• The franchised main dealer
• The independent trader
• The mainstream manufacturer
• Retain your residuals

See also: Bag a second-hand loader tractor

With exchange rates close to 1:1 two years ago, decent used tackle was easy to shift into western Europe, while stuff with a more questionable health record was easily shifted further east.

That meant dealers could offer decent prices for second-hand machines, making the eye-watering cost of new gear a much easier pill to swallow for farmers and contractors.

Adding in the euro factor

But the faltering fortunes of various EU member states have seen the euro weaken beyond expectations to the extent that the second-hand trade has almost dried up completely – used UK kit is just too expensive in the eyes of European buyers.

That, alongside poor commodity prices in both the livestock and arable sectors, has hit the machinery trade hard. Without deals done on second-hand kit, very little new gear is going off the forecourt.

But does this present an opportunity for machinery buyers? There are definitely deals to be had and traders are more likely than ever to shift stock at reasonable prices.

However it is not quite the bargain bonanza many might hope, as new equipment is still retailing at much the same money as before.

So what are your options?

Dale Burden, Burden Bros, John Deere, Kent

We’ve seen our trading business virtually flipped on its head,” explains Dale Burden from Kent John Deere dealer Burden Bros.

“Until last year we would have exported around 80% of our ex-hire and low-hour trade-ins. Now that figure is closer to 20%.

“With the euro dropping 22% in the past 12 months we’re struggling to offer good part-ex deals on the second-hand stuff. In turn that makes selling new kit difficult.”

To counter this and to try and prop up trade-in values, the business has set up a Quality Assured scheme.

Under this banner the company puts its used machines through a 74-point check that includes hydraulic fault-finding, an air-con test and regas as well as coupling the pto to a dyno to check the engine’s pumping out exactly what it should be.

Everything sold with the QA stamp of approval has a full service history, at least 30% tyres and a six-month/500-hour warranty.

“We knew we couldn’t do anything to influence the exchange rate and so we had to try and build on domestic sales.

“By going down the quality assured route we’re giving buyers confidence in what they’re purchasing. And it’s working – we’ve seen a definite pick-up in interest since launching the scheme.

“It’s probably easier for us because we’re selling Deere machines that are perceived to be premium products but that also means we’ve probably paid more for them in the first place and we can’t afford to let them go at a loss. 

Getting the right spec

©Nick Fone

With a fleet of more than 40 hire tractors, Mr Burden knows all too well the importance of machines having the right spec to maintain their second-hand values.

Anything over 150hp needs to have a 50kph gearbox in addition to cab and front-axle suspension and a steering valve that can be connected to auto-steering systems. Tractors without those key features are a struggle to sell and consequently suffer in the value stakes, he says.

On smaller tractors, it’s important they are ordered with a power-shuttle gearbox and an uprated hydraulic pump as many will end up having a loader grafted on when they move on to their new home.

The actual model chosen is also critical in maintaining residual values and on that front the company has made the decision to shell out more on premium-spec machines in an effort to limit depreciation.

“We only run top-spec R-series tractors on the hire fleet because they retain their value best. M-series models would probably suit the hirers better for the work they’re doing but we see more interest in higher-spec tractors in the second-hand market.

“It’s tyres that have the biggest impact on a machine’s second-hand value,” says Mr Burden.

When the hire tractors arrive fresh from the factory, most have their wheels whipped off and rowcrops fitted to suit the veg work they tend to do. When they are put up for sale after a season’s work they go back on their original rubber which makes a big difference to their asking price, especially when you consider it costs roughly £5,000 to reboot a mid-sized tractor.

Mark Hellier, second-hand specialist, Kent

Second-hand specialist Mark Hellier has felt the full force of the impact of the shift in currency, even trading in countries outside of the eurozone.

“We’ve always had strong links with the Scandinavian machinery trade but even that business has virtually dried up. Eighteen months ago we would have been sending two tractors into Finland every week. In the past 12 months we’ve sold just three,” he explains.

“That tells a story about the overall picture – two years ago 96% of our trade was export, now it’s closer to 40%.

“Obviously that’s massively impacted on our overall turnover but we’ve managed to find a few other outlets overseas. Parts of the US are crying out for European-spec tractors – they get very excited about things like axle and cab suspension, front linkage and pto.”

That shift in focus has seen the business move to much more of a mix of products. Previously Mr Hellier was seen as the go-to-guy for tractors – specifically decent Case IH CVXs and Deutz Fahrs.

Now implements make up a good share of the gear that goes out of the gates. But like tractors, they have to be cheap and low-houred.

Get a bargain but avoid selling cheaply

©Nick Fone

Mr Hellier sees an opportunity for farmers to pick up second-hand machines with less than 1,500 hours for a fraction of the price of new ones but says really low-houred kit can also be a hassle to shift if the price differential between new and used isn’t enough. At the other end of the spectrum, big-houred stuff just doesn’t find a home right now.

“People find it hard to accept that their second-hand kit is worth 40% less than it was a few years back but that’s the reality of the euro effect,” says Mr Hellier.

“If they want to preserve residual values then they need to think about it when they’re buying new. There are certain key specs that make all the difference.”

Transmission choice

The first item that has a big effect on a machine’s export potential is transmission choice. Many countries have a restriction on tractor speeds, so it’s critical machines are shown to be 40kph on their registration documents – otherwise they simply can’t be sold into those markets, instantly limiting their saleability.

He suggests ordering new tractors with 40kph Eco spec which, with a software tweak from the dealer or chip from a tuning specialist, can then be set to run at 50kph if required – it’s all in the paperwork.

For anything capable of doing these speeds, air-brakes and in-board discs in the front axle are a must. If you are buying, beware of a 50kph tractor; without these as it’s like to have leant heavily on its back-end anchors.

Suspension

Without front-axle springing tractors are close to unsaleable. Cab damping is less of a must but it all adds to the potential.

Front linkage will add £1,000 to the price while a pto tucked under the nose sticks a further £1,000 on the tab.

Power-beyond load-sensing hydraulics and Isobus implement controllers all add to saleability and auto-steer compatibility is a must. 

Andrew Watson, managing director, New Holland

If second-hand machines aren’t shifting, it inevitably means new kit isn’t selling either – and that is a big headache for manufacturers geared up to churn thousands of units every month.

Each new sale requires second-, third- and fourth-hand machines to be shifted on down the supply chain.

But the picture isn’t as bleak as first thought, according to New Holland UK’s managing director Andrew Watson. “I had been expecting business to be down significantly with the depression in commodity prices, but I’ve been proved wrong and we’re actually doing more trade than predicted.

“I believe that’s partly down to the view we take on hiring tractors. None of our dealers run big hire fleets so we don’t see large numbers of machines distorting the true picture of the sales market.

“More importantly they haven’t got huge lumps of working capital tied up, which is fine as long as residual values hold.

©Nick Fone

“But when the market dips, like it has over the past two years, they can come badly unstuck with way too much stock on the books and no way of shifting it without discounting it below what it’s truly worth.”

He believes that a large proportion of the slump in tractor sales is down to hire fleets no longer being renewed on a yearly basis.

Without a strong second-hand market, hirers are opting to hold on to machines for an extra year or even two.

“It is fair to say there are large numbers of tractors parked in traders’ yards that would have gone overseas if it wasn’t for the currency working against them.

“That means it’s probably a good time for people looking to buy good low-houred machinery and make some significant savings.

“But don’t forget there are additional costs – if it’s fairly fresh then it’s probably worth shelling out for an extended warranty. And then there are the tyres – they’re no longer a cheap consumable.”

In a difficult market, a tractor’s residual value – how quickly it depreciates – comes largely down to its spec.

All our industry insiders advise new kit buyers to think long and hard about the options boxes they tick when they sign on the dotted line.

Suspension

©Nick Fone

Without front axle springing, tractors over 120hp are now very difficult to shift on. Cab damping adds to the package but isn’t quite so critical.

Auto-steer ready

©Nick Fone

Anything over 150hp is now expected to be auto-steering compatible, which means its steering valve is capable of talking to a GPS controller and swinging the wheels in the direction it is told.

Transmission choice

Stepless CVT boxes are now more widely accepted so there is little to choose from between them when it comes to desirability. However speed rating is critical and if a tractor is rated to travel at 50kph then air brakes are a must.

Tyre picture (right) ©Nick Fone

Tyres

Don’t down-spec the rubber purely because it brings down the initial purchase price. Brand choice, tyre size, and condition are some of the biggest factors in second-hand pricing.

Thanks to Mark Hellier, the team at Burden Bros, Dorset farmer James Reed, NH’s Andrew Watson, Deutz dealer Mark Garrick