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Plan Your Next Equipment Purchase with These 3 Checklists
Investing in the right ag equipment can improve processes, productivity and ultimately increase your bottom line, but it involves weighing many options including where to buy, what to buy and how much to spend. Here are some key questions to ask as you plan your next equipment purchase.
Audit your current ag equipment
Before you make an equipment upgrade, complete an audit of your existing equipment.
Answer these questions about your machinery costs and performance to help you justify your next purchase and identify your short- and long-term goals:
- Does your current machinery perform reliably under a variety of field conditions?
- Are you spending valuable time and money on unscheduled maintenance or repairs?
- Are you looking to increase productivity or capacity?
- Can you cut costs by downsizing?
- Does your equipment meet the requirements – like horsepower or towing capacity – of the jobs you need to complete?
- Will different equipment be needed in the future to accommodate additional acres or crop types?
- Is newer technology available to help you operate more safely or efficiently?
Consider your equipment budget
Involve trusted advisors early in the buying process to set a realistic budget. Your dealer, accountant or lender can help set expectations about purchasing power and affordability. Talk with your advisors about:
- Review production and financial records to assess your working capital.
- Conduct research to compare costs and establish a reasonable price point.
- Reach out to your local dealer for additional information about pricing, product specifications and trade-in values.
- Evaluate opportunities to share equipment or provide custom services to offset costs.
- Consult with your accountant or tax adviser to discuss tax benefits and liabilities.
- Contact your lender to learn about the latest interest rates and your loan and lease options.
- Factor in additional costs that may not be covered in the initial price such as transportation costs or buyer’s fees.
Choosing new or used ag equipment
Choosing between new and used equipment will depend on availability as well as your budget, preferences and individual needs for your operation. While each option has its pros and cons, consider these questions:
- Is a warranty that comes with new or near new equipment important?
- Are you more comfortable working with a dealer than buying at auction or a private seller?
- If you buy at an auction or from a private seller, is the seller reputable or can you trust you will get what you are paying for?
- Can the seller guarantee the equipment will be free and clear of any liens at the time of purchase?
- Can you inspect the equipment in-person?
- When will the equipment be available for pick-up and how quickly can you finalize the sale?
- If buying used equipment, are service records or maintenance logs available?
- Will your purchase qualify for financing? If so, should I purchase or lease?
Once you’ve established a budget, you can search for the best equipment deals. Explore dealerships, auctions -- both in-person and online – as well as machinery listed by private party sellers. Once you are ready, apply online for equipment financing or call 888-525-9805.
Machinery purchases are a major capital commitment and one of the biggest financial decisions you can make for your operation year to year.