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| I didn’t read all of the answers but what I’ve observed is that most of the new combines are being bought at multiple discounts, which is significant. For the operator used to pricing out single pieces it seems like a drastic depreciation for a year or two of use but it isn’t that bad when a person factors in the price paid in the multi discount.
On top of the multi discount, which comes from the parent company not the dealer, the dealer will often be willing to accept a smaller profit per unit on the deal also because they know they will be able to get the multi discount farmers to flip to new combines again in a year or two and that will get some slightly used combines on their lots that they can then sell to single unit buyers for a good price.
This concept was explained to me a few years ago by a salesman. These figures are just to give the idea, they are not intended to be accurate.
Single unit buyer: combine purchase for $1000000
Multi unit buyer: combine purchase for $850000
Assuming the same number of hours per unit after one year of use.
The price required to offer for the one year old trade to give both farmers the same cost per hour:
Single unit buyer: $900000
Multi unit buyer: $750000
Both of those identical combines are now sitting on their lot but the dealer has $900000 invested in one and only $750000 invested in the other.
It is very much in the best interest of the dealer to offer very good deals to the multi discount buyers in order to have a supply of good used combines to sell to the non multi discount farmers. It also makes good slightly used combines available for a much cheaper price for the single unit buyers.
That also has the effect of making the depreciation of the combines for a single unit purchaser extremely high because the dealer obviously can’t have identical combines sitting on the lot and ask $900000 for one and $750000 for the other. The single unit purchaser can’t flip combines at anywhere near the same cost per hour as the multi unit guys.
This isn’t exactly what the OP was talking about but I just figured I’d mention it as I know I had never thought of the multi unit discount from the dealers perspective before.
Edited by havin’funfarming 9/11/2024 14:39
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Class 10+ Combine Depreciation. Specifically X9 and new AF11
