When should i sell a tractor?

[KingThx]

Personally i have no clue. Spoke with a number of ppl, one of which who streams often and the general census is somewhere between 20 to 30 hours of use. Afterwhich, they smash the sell button. My question is..... why? Its important to remember that im not saying one way or another is wrong, im just completely curious why ppl sell early. I would like to do it as well but i most likely wont until i understand the why better. I have a valtra N series.............. with 100.5 hours on it. Works fine. However im told keeping one that long is stupid and that i should buy a new one. Am terrible at math, however the upkeep for a 100 hr tractor is around $800. So every midnight i spend $800 on that tractor, which it seems is "stupid". The "smart" thing to do would buy a brand new one!!!!! only $119,000! (upkeep 170 when new).
This i suppose is the part that confuses me. How is spending 119,000 cheaper than..... 800?
800 minus the obligatory 170 equals 630. So in my head, i could use this tractor for another 188.8888888 days (yes the cost would go up for upkeep but i dont have the numbers on that) and only then would it equal the cost of the "smart" decision I.E. buying a brand new tractor. The resale portion of the conversation came into play and he told me he got an extra $10,000 out of the tractor by selling it early!!! My rebutle to that was asking him how much money did he have in the bank. His answer was 1.4mil. When dealing with millions, wtf is 10k? Agreed, 10k here, 10k there will deff add up quick. I dont own 10 tractors tho, i have 4. Regretfully however, the days of the valta are soon at an end as its usefullness has diminished. Soon it is going to get all washed up and make its final trip into town where it will be set off for greener pastures... as it were :) A new tractor will then be in its place to carry on and only one question will yet remain...... When should i sell it?
If you made it this far in the book i appreciate it. Id like to play the game financially responsible, just cant figure out the reasoning being used that seemingly comes so easy to others. If you have a method of buying and selling where i can get the best bang for my buck, would love to hear it. Any help would be appreciated!

[durango39]

We have all different opinions and run our games as we choose so theres no right or wrong way to go about this

We will all have different reasons for keeping or selling equipment so there will never be a deffinitive answer as to whats best

[(TEAMKILL)]

Boy, this is gonna be a busy thread......

I agree with you mostly OP. Selling just because its getting a lil expenisive compaired to new is silly, heres why. You are trying to get away from $800 a day and get back to $170 a day. But guess what, that $170 will start climbing again immediately. That $119k will also start dropping immedately. People forget to add the immediate depriciation into thier figures. The cash value a new tractor loses is also part of its running cost. In 24 operating hours that tractor will lose a big portion of that purchase value. The old tractor has already done that so its just the $800 for it.

I'm not smart enough to do the math formula that is really required to see what the cost diff is between your tractor and a new one. We prob need a math prof to do it, heh. Dont forget too, if you dont buy that new tractor, you could buy 4.75 green houses. Thats income that we could argue is cutting the op costs of the old tractor. In my hard game I get $44 per hour for one greenhouse w/water. One GH alone will cover that old tractors op cost. The other 3.75 are free money, in a sense.....

Buying new equipment is not just less running cost, if that were the case it would be a no brainer.

[GramClan]

I think you should sell when it runs out of usefullness.
But I think that Giants set up the game so that it was 'needing' replaced when the screen in the info screen (that comes up when you push 'Esc') that tells you how much you pay per day in upkeep .......the number is red.

[(TEAMKILL)]

Originally posted by KingThx:

If you have a method of buying and selling where i can get the best bang for my buck, would love to hear it. Any help would be appreciated!

just to be clear... keep old tractor, buy 4 greenhouses ($100k), place them near any river with "beach" front, buy water trailer($10k), back water trailer into river at beach and fill it for free, add water to greenhouses every two days. Not only will your $800 a day for that tractor be coverd, you will make about (I would in my game) an extra $3k per day.

[durango39]

Most of us have farms full of machinery which we pay 5 to 10 grand a day to have but one small field harvest pays for that and more so daily fees are never an issue

[ancienthighway]

After selling off the initial equipment to get rid of redundacy and high daily expenses when money is in short supply, I only buy a tractor if my current tractors can't to the job and I only sell a tractor when it's no longer useful.
Bigger isn't alway better. Newer isn't always cheaper.

[BanDHMO]

OP, you hit it exactly on the head. I have no idea why anyone would sell at as little as 30 hours. The exact most profitable point to sell is hard*(see below) to calculate, but I'm quite sure it's not at just 30 hours.

Here's an obvious upper bound: when your tractor maintenance becomes more than leasing an equivalent tractor would cost, it's time to sell it.

The other thing to keep in my is opportunity cost, to which TK hinted. Loans are limited and so is your cash until late game and buying a new tractor means you pay a lot now, while keeping an old one means your payments are spread out. Considering greenhouses can pay for themselves in 15 days and windmills in 50, if you put off the payment long enough, you may end up with twice as much money.

For those reasons I plan to drive my machines into the ground and not replace until I don't need them anymore.

* Note, it's hard, but possible to figure out the exact mathematical answer of when the best time to sell is. So far, I haven't needed to do the calculation, though, because it is obviously after the point where I will replace my equipment anyway with bigger models simply because they are bigger.

[Alshain]

It's not just the upkeep you have to factor in, it's also the sell price of the old tractor which diminishes with age. There is a point at which the upkeep * x days will outcost the new tractor sale price - sell price of your tractor. That is when you sell.

So, if the tractor's resell value drops 20,000 in the time it takes you to decide to sell, that 20,000 is a loss.

However, that loss is not the end of the world in this game, it's not that hard to make money so if you want to keep it till the wheels fall off, go for it.

[Bullett]

I went into farming because they said there would be no math...

[BanDHMO]

Originally posted by Alshain:

So, if the tractor's resell value drops 20,000 in the time it takes you to decide to sell, that 20,000 is a loss.

This needs to be compared to the depreciation on a new tractor, which will likely be higher.

[Alshain]

Originally posted by Bullett:

I went into farming because they said there would be no math...

Math is everywhere in everything.

Note: This user has a Bachelors Degree in Computer Science with a Minor in Mathematics and may be biased :P

[Alshain]

Originally posted by BanDHMO:

Originally posted by Alshain:

So, if the tractor's resell value drops 20,000 in the time it takes you to decide to sell, that 20,000 is a loss.

This needs to be compared to the depreciation on a new tractor, which will likely be higher.

Correct. That is also part of the equation. However this also means the lower the cost of a new vehicle the faster you reach the point that it is time to sell.

[BanDHMO]

Let's do an actual example. I have two tractors of the same model New Holland 8340. One was an old starting tractor, the other I bought about 20 days ago. The price new is 85K.

T1 is 75 days old, has 74 hours, costs 790/day, sells for $8900
T2 is 19 days old, has 30 hours, costs 548/day, sells for $20800

First, an obvious observation: new equipment drops in price way faster than old equipment. While T2 lost 60K of its value in its first 19 days/30hours, T1 lost 72K in 75 days/74 hours. This means T1 lost just 12K over the last 56 days/44 hours. The older tractor was much cheaper in terms of depreciation.

Over its life, T1 depreciated on average by 85K - 9K / 75 = 1K each day.
Over its shorter life, T2 depreciated on average by (85K - 21K ) / 19 = 3.37K each day.

For approximation, let's assume that daily costs changed linearly. Then, on average, the first 19 days of a tractor's life cost (cost at day 19 + cost at day 0)/2 = (550+200)/2 = 350/day.

The first 75 days cost, on average (cost at 75 + cost at 0)/2 = (790 + 200)/2 = 500/day.

In total, T1 cost about $1.5K/day over its life, while newer T2 cost about $3.5K/day.

Just like a used older car is cheaper to own than buying a brand new car, an older tractor is better value.

[(TEAMKILL)]

I'm telling you guys, just buy greenhouses with what you spend on a new tractor. You will be cash ahead. Unless of course you need a bigger/smaller tractor, thats a diff argument.

[(TEAMKILL)]

Originally posted by Bullett:

I went into farming because they said there would be no math...

Yeah, they lied to you....