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| “Sure they are paid for now, but maybe the money could have been spent a lot better back then.”
That is bad financial advice. Decisions can only be made during the present. The amount of money spent five years ago should have no influence on the current decision. Of course, the money that was spent could mean that the machine should be reliable for an X number of years, which is the correct logic of thinking.
“If you have a fleet of 30 year old tractors with 5000 hours on them, then maybe you bought too many tractors 30 years ago!”
Again, I highly disagree. I think if someone has a fleet of 30-year-old tractors it means that they decided they would receive more benefit/return to keep the tractors rather than trade or sell them.
I can think of many reasons why to keep old tractors around. Yes, they do incur an opportunity cost, but the benefit they provide might outweigh that. The biggest benefit for us is the amount of time saved by not having to shuffle equipment around all the time. Plus, if one piece of equipment goes down, most likely there is a replacement immediately available. Well-maintained equipment can be just as or more reliable than new equipment.
I think Jdman5055 has a good point. Likewise, I am starting to get the impression that newer tractors are not less reliable, but may be starting to become more disposable with the introduction of the electronics. It seems this has been the trend with the auto industry, and I would not be surprised to see it in the agriculture industry. It sure seems that there are not very many 1989 vehicles for sale anymore.
Mav
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new versus old tractors?
