Buying Used Farming Equipment: Important Questions to Ask

Farming Equipment
By Marketing team
September 24, 2020Articles

 

Purchasing used farm equipment isn't all that different from buying a used car; you need to find a fair deal, perform a thorough inspection so you know exactly what you're getting, and arrange for financing. With this in mind, we've assembled a short list of tips to consider at each step of the process.

Finding a reputable seller

Sometimes where you shop for used farm equipment is as important as the price and condition of the equipment itself.

As with anything, be wary of any private sales that sound too good to be true. Your best bets are purchasing machinery from another farmer who you know and trust, or from a reputable local dealer.

Should you discover any hidden mechanical issues with your machinery or if your equipment takes a turn for the worse, you'll be a lot better served if the seller is somebody who is known in the community as a straight shooter and has a reputation to maintain.

If something goes wrong, a dealership with a long-standing record of providing good customer service is also far more likely to rectify the issue than some stranger you met online whose farm is in the United States or two provinces over from you.

Another benefit to buying used farm equipment locally, directly from the seller or a dealer, is that they're likely to know the item for sale intimately and be able to answer any questions you may have. It can be frustrating, not to mention risky, to come up against a seller who isn't familiar with the machinery they're selling or has no plan to follow up or provide continued service for it.

Always pay close attention to online reviews of others who've purchased gear from any specific dealer; the more positive reviews they have, the more likely you'll be to find a fair deal on a quality piece of equipment.

Farm equipment auctions

Farm auctions are popular venues to acquire used equipment, but remember, every other person there is looking for the same bargains you're chasing, and they may have a lot more money to throw around than you. Consequently, it can prove difficult to get a great deal at a farm auction.

Some savvy farmers recommend searching for suitable equipment at alternative auctions, such as consignments, dealer auctions and online auctions. While you won't likely have the opportunity to grill the previous owner about the machinery before committing to purchase, you're far more likely to get a better deal than you would at a farm auction.

That said, regardless of the trustworthiness of a seller, you will absolutely need to conduct a thorough inspection of any machinery you're considering for purchase. We'll get to that in a moment.

Do your research

Knowing exactly what you're looking for is only going to help you save time and ultimately net you a better deal. Research what similar assets are selling for and the market value of the various machines you're interested in over the course of a few months so you don't wind up paying more for the asset than it's truly worth. Check out the asking prices for the equipment and compare that to the prices these items have been going for at recent auctions.

Don't let yourself be married to a specific brand. Consider how much use you're expecting to put on the equipment: if it's not something you plan to be using all the time, buying a cheaper competitive brand could save you a lot of money -- especially if dealer support comes along with it.

Once you've settled on the machinery you want to purchase, it's always wise to get the PIN or VIN of the asset and weigh the official documentation against what the dealer is telling you. If you're looking to have the equipment financed, most financing companies will also do a thorough background check on the item or items as a matter of course before agreeing to give you the loan.

Inspect, inspect, inspect

Any reputable dealership will allow you to thoroughly inspect their inventory before committing to purchasing an item, as will any private seller, within reason, so long as they're confident the asset in question is everything they say it is.

If they won't let you go over it at length, take that as a signal to walk away from the sale, regardless of how attractive a deal it may seem.

There are many things to look for, depending on the piece of equipment you're purchasing. Read up on the specific machine and see what others have to say about its potential weaknesses, making sure to pay special attention to these areas.

For example, if you're looking to purchase something that's rideable like a tractor, pay attention to the driver's seat and check for wear. If the seller is telling you the machinery is next to new but the seat is well-worn, something may be a little fishy. Same thing if you find worn paint on places where feet and hands have been, like pedals, grab handles, gear shifts, etc.

If you're not already well versed in mechanics, bring a friend who is along with you or hire somebody to do a full inspection of the asset you're looking to buy.

Financing used farm equipment

Financing used equipment shouldn't be that much different than if you were purchasing it new. While securing funding from conventional lenders like the big chartered banks could be a little tricky, there are many alternate lending solutions at your disposal.

Most dealerships will have their own financing options available, or you could seek out an alternate lender. Alternate lenders are usually more flexible with their terms than the big banks. Some may also be more apt to work with people who have lower credit scores.

Other financing options include low interest government-backed loans designed specifically to encourage farm operations in Canada. The Canadian Agricultural Loans Act (CALA) is a federal loan guarantee program that covers 95% of any losses sustained should the borrower default on their loans. More information can be found here.

Hitachi Capital Canada offers flexible terms on agricultural equipment leasing and financing. Let’s talk business! Contact us to find out more.