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  #1  
Old 08-07-2007, 10:29 AM
bczoom
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Default Used tractor valuation tool

I came up with an algorithm that seems to come out pretty close for me and a few others that have tried it. I've only tried it on CUTs. No idea if it works on large or lawn tractors.

The attached spreadsheet has this algorithm.

Basically, you plug in the fields in green:
Original cost
# of hours
Life expectancy
Age
Initial depreciation percent. This is subjective, based on brand recognition, perceived quality...
What's the anticipated wear and tear cost per hour. This is tires and such and I've found that about $2/hour is normal.

Take a look and let me know if you think it's close. If not, tell me the holes.
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Old 08-07-2007, 10:30 AM
bczoom
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Hey Doc,

Can you make it so I can attach a .XLS?
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Old 08-07-2007, 10:32 AM
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Okay Brian, give it a try.
I set this one to show up as a thumb also. I want to see if that option works for a xls attachment.
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Old 08-07-2007, 10:52 AM
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Here's the spreadsheet.
Attached Files
File Type: xls tractor market valuation tool.xls (17.0 KB, 162 views)
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Old 08-07-2007, 10:54 AM
bczoom
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Thanks Doc.

No thumbnail. The columns don't show right but here's what it kind of looks like (with example variables entered)


Market Value Variables:
Enter new product purchase price 15000
Enter number of years old 9
Enter total hours accrued 570
Enter Tractor's life expectancy (in Hrs) 3500
Enter initial depreciation factor(in %) 5%
Enter wear & tear Cost per hour 2
Annual Depreciation 300
"Hourly Cost (new product price
per expected hours)" 4.285714286

CURRENT MARKET VALUE CALCULATION
Purchase Price $15,000
Less: Depreciation $3,450
Less: Total cost for actual hours $2,443
Less: Wear and Tear $1,140
Approximate Market Value after 570 hours $7,967
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Old 08-07-2007, 01:17 PM
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It seemed 'reasonable' for the value of my 2002 Kubota 3010 w/ 275 hours on it. Of course this does not take any ad ons or implements into consideration. We all know they can increase your purchase price by 5 or 10k if you get a FEL & backhoe along with a Rotary cutter, finish mower and box blade. All necessary evils with your tractor.
(I have them all except for the hoe! ) someday .......

I have to admit I like the price better if I was the buyer. As the seller I would try to get a 'little' more than the value the spreadsheet showed.
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Old 08-07-2007, 01:54 PM
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Quote:
Originally Posted by Doc View Post
It seemed 'reasonable' for the value of my 2002 Kubota 3010 w/ 275 hours on it. Of course this does not take any ad ons or implements into consideration. We all know they can increase your purchase price by 5 or 10k if you get a FEL & backhoe along with a Rotary cutter, finish mower and box blade. All necessary evils with your tractor.
(I have them all except for the hoe! ) someday .......

I have to admit I like the price better if I was the buyer. As the seller I would try to get a 'little' more than the value the spreadsheet showed.
You're correct about add-ons and implements. I haven't tried it but what happens when you include all of them in the initial tractor price? I tried to keep it as being just the tractor since there's so many variables about implements.

Other factors come into play as well. "Wear and tear cost per hour" varies greatly by owner and tasks. My tractor spends most of its time doing either grading or FEL work so it's taking some abuse. I put $2/hour for wear and tear which accounts for me doing repairs, including most cosmetic things (like holes in the grill) to keep it in good contition. If you're doing things like mowing or are more careful than me, put that at $1 or so. Doc - Have you put $275 in repairs into your tractor? (I'm not counting oil, filters or other scheduled maintenance items).
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Old 08-07-2007, 02:25 PM
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Quote:
Originally Posted by bczoom View Post
Doc - Have you put $275 in repairs into your tractor? (I'm not counting oil, filters or other scheduled maintenance items).
Nope. I hate to type this, cause it can cause bad karma etc ....
but I have not spent one cent on repair so far.
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Old 08-07-2007, 03:38 PM
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Seems to work for my tractor too, just changes $ to .

Doesn't work for lawnmowers though, put in the details and according to it I need to pay whoever 'buys' it $5k to take it away
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