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Saronville NE | Heres a consideration, we looked at this fall and didnt do.
Buy a used 8300 vs leasing a 7230R the 8300 would be a 6k hour tractor, vs a new tractor with full warranty.
$73k tractor, $14600 down, then $13k a yr payment for next 5 years, o so figuring 500 a hrs a yr usage or 2500 hours, so have a 8500 hr tractor when done and end value of $50k so yur total outlay of cash over the 5 years counting $10k worth of repairs over the 5 years, the depreciation of the $23k over the 5 years, your total cost out of pocket over 5 years for that tractor is $112600, but you would have a $50k asset at end of 5 years, so total cost is $62600. So $25.04 an hour to operate.
Now new 7230R, 5 year lease with the purchased ext warranty, so no repairs in the 5 years of the lease, no downpayment, 1st payment is start of lease, $15070 a year payment, or $75350 of payments over the life of the lease. Assuming no equity at end of lease. So 2500 hours or $30.14 an hour to operate.
Now in this scenerio you were farther ahead to buy the older tractor from the standpoint of total cost. Cashflow standpoint, the lease is still cheaper, you outlayed $37100 less money over the 5 years, that you could invest somewhere else with something that may make you money vs another piece of equipment that doesnt. So I still think it depends on your finical position.
Also I beleive $10k over the life of a 6k-8500 hr tractor is cheap when putting 500 hrs a yr on, I truly think it would be closer to $15k-20k. I figure $5k a yr per tractor, we dont always hit that every year, but when done over a avg, wont get that far from it.
You also got to write off the $15070 a year or the $75350, vs writing off the $73k in one year and the $1320 of intrest a year or $6600 and the $23k of depreciation, so $29600 over the 5 years or $5920 a year. But remember you are comparing a 13 yr old tractor worth $73k vs a brand new one valued at $173600. If ran the numbers both being new, be MAJOR difference from cashflow standpoint.
So in this scenerio you would be right, but last few years you would have equity in the lease cause the late model tractors havent been depreciating, they have been appreciating. Know of a situation of a lease tractor going back presently that there new one is bigger then the one they are replacing and the payments are cheaper on the new one then the old one cause they have some much equity in the old one, actually cheap nuff, its like one year free on the payments. Repairs really add anymore, his theroy is keep it under warranty and know your true cost.
So will give it to you in this scenerio, but not all have worked out this way, thats why you cant truly throw then out of your toolbox, sometimes they work to your advantage. Gotta weigh all the options. | |
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Leasing question
