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| Just curious. Throw your own version of the situation in. I've read it many times over the years online about the division of thoughts on making the repairs even though they cost near what the current value is, vs. junking it and so called "upgrading". I'm not asking for advice as I will do what I wish anyway, but am curious to learn more of the thought process for making your decision to go either way. In other words, do you focus on the current value of the piece you have, or do you look at the replacement cost and risk? What is it that makes you decide one way or the other as the piece you are familiar with is broken or in need of the expensive maintenance? |
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Sac & Story county IA | There are a lot of things in the world that if someone wanted to give it to you, you need to turn around and run. Really worth less than nothing. From switch engines to concrete elevators with cracks. |
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East Central, Nebraska | we have pretty much tried to operate by that exact lesson. if it costs as much as its worth to fix it, then buy another one for that price and you will have one with plenty of parts and one that works. |
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central - east central Minnesota - | Old Pokey - 11/23/2012 08:53 Just curious. Throw your own version of the situation in. I've read it many times over the years online about the division of thoughts on making the repairs even though they cost near what the current value is, vs. junking it and so called "upgrading". I'm not asking for advice as I will do what I wish anyway, but am curious to learn more of the thought process for making your decision to go either way. In other words, do you focus on the current value of the piece you have, or do you look at the replacement cost and risk? What is it that makes you decide one way or the other as the piece you are familiar with is broken or in need of the expensive maintenance?
I run older equipment . . . I tend to repair, even though the repair (s) may cost more the the current value of the piece . . .
I consider new replacement cost against the repairs . . . . it's pretty easy to stick a bunch of money into repairing, when I see the cost of new.
750 grian drill is good example - the differences between what it does and the new 1590 does? I can stick a lot'ta money in the 750 for repairs to last the rest of my lifetime farming . . . . . . It'll be just as reliable.
Recently rebladed and bearing'd a offset disk - cost as much as I payed for the disk . . . now it has the same value of those listed on tractor house, used like it. But compared to new - way, way cheaper to repair. Does the same job as new and is just as reliable . . .
Edited by iseedit 11/23/2012 10:07
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North West IA/western AZ | If the old one does what I want, I fix it. However if the new one has some upgrades I've been wishing for I tend to upgrade. I'm in the category of farmer who will retire in the next 10 yrs. and also like to keep equipment current. |
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Macon, IL | I have a couple pieces that I have eclipsed the cost of machine in repairs. For example 12-row 7000 planter. Bougt it for 12k, put 12k in it. But I have used it for 5 years, in top notch condition-still worth about 12k. Massey 255 I paid 6k for, have 6k in repairs over 10 years-but it is in top condition as well (as well as a massey can be)-and worth what I paid for it. So I figure over the life of both of those machines my cost per hour or per acre is dirt cheap-and I have two that are perfect and ready to go to field tomorrow.
Other thing is comfort in "knowing what you have"-I mostly buy 10-20 year old equipment-always nervous that first year or two there is some hidden bomb...and have found some. Go buy another piece of half worn out iron and I think you are more likely to end up with a big repari bill than fixing the one wrong thing on what you know is good. |
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Iowa | I don't think there is a thing wrong with repairing something even if the repairs exceed it's market value, but you must realize that on vehicles you are gambling you won't have a serious wreck that "totals" it out--you're gonna get book value plus MAYBE a LITTLE bit more--but that's not a bad gamble. Most people probably have 20 vehicles or more in their lifetime and maybe "total" 1. I take that risk every day, anyway, if the accident is my fault, because I don't buy collision insurance, only liability.
I had a chore tractor that needed $7500 of repairs (engine and transmission done here at home). I could buy another one for about that--but it would also have a lot of hours on it and might fail in the same manner the day after I bought it. So I repaired it and used it trouble-free for ten more years.
At least if I fix my old one, I know what I've got, and its WAY cheaper than upgrading to something new or new enough to be fairly trouble-free with some degree of certainty. The "current" or "market" value enters into my decision only as a passing thought--the real question I ask is, "Is it worth it to me to do this repair? Will the repaired machine do what I need and will that be more cost-effective than buying something else?"
I don't want a "spare" setting around junking up the place. I'd rather be proud of my farmstead even if it means buying a few extra parts once in a while. |
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NCent. IN | I tend to fix until I need something bigger or I need a feature that I can't get by upgrading. As others have said it cost less than new and I know what I've got.
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| It seems like we are being faced with this question more all the time. Heck, tires on some older units can be the value of the machine. As long as the machine is capable of doing the job we need to do, and is otherwise usable condition, we pretty much always repair. Once again, depending on the unit(are we talking a cordless drill or a combine) the cost of doing a repair worth the value of an older unit may not make the down payment on a newer unit the way prices are going. You can still keep cost per hour pretty low. |
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Western Oregon | Depends if you are a "bottom feeder" or modern top-notch clever farmer... Obviously, if you go by book value it is a different story. If the yearly repair costs approach the money you would pay to finance the purchase of a new machine then why would you pay to use something that is losing value and costing money every year.
My Great Plains drill needs bearings and disks after five years of use. If I continue to plant 2,000 acres a year should I not just buy a new drill and let someone else do the five year repairs?
The Minneapolis-Moline G1355 needs an engine overhaul. We were rather foolish and went about it piecemeal instead of really setting down and penciling out how much it was going to cost. We figured at the max $4,000 and we do the work. This was more than half the value of the tractor but we really like the tractor. In the end it is more like $6,000 and it is not together yet. So that was a bad decision. I should have bought the White 2-110 that was on Craigslist for $9,000 even though I thought it was over priced.
My 2-155 FWA with 8,000 hrs needs front end bushings and $6,000 worth of new tires. Do I fix it or scrap it? I just put a new stereo in it!
Your old swather needs $1,000 worth of tires but it is only worth $900 but then again we only use it for three weeks out of the year and it has all new adjustable guards, but then it is pretty dang slow, but then it would cost a lot to really upgrade and....
So, the point is, unless you are a cold-blooded business manager with an excel spreadsheet you can go through a lot of head scratching... |
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David Loberg Northeast Nebraska | One of the most difficult decisions anymore. After we ended up with a Kenworth worth 25000 with 50000 of repairs over several years, and still bleeding we've become a lot more evaluative on situations. If we plan on running the machine for a while yet and can get some of the repair value back out we will usually fix. If it is a piece we roll on a normal basis, we'll generally take the hit on the trade in or salvage it and cut our losses
Edited by dalobe01 11/23/2012 11:50
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Central Iowa | one thing that is being factored into repairs on items with engines, is the inconvenience of the newer emissions equipment. I see HUGE repair costs in the future for that stuff, especially while they are working the bugs out of it. If it costs me a little more to run stuff that I might be able to repair myself, it still seems like a better situation to me. When electronic stuff goes haywire it tends to get expensive and complicated very fast. The planter/disk/graincart/whatever don't notice how modern the tractor is. If my old Versatile will still pull it with a drawbar pin I am good to go. The autosteer and monitors can be added to whatever tractor with pretty good results, and I know what I have. |
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southern MN | I'm not in a position to buy new. And I don't think I'll be expanding much the rest of my career.
I'd rather fix up what I have and familar with and know the history of by now, than to junk it and buy the next set of used problems.
All within reason, of course, it still needs to make sense.
But to me it's generally sensable to put the full value into something to fix it up over junking it out.
--->Paul |
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Whiskey, Tango, Foxtrot | But I will probably be in Hillsboro today or tomorrow. I'd buy you lunch if you have time. Email is good in my profile, couldn't find one for you. Thanks. |
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northwest ohio | I think alot depends on if you can you can do the work yourself or you have to take to a shop. Also depends on what is worn out. Many small to medium farmers( doesn't have anything to do with a bottom feeder or up to date BTO want to be) can have nice equipment fixing routine wear items and a little maintenance like greasing daily, not at the start of the season and again at the end. JMO |
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E.Central MN | The first question you need to ask is are you going to use it or sell it? Unless it is a minor repair or the machine is very new I seldom see people get their big repair money back out of a machine at an auction. If you know you will use the machine for enough hours(assuming everything else is solid) then investing the money in repairs can be a sensible idea if a good replacement machine won't cash flow as well. High houred equipment can be a bigger crap shoot when doing repairs, who knows if something else will need expensive repairs the next day after you stuck a lot of money into fixing it. |
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Malheur County Oregon | Ben, are you still on the ag-talk meet and greet tour? lol Thanks for lunch the other day I enjoyed the visit and it was nice to meet up with you |
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Whiskey, Tango, Foxtrot | Now I'm on the Western leg. Been as far east as you can get in Oregon, now we will see the Western or wet half of the state. Already did the coast, now trying to wander home. |
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| I have a bill from a 1086 TA clutch/flywheel sitting here next to my desk. 2007 was $10,720.08. Paid $10,500 for the tractor 6-years prior. I keep it here just in case I ever think about buying anything with a TA in it again. |
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| HA HA Made me laugh. But very true. |
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Central ND | For some reason this post reminds me of shopping for sledge hammer handles. You can buy new sledge hammer with fiberglass handle cheaper than the replacement wood handle is for my old beat up sledge hammer .Same goes for pitch fork handles....... a new complete pitchfork costs less than a replacement handle without the fork. Problem is......... I like the old fork bottom better than the el-cheap built new one.
The same applies for machinery buying. sometimes the math in the end or all the repair bills is eye opening..... |
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| I'll have to catch ya next time Ben. But thanks. irafarmar2 (at) hotmail (dot) com |
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S.C. Wisconsin | On our farm it always boils down to what it's going to cost to get the job done in a timely manner. The value of the equipment isn't a big factor on a decision whether to fix it or not. But on the other hand if the machine was a second rate machine when it was new, maybe it's a good time to dump it. |
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Saronville NE | I usually try and trade when the repair bill is going to be bigger then the piece is worth. But kinda in that dilema right now on a tractor, got a tractor that needs about$25k worth of work to get it right (thats in town, not something Im going to tackle) but its got good rubber, does what I want it to do, so do I spend $25k on a tractor worth $25k, but nothing else has been opend up on or do I take the $25k in trade in value, plus the $25 Id stick into it and have $50k to put to something, but yet to buy something with lower hours, would cost me another $30k on top, IDK what to do, I just truly dont want another payment, already got a big tractor payment and cant afford another one, but also easier to make a $10k payment vs paying a $25k repair bill at one time also. It really sucks that things are getting this outa hand anymore and just gonna get worse, with repair bills and cost of upgrading. |
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Ontario's West Coast , Huron County | If you spend 25 on atractor that is only worth 25 it does not make it worth 50 . It is still only worth 25 . |
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Iowa | I rebuild what I have that way I know what I got when done. |
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Saronville NE | I never said it would be worth $50k, I said Id have $50k in it or could take that $50k to put towards another, heck no, Id be lucky to get $30k outa it after spending another $25k. |
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Whiskey, Tango, Foxtrot | Everything seems short notice these days with me anyway. I am planning on another W valley trip later this winter, maybe then. |
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Manila, Ar | I know guys that trade yrly and guys that repair yrly...........i prefer the first group but i'm in the second group........:( I think it is more of a mindset than math........:) |
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| I guess I am going to be the broken record again. Analyzing several different scenerios with the net present value method is (in my opinion) the best tool to determine you true cost in repairing/swapping/upgrading equipment. Download the spreadsheet and play around with it a little using your numbers.
Also, I invite anyone else to enter their own numbers and repost them. Maybe we can finally come to a conclusion who is the smarter farmer…those who trade every year, or those who repair their own equipment.
Mav
Attachments
----------------
 Partial Cost Analysis.xls (32KB - 173 downloads)
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Kansas | 1586,
Know the feeling, LOL! On mine they didn't find the busted pinion gear in the rear end until after the TA was already scattered all over the shop :(
Edited by tornado2 11/24/2012 01:41
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| Cant read the spreadsheet as I do not have works. But it will be impossible to know who is the "smarter" farmer. |
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Western Oregon | Try Open Office, it is free. It works reasonably well.
I just don't understand spread sheets. I keep all my records on the dash of my pickup which puts me on a different accounting schedule. My new year starts in May when I first open the windows (if there is actually some warm weather)
Out with the old and time to start accumulating the new. |
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Texas/New Mexico Stateline | I have not read all the responses but here is how I have been doing it
+ how normally dependable the machine is
+ how likely dependable will it continue to be after it is fixed
+ how much I like the machine overall and sentimental attachment
+ how well it fits it's duties
+ paid for machine
+ efficient
- how bad the repair bill
- how often it gives trouble and leaves us in a bind
- other expected repairs needed in the future (tires, overhaul, etc)
- how much I dislike using it or uncomfortable
- how much to replace it altogether
- how much I hate spending money
- never did the job like I thought it should
- ugly and gives a bad impression (yes it matters to me, so be it)
- inefficient
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Repairs that cost as much as the value of the piece?
