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Tractor Talk Discussion Forum

Dealers can't be nuts everywhere?

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mkirsch

06-18-2013 06:49:02




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Are the crazy dealer prices on used equipment just a NY thing?

Seems like a lot of you guys have good luck finding good deals on good used equipment at dealerships. Like Allan in NE.

OR, do you just pay too much?

Case in point. Local dealer has an old 560 gas on the lot.
www.tractor house.com/listingsdetail/detail.aspx?OHID=7761977

Sorry about making you work for the link, but this site won't let me post a "tractor house" link directly.

Nothing to write home about. Dad says it looks worse in person.
It ain't no $4500 tractor. Most of you guys will probably call it a $1500-$2000 tractor.

Walk in, talk to the salesman. What's your best deal? $4500. How about if I pay cash right here? $4500. Ok, thanks for your time.

All the dealers around are like this. They get some old piece of junk and they think they have a golden shoebox.

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mkirsch

06-19-2013 13:24:24




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
Oh the salesmen will gladly tell you where the tractor came from... But look at the 560 I'm using as an example... Does it really matter where it came from when it looks like THAT????



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Bret4207

06-19-2013 04:53:58




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
All I know is that a $5K tractor in Michigan or Ohio or Indiana is a $8-10K tractor here in Northern NY. I look at Tractorhouse, etc. and see, for instance, 5000 Fords with good rubber and in fine cosmetic shape go for, say, $6500. Up here that same tractor would go for at least $8500-9K. If the average tractor from up here went south it'd be considered junk. Rust is big up here, few people have tractor sheds, tires are unreal. IMO location has a lot to do with it.

As far as dealers, our local JD dealer is a pretty good outfit, but- I was looking for a 65-75hp diesel. Their sales guy talked me into trying a MF165 they had on the lot. The hyd pump was shot, wouldn't lift my bale spear, much less a bale. Found out later I was the 3rd guy they tried this on, knowing the pump was bad. Being 10-20hp less than I needed was one thing, but sending a broken unit out was kinda dumb IMO. The Case/AGCO/NH dealer is even worse, their parts guy is surly and they won't even consider budging on prices for used equipment that's already sky high. I don't get it. THey must see the trucks from Monroe and Lamb&Webster and some of the other big outfits in the area. You'd think they'd at least try to compete.

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B-maniac

06-19-2013 11:18:52




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 Re: Dealers can't be nuts everywhere? in reply to Bret4207, 06-19-2013 04:53:58  
If you want to find out just how honest the salesman really is, next time ask for the name and address and phone # of the previous owner of the next tractor you look at! I don't think that is too much to ask when laying down a wad of green. You will get "we don't keep those records" or " we buy from an auction so we don't have that info" or "it came from an estate sale and owner is deseased" or any other story they can get away with. In the event that they actually somehow got a good one they can be honest about , it will either be allready sold to one of their friends or it will be the proverbial $ 15,000 JD 4020 that we all laugh about. If you are the " I want it and I want it now" then go to the dealers. If you want a good machine and the history to prove it , buy from the owner.

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John A.

06-18-2013 19:42:27




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
Mkirsch, In the Future when you walk in asking about a Cash price...... Ask for the man who makes the decisions, Not a Peon Salesman. If you think 2K is good, THROW Down 20, $100 Dollar Bills!
Remember...Money Talks, & Bull Sh!t Walks!!!!
Let them see the Long Green! If you are Close the Real Price comes out.
Dealers will always ask more, they are a dealer, they have lights and help to pay for.
OBTW, You have nothing to loose by walking back in and plop down 20, $100 dollar bills and getting them Revved up!!! Hope this helps!
Later,
John A.

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TomH in PA

06-18-2013 15:22:42




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
Dealers don"t want to sell inexpensive used equipment. They want to sell expensive new equipment. That"s their business.



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B-maniac

06-18-2013 13:09:41




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
Salesman only gets a commission on the sale price so higher the better. Since he does not own the bussiness he could care less about the bottom line, only his commission. Why should he come down? The owner or sales mngr set the price and he will only get the commission he wants if it sells for that price. If it don't sell it's no skin off his a$$. I personnally don't know why anyone buys from a dealer anyway. Rule # 1, GOOD cars.trucks,tractors and equipment do NOT get traded in!!! There is always a neighbor , relative or friend or just an ad on craigs list that will ultimately speak for a GOOD unit. People trade in because of issues and their concience is eased more by trading it to a dealer than someone they will see the next day in the store. Get on the net and leave the dealers sit on their junk.

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Mike (WA)

06-18-2013 15:16:42




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 Re: Dealers can't be nuts everywhere? in reply to B-maniac, 06-18-2013 13:09:41  
I don't agree with the theory that the salesman wants to keep the price high to get a higher commission. He'll make a lot more money fire-saling everything in the place than he will trying to get top dollar for everything, thereby selling more slowly. Volume is the key to big money in sales- if he makes 20% less per sale, but has 3 times the sales, he's a lot better off.



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AG in IN

06-18-2013 16:42:33




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 Re: Dealers can't be nuts everywhere? in reply to Mike (WA), 06-18-2013 15:16:42  

Mike (WA) said: (quoted from post at 23:16:42 06/18/13) I don't agree with the theory that the salesman wants to keep the price high to get a higher commission. He'll make a lot more money fire-saling everything in the place than he will trying to get top dollar for everything, thereby selling more slowly. Volume is the key to big money in sales- if he makes 20% less per sale, but has 3 times the sales, he's a lot better off.


Few anymore want to do any more than they have to to make a buck. Your theory is probably correct. I seldom see it in use in ag or auto dealerships anymore.
Some are, but not all salesmen are on straight commission. Some are actually salaried. Some are salaried, and get bonuses monthly, quarterly, etc., based on performance. Some get a base pay + commission. Some even get a kickback when a piece they got in a trade-in deal is sold for aprofit by another salesman. Some lose their commission and even bear some of the expenses incurred during a repossession. Some have to eat a percentage of loss on a piece of machinery they took in trade that didn't make money for the dealership. There's all kinds of (interesting) pay scheme gimmicks, and it all depends on how the dealership sets it up.

There's alot of up-front expenses other than the equipment that you usually get a return on by simply moving more equipment at less profit. Extra truck/trucker/trucking, insurances, etc. The dealer can also get stuck with a larger lot full of stuff that can loose resale value in a hurry, loose demand in a hurry, and face other issues.

I know of a full-line equipment dealer was a wheelin', dealin', and tradin' bunch in the 70's. They moved new equipment left and right, and were making good money on trade-ins and other used equipment until interest went sky high in the early 80's. Some people thought 25-30% interest was around the corner, and alot of customers that traded every 1-3 years kept their "old stuff" for a while longer to ride it out. Some of their customers went belly-up. Some that bought new before would never buy new again. Major line they represented forced them to place inventory on the lot that wasn't ever going to sell profitably in that economic climate. Used eq. sales dried up, too. Bank started riding the owners hard and interest was eating them (and everyone else) alive. They ended up having an auction to dump most of the (massive amount of) lot inventory that just plain stopped moving. A year or two earlier, probably 90% or more of that same lot inventory would have rotated every 120 days or less. Most of their customers had stopped buying, both new and used, unless they absolutely needed something. They canned the salesmen and one of the owners was pretty much the only salesman after that. They lost several years of equipment sales profit in about 8 hours, and had to get a lean against a considerable amount of farm ground they owned that was totally paid for to unbury the dealership. Regional equipment jockeys made out like bandits. It took them years to fully recover, but they survived. The major line they represented at the time did not. They never had more than about three dozen pieces of used farm equipment and tractors and only a small amount of new equipment on the lot at any given time after that. If you wanted something and had some time, they'd hunt one down for you. In the end, they probably did better with less employees moving less equipment, giving a few bucks less on trade-ins and squeezing a few more bucks out a sale.
Alot of farmers will never forget 15%+ interest rates. Equipment dealers don't either. History often times repeats itself. We shall see.

AG
This post was edited by AG in IN at 17:58:47 06/18/13 2 times.

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jm.

06-18-2013 14:08:37




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 Re: Dealers can't be nuts everywhere? in reply to B-maniac, 06-18-2013 13:09:41  
You are sure wrong about the dealers not getting good used in this part of the country. We sell over 400 tractors a year and have MANY customers that trade on some kind of regular schedule. We get tractor 2 and three years old that are just like new. The junk we take to auction. An Honest dealer is a real good place to get a good buy on used.



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DaninKansas

06-18-2013 16:00:27




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 Re: Dealers can't be nuts everywhere? in reply to jm., 06-18-2013 14:08:37  
I think it depends on the dealer. I know I'd love to get some of the equipment my brothers have been trading in. The 7240 my younger brother traded in on his "new" MX270 was a great tractor - just getting a little high in hours for his needs. My other brothers weren't in need of another 190 HP tractor and he doesn't have time to deal with guys that want to buy it and asks if he'll finance the sale.....


Now if the newest tractor on the lot is 30 years old there is a good chance the dealer is going to take in some crap in trade for it.

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LOU from Wi.

06-18-2013 13:41:44




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 Re: Dealers can't be nuts everywhere? in reply to B-maniac, 06-18-2013 13:09:41  
DARNED GOOD ADVICE> Junk goes to the dealer first, then to the auction then the scrap yard. JMHO. LOU



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David Snipes

06-18-2013 11:35:18




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
Same here. I've seen used and overpriced tractors sit on dealer lots for years without selling because the price is too high and they won't bargain. Since the economy is struggling, you would think prices might come down some



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EricInSEI

06-18-2013 11:08:34




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
You should check out Machinery Pete for what's happening to used equipment prices. Almost every week he is reporting record prices on used machinery.



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mkirsch

06-18-2013 10:44:13




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
I can't fault a guy for trying to make a buck, but how can he when the machine just sits there on the lot with its ridiculous price tag?

These tractors do NOT sell. They sit there until the annual junk auction, where they go across the block for about 1/3 what they were asking. Auctioneer takes 10% of that. Salesman gets ZERO commission. Dealer doesn't even get back what they had into it, and had to store it for a year.

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AG in IN

06-18-2013 15:36:08




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 10:44:13  
Quoting Removed, click Modern View to see

Try trading that same tractor in anywhere on a purchase. I doubt they'd give $1500 off your purchase trading that tractor in. They'd pick it apart, missing lights, car tires on the front, no fenders, 2pt. cyl. missing, goofy steering wheel, on and on. When they sell it, suddenly it has a 3pt. (it doesn't), and ROPS (it doesn't).
Some of these tractors DO sell. Someone gets in a bind, needs something in a hurry, or, needs something on credit, or, just plain wants one/wants that one will buy it. They can't sell it if it isn't there. If a dealer sells 1/3 of similar tractors on their lot in a year and dumps the rest at auction, they're still money ahead. They'll give you squat on a trade in, maybe, pay a bit more if it's an auction tractor and really want one on the lot, and, if it's put on the lot on consignment by the owner, add 50+% to the owner's asking price.

AG

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donjr

06-18-2013 10:25:36




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
The biggest thing I have noticed, is the DEALERS and the REBUILDERS going to the auctions and running prices up, making everyone pay more for a machine after they tote it to their yard. It seems like every auction I have gone to in the past few months, a local junkyard dog (for want of a better name) has gone to every one and bid on a piece of machinery to what the used market should be. If it goes higher, he drops out and let's a few bidders duke it out for an older machine. If it goes cheaper, it'll be in his yard for sale next week- for a good bit more than he paid for it. I have also noticed resalers bidding tractors up, throwing a nice paint job on them, then selling them for twice the money. It's hard to find a sale where you can get a tractor that's been in manure, and will continue to be in manure somewhere else that they don't think it needs a new coat of paint and is worth twice as much to be there.

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Harold Hubbard

06-18-2013 10:24:29




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
Pretty much expect to pay 2X private sale price at any dealer for anything, not just tractors and equipment.



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tomNE

06-18-2013 10:03:47




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
dealers here have been that way for years. if I need something from a dealer bad enuff, I just bend over but I try to think far enuff ahead to avoid the problem. sometimes if you know a machinery jockey, tell them about the equipment and what you'll pay and let them deal on it. they seem to have better luck.



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Traditional Farmer

06-18-2013 09:40:15




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
You priced new equipment lately?As new prices go up so will the price on older usable tractors and
equipment and as the old saying goes "you ain't seen nothing yet"



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DaninKansas

06-18-2013 11:48:51




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 Re: Dealers can't be nuts everywhere? in reply to Traditional Farmer, 06-18-2013 09:40:15  
Agreed.

As the tier 4 engine requirements kick in new equipment is head for the stratusphere.



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mudcreek183

06-18-2013 08:30:41




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
Went to look at a 7000 planter a dealer had he wanted 10'000 for it you would have had to put another 5,000 to get to the field he would not drop the price a dime it is still sitting there.



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AG in IN

06-18-2013 07:44:06




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
Dealers figure most farmers have made big $$$$ in the last few years. They want a larger chunk of it, both on parts and equipment.
Many dealers can/will take a credit card or finance/arrange financing for a purchase. Avg. Joe can't. People many times will pay almost twice the "going rate" for an item because they can finance it.
Unless it's a big $$$$ piece of machinery or tractor, or an incredibly simple fix, most dealers will not run anything they own "through the shop" anymore. $100/hr. shop rate is made by fixing customers' equipment, not their own. You buy the tractor, they'll work the bugs out at shop rate.
That dealer probably wants to make $2K or more selling that one 560, not two or three . Why handle more equipment to make the same $$$$? More expenses, more time, trucking, and other things come into play. Dealer probably doesn't care if you pay cash or not, because they're going to get the same $$$$ amount out of it or more if they finance it. If they are commissioned, the salesman figures it can rot on the lot instead of losing some commission $$$$.
Cash doesn't speak nearly as loudly as it did years ago, or even a decade ago at ag dealers.
AG
This post was edited by AG in IN at 15:12:34 06/18/13 2 times.

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ss55

06-18-2013 14:35:07




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 Re: Dealers can't be nuts everywhere? in reply to AG in IN, 06-18-2013 07:44:06  
That sounds like a lot of car dealers to.



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LAA

06-18-2013 07:38:22




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
If it is a corporate affiliated dealer then the salesman probably has no authority to bargain, a lot of car dealers are that way now days, they set a price and if they don"t get it they send the vehicle or equipment to auction. Also, many dealers don"t want cash sales anymore, they want to finance at exhorbinant rates and they know that most cash customers only buy within their means so they will never get them over a barrel.

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NY 986

06-18-2013 07:14:11




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
I checked the listing and am somewhat surprised by the salesman's response. That dealer usually is considered customer-
oriented. But you are right in that usually older iron is overpriced here. Nothing to see a H or 8N priced for that kind of money. The John Deere dealer I work with has been pretty good but a person has to remember this is still a seller's market currently.



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M Nut

06-18-2013 07:10:54




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
In my small town MN community I have purchased quite a few used machines, and a couple new, from the John Deere dealer. I always use the same salesman and we get along good. I'd say 95% of the time if I am interested in a machine we can come to an agreement on price. Usually not much major give on price, but the item had to be priced right for me to ask about it in the first place. New Holland dealer directly across the street, well that's a different story. Just like you said. Junk but priced like gold. Guess which one went out about a month ago.

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Bob Bancroft

06-18-2013 07:01:02




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
The dealer thing is altogether different than when I worked at one in the 70's. We used to take items in trade, fix them up, and sell them. I am amazed and appalled at how little dealers want to do today. It's difficult to get warranty help on NEW machines! All they want to do is sell the big items to the big farmers. Seems that they have developed an arrogant attitude. And it doesn't help that the different departments in a dealer are now fighting with one another instead of working together. That business model might look good on paper, but it turns me right away.

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NY 986

06-18-2013 09:22:31




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 Re: Dealers can't be nuts everywhere? in reply to Bob Bancroft, 06-18-2013 07:01:02  
The fighting amongst the departments came as the dealership was newly analyzed as having three profit centers starting in the 1980's. Competition developed as bonus money was tied to department profits. Warranty on used equipment was taken out of the shop's margin at some dealers and out of sales in others.



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tractor300

06-18-2013 06:55:40




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 Re: Dealers can't be nuts everywhere? in reply to mkirsch, 06-18-2013 06:49:02  
The sad part is sombody will pay it.



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loko17

06-18-2013 07:06:13




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 Re: Dealers can't be nuts everywhere? in reply to tractor300, 06-18-2013 06:55:40  
Yeah and when someone does pay it, it makes the dealer just repeat the cycle.



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