Trade-in
Consideration Is now the time to replace your machinery?
The decision to trade equipment can be made for several reasons. Sometimes it’s advantageous to trade when machinery is out of warranty, other times trading may be necessary to keep current with technology or avoid costly breakdowns. While each of these reasons are justifiable, supply chain disruptions, rising equipment prices and strong demand for used equipment have complicated producers' replacement decisions and trade-in activity in recent months. “Limited equipment availability has turned trading into a fine balancing act,” says Alex Bauer, an AgDirect territory manager in Nebraska. “Some producers are waiting on orders they placed last year and without a serial number it can be a challenge to line up financing.” “On the used equipment side, prices are up across all brands and by the time of trade-in,
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a used machine might have an extra 300 to 500 hours on it,” he adds. With so many variables at play, equipment trade-ins have become a moving target. Factor in rising interest rates and it’s no surprise why producers who typically follow a 1-to-3-year trade cycle may consider holding onto their machinery for another 12 to 24 months. “What used to be a three-to-six-month process for lining up a new equipment purchase now can take up to 12 to 18 months making it tough to lock in rates,” says Bauer. “However, we’ve been in a relatively low-rate environment for some time, and even though rates have started to creep back up we are still seeing competitive fixed and variable options.”
