ve finally been able to get into the fields and after a few passes, what you have spent long hours thinking about has become a reality… it’s time to trade in your equipment. So how do you get the most for your farm equipment trade?

According to Machinery Pete, the used equipment market is RED HOT! (1) So how do you capitalize on the need for used farm equipment to get the most out of trade-in values?

There has been a surge in used equipment sales and trades in recent weeks; most likely due to the weather delays that prevented earlier purchases. Are you ready to trade in your equipment for newer models? And how do you make sure you are getting the most from your trade-in?

First, it’s like selling a used vehicle, make sure your equipment is serviced, clean and presents well. Whether you are selling equipment on your own, at auction or trading to a dealer, presentation is critical to its perceived value.

Second, don’t be shy about sharing your personal story of how the equipment has been used and its background. Here are a few tips to help you prepare the equipment’s “Value History”:

  1. What’s the history of the equipment; multiple owners; bought from dealer; bought at auction, etc.? The history plays an important element in determining the value.
  2. Was the equipment well cared for; do you have a maintenance record for the equipment? If you take good care of your equipment, it should reward you in higher trade in value.
  3. Did you value what the equipment brought to your operations; did it meet or exceed your expectations? Helps to supports why you are trading in the equipment.
  4. Why are you interested in selling or trading in the equipment; are you interested in ‘trading up’? Be transparent - if there's a problem, tell the dealer; they will appreciate your honesty.

“Often times, we see trade-ins that clearly ‘need work,’ said Jeff Rutledge, Equipment Operations Director for Redline Equipment. “To get the most from your trade-in, show us that the equipment has been well cared for and maintained, or let us know what it needs.”

Third, do your homework. Know the value of your equipment and what the market value is. There are a number of sites that will give you some preliminary numbers to help provide you with trade-in values:  Agriculture.com/whatsitworth or IronAppraiser.com.(2) 

But the best indicator of trade-in value is the equipment’s auction value. What people are actually paying for the equipment in real time in a specific geographical area. The value is only as high as what people are willing to pay. You can also do a search on a number of the online equipment auction sites: MachineryPete.com, and AuctionTime.com are a couple examples.

Dealerships make their money with quick-turnaround trade-ins. This means that your trade-in is ready to sell, which equates to higher trade-in value. The trade-in value of your equipment depends largely on supply and demand.

“If a dealer has four of the same type of tillage tool and the equipment has been sitting on the lot for 10 months, it’s clear that there isn’t a big demand for that piece of equipment in that geographical area, therefore its less likely you will be offered top value…it’s all about supply and demand,” added Rutledge.

And Fourth, work with a dealership that you know and trust! If you find a trusted dealer, you are more than halfway to finding an effective solution that will serve you well into the future. Below are a few key points to choosing a dealer:

  • Are they trustworthy with a good reputation for fair dealings?
  • Is the dealership known for superior customer service?
  • Does the dealership represent a trusted brand?
  • Choose a dealer who has a reputable service and parts departments. They generally present a valuation based on their ability to service the equipment before selling.
  • Never underestimate the value of a local dealer that offers a trusted equipment brand and can help solve a problem quickly… or reach you in the field to get you back up and running.
  • Choose a dealer that is knowledgeable and willing to share their knowledge with you.
  • They should understand farming, farmers and the agriculture industry. Afterall, they should be your best advocate.
  • Does the dealer have multiple locations? The more locations, the more opportunities they have to resell trade-ins.
  • Do they have a connection to the community, and do they support youth and farming programs? Do they share the same values?
  • And do they value loyalty? Not only in ‘loyalty programs’ but in creating supportive relationships in business and in the community.

Remember, the dealer doesn’t make any money until the trade is sold, so you need to understand the difference between wholesale (trade-in) pricing and the price they can get for your equipment (retail) and how quickly they can turn that inventory. (4)

Buying and selling equipment can take a lot of time and effort but working with a dealer who can help you work through the process is definitely worth considering. The equipment dealer is the customer’s best resource to ensure he or she gets the right machine and support for that machine and the highest trade-in value for your piece of equipment. Choose wisely!

Sources:

  1. Machinery Pete: Values Double In 15 Years. AgWeb, Machinery Pete, March 4, 2019
  2. Buying and Selling Used Farm Equipment; What’s it Worth? Successful Farming, May 17, 2019
  3. Can the Past Predict the Future on Equipment Values? Iron Solutions, April 8, 2019
  4. Jeff Rutledge, Equipment Operations Director, Redline Equipment