FOR MOST agricultural machinery dealers, second-hand machinery sales are a necessary duty – the sale of a new tractor normally necessitates the purchase and subsequent resale of a trade-in.

It follows that the successful sale of the trade-in tractor is paramount to the success of the deal overall.

For Simon Sinclair, of Palmers Agriculture – a John Deere dealership based near Hailsham, East Sussex – understanding the second-hand market is as important as knowing the new machines he sells.

“Clinching a sale of a new tractor is often dependent on being able to offer a competitive price for the one leaving the farm,” he explains. “Which means that a full return on the deal will not be realised until the second-hand tractor is sold.”

And there lies the rub.

Mr Sinclair points out that there are some second-hand tractors that are always in demand – and there are some that are not.

“The ones which we have the least trouble selling are 80-120hp tractors that have reasonably low hours – under 3000 – and are in fairly tidy order,” he explains. “And if it”s fitted with a loader then I can usually sell it before it gets to the yard.”

Mr Sinclair also adds that he has customers who have always purchased second-hand tractors and have never bought new.

JUSTIFICATION

“These are customers who, for one reason or another, feel that the investment in a new tractor cannot be justified. It could be that they are only farming in a small way or their enterprise is such that it does not need a modern tractor.

“But these are still important customers for us – as important to us in many ways as the farmer who wants to buy new tractors.”

There is a trend, though, for farmers to keep their tractors for longer, and trade-ins with 6000+ hours on the clock are becoming increasingly common. The days of fleet changes every two years, come what may, are now a vestige of another age in agriculture.

“Even so, you have to say that tractors are now, in the main more reliable than they have been in the past, which means that it does make sense, to a degree, to keep tractors for a little longer than before,” explains Mr Sinclair.

He also points out that the vast majority of tractors are now sold with the support of a finance deal which usually is completed within three years of purchase.

“Many farmers now choose to trade in their tractors for new ones when the finance deal has run full term. For a host of financial reasons it can make reasonable sense to renew a tractor at this time.”

One of the problems of trade-ins faced by the dealer trade as a whole is the degree of electronic sophistication that exists in many modern tractors.

TRADE-INS

“We are only just starting to see these tractors coming back to us as trade-ins,” says Mr Sinclair. “And it”s often the case that some electronic device, which is not perhaps essential to the overall running of the tractor, is not working. The question is: Do we spend money repairing it or do we leave it alone and hope the next purchaser is happy not to have, say, a programmable headland sequence control?”

And it”s a problem which is likely to get worse considering all the electronic devices fitted to tractors in today”s showrooms – electronic engine management, computer controlled transmissions, automated hydraulic control sequencing, etc.

“If it”s a matter of replacing a component then it becomes possible to put them right, but, beyond that, I would suggest they will be left as they are,” he says.

So what happens to Mr Sinclair”s trade-in tractors that he feels he cannot find a suitable home for – at a suitable price?

“Being a John Deere dealer, the policy is to send any tractors that are of another colour to the trade – specialist companies who major in handling such tractors and machinery,” he explains. “They can then be exported to countries throughout Europe where there is a demand for used tractors. I understand Poland takes a lot of second-hand machinery from the UK.”

fwmachinery@rbi.co.uk