You have $100,000 to spend on a used tractor. What could you buy for that money?
It’s simple to slice and dice our 500,000 auction prices and 100,000 dealer equipment listings using the search filters at MachineryPete.com. When you focus on tractors, you’ll find about 2,100 listings with 175 hp or more and 3,200 listings with 100 hp to 174 hp for $100,000 or less.
From a hard cash perspective, let’s see what the auction data I’ve been compiling for 27 years has to say. Again at MachineryPete.com we can search for tractors with 175 hp or more that recently sold at auction for $100,000 (check out the top data table below for results).
We can use the same search filters to go back in time even further and look through Machinery Pete auction data. Our website includes auction data dating back 17 years, but I have older data in my office. Pre-internet I published a book four times a year.
I literally dusted off my old books and went back 25 years to 1992. I wondered what was the highest auction price paid for a tractor at that time. The answer: $82,500 for a 1-year-old Case IH 9380 four-wheel-drive with only 291 hours and four years remaining on the warranty. The tractor sold at a January 1992 auction in southeast Minnesota.
We’ve come quite a long way in 25 years, haven’t we?
The highest auction price I’ve seen in the past 15 months on a tractor was $340,000 for a 2015 John Deere 9620R four-wheel-drive at a March 29, 2016, farm sale in northwest South Dakota. That’s a 312% increase between 1992 and 2015 for the highest auction price on a tractor.
While I was poking around in the decades-old auction data I ran across a dealer auction in northwest Missouri in September 1993. The auction featured three 1993 John Deere 4960 tractors. The tractor with 135 hours sold for $73,250, the one with 246 hours sold for $72,750 and the third one with 260 hours brought $72,250.
Imagine if you or I had been at the September 1993 auction and bought all three of those John Deere 4960s, put them in a shed for 20 years and then sold them at the top of the market in early 2013. I saw two John Deere 4960s with far more hours sell for $114,000 (1993 model; 3,045 hours; west-central Ohio farm sale on Jan. 24, 2013) and $110,000 (1994 model; 2,140 hours; northwest Illinois farm sale on Feb. 6, 2013). It’s a good reminder timing is everything.
Let’s zip ahead to 2002 and see what tractors were bringing. Check out the data table on page 38 showing seven tractors that sold for $100,000 or more that year. Yep, just seven hit or passed the $100,000 mark 15 years ago. By 2007 we were up to 48 tractors that sold at auction for $100,000 or more, with a high price of $194,000. In 2012, we skyrocketed to 269 tractors sold at auction for $100,000 or more and eclipsed the $300,000 mark on the high side.
So why look backward at our data, or any data for that matter? Because valuable lessons can be learned and applied forward. If there’s one truth I’ve learned from tracking auction data for 27-plus years it’s that the ever-rising price of new equipment pulls up the value of used equipment in good condition even though there’s a bit of age on it.
For example, look at the John Deere 8410 with 437 hours in the data table at the bottom of the page. That tractor, with a five-year warranty, sold for $101,300 at a Nov. 30, 2002, farm auction in southwest Missouri. Now zoom to present day to a Dec. 8, 2016, farm auction in northwest Illinois where a 2000 John Deere 8410 with 2,192 hours sold for $116,000.
Which brings me to the question folks all over have been asking for a while now: “Pete, what will these new tractors be worth in 30 years and who will buy them?” The not-so-subtle implication is all the electronics in today’s modern tractor will not wear well over the decades. Time will tell. I sure hope I’m around in 30 years so we can talk about auction prices.
Perhaps we should bury a time capsule now and make our guesses on what will be the highest auction price on a tractor in 2047? Will there be another 300% price increase like the past 25 years?
Buy your next piece of used farm equipment from the best online resource. With more than 100,000 listings from dealers across the country, shop at www.MachineryPete.com