Farm machinery companies are certifying used gear to make it more attractive.
They say it’s more than putting lipstick on a pig.
The concept involves selling low-hour, high-end units with a thorough dealer servicing and a warranty.
The auto industry has been doing this for more than a decade, but it’s new for most machinery makers.
Barry Nelson of John Deere said dealers like the program because it is helping them move late model trades that they have taken during the past few years.
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Higher commodity markets from 2008-14 resulted in many producers buying or leasing new equipment and trading relatively new units to obtain better technology and take advantage of tax programs that accelerated depreciation, as was the case in the United States.
In some cases, producers were trading equipment annually or every two years, resulting in low hour, high value machines landing on dealers’ lots.
“If you talk to a good, strong dealer, they have a program to deal with trade-ins,” Nelson said.
“But it has been hard for some dealers. They don’t want to say no to the sale of a new machine.”
Eric Lescourret of Agco said higher commodity prices have dramatically affected the used market.
“We could see it in the rise in demand for new and what that did for our company. We realized back in 2012 that we really needed to help our dealers manage their growing used equipment inventories. Frankly, their wash-out cycle,” he said.
“Those are big investments for dealers and they need to keep that stuff moving.”
He said a customer survey determined that the company had to take the fear factor out of the purchase of a used machine.
“We started the pilot on a limited scale in 2013, beginning with high horsepower tractors, added combines and then we launched it nation wide. We now do it on larger tractors up to five years old, sprayers four years old and combines, large square baler and self propelled windrowers up to three years old,” he said.
“The way land prices, rent prices are (rising) right now and have been going the last five years, it lets expanding farmers get larger machinery at a price point where their budgets can afford it.”
Deere, Agco and CNH are offering certified used program. Each has its own spin on the programs, but the common factor is a year’s warranty.
Dan Danford of Case IH said the company expects the buying to change in the face of tighter farm margins in the next few years.
“A lot of owners have been buying new the past five years, but in the coming years they may be thinking used for a variety reasons. There are a lot of machines out there that are a year or two or more old, with 1,000 to 2,000 hours maximum,” he said.
“As a manufacturer, we need those used machines to move back into the farm system, so we encourage it by backing the farmer’s decision to buy used.”
michael.raine@producer.com
