[Pasqually]

Shopping for a new tracto- my first outright sole ownership! Dealer has a BRAND NEW/ Zero hour 2018 on the lot!! Could there be something wrong with it or could it be a late production and sitting on the lot for a year??
Thanks for inputs/opinions

 

[pogobill]

I guess it all depends on the dealer overturn on tractor sales. I have a dealer close by that sells tractors, boats and lawn and garden equipment. He has inventory sitting for a long while sometimes. It's just the way it is. Make sure everything works and make sure your warranty starts the day you pick it up!

 

[marc_hanna]

Tractors don’t have as frequent updates as cars, so dealers aren’t as concerned about a previous year hanging around, its value doesn’t drop like new cars.

Secondly, some dealers buy up more inventory when cost effective. For example, here in Canada, all CUTs are imported, so they buy up inventory when the exchange rate is good, and that inventory might last them a couple years, with the exception of special orders.

 

[Pasqually]

Pigobill & Marc,

Thanks for the info!! That’s what I was thinking!! Also Kioti new to my general area!!
Warranty starts on da

 

[Pasqually]

Pigobill & Marc,

Thanks for the info!! That’s what I was thinking!! Also Kioti new to my general area!!
Warranty starts on date of purchase so I’m set there!!

 

[Groo]

Often tractor manufacturers don't even do model years. If it changes significantly, it gets a new model number and small changes won't necessarily be introduced over new years production break or whatever.

It is sitting because nobody purchased it. don't read more into it than that.

 

[Pasqually]

Often tractor manufacturers don't even do model years. If it changes significantly, it gets a new model number and small changes won't necessarily be introduced over new years production break or whatever.

It is sitting because nobody purchased it. don't read more into it than that.

 

[Pasqually]

Groo,
Thanks; that is what I hoped to hear!!

 

[deerhide]

When I was selling MF's we registered/licensed them on the spot. So the date of purchase was never the date of manufacture and the year was not likely correct either but that is how the N.S. Department of Registration did it.....the year was the year it was sold in.

 

[Bob Driver]

There are no tractor, car, truck, lawn mower dealers that I know of that "buys" inventory. It's all "Floor Planned".... The whole point of having a Dealership is to have access to a credit line from the OEM so your operating cash is not tied up in dusty iron sitting on the sales lot.

Think about it... 30 small farm tractors on a lot with a dealer invoice of $15K each = $450,000. What dealer do you know of that has $450K in cash laying around to maintain even that small of an inventory on their lot. OEM's usually cap their floor plans at 16 months. After 16 months, the invoice is due in full and the Dealer owns the equipment outright. OEM floor plans usually run 1-3% of dealer invoice, per month, per unit

Ask anybody that's ever worked the sales floor at a Dealership. They are all aware of what units have been on floor plan the longest, because they are the ones that are sucking the operating cash out of the bank account to make the monthly floor plan payment....

 

[marc_hanna]

There are no tractor, car, truck, lawn mower dealers that I know of that "buys" inventory. It's all "Floor Planned".... The whole point of having a Dealership is to have access to a credit line from the OEM so your operating cash is not tied up in dusty iron sitting on the sales lot.

Think about it... 30 small farm tractors on a lot with a dealer invoice of $15K each = $450,000. What dealer do you know of that has $450K in cash laying around to maintain even that small of an inventory on their lot. OEM's usually cap their floor plans at 16 months. After 16 months, the invoice is due in full and the Dealer owns the equipment outright. OEM floor plans usually run 1-3% of dealer invoice, per month, per unit

Ask anybody that's ever worked the sales floor at a Dealership. They are all aware of what units have been on floor plan the longest, because they are the ones that are sucking the operating cash out of the bank account to make the monthly floor plan payment....

Canada is a different environment than the US. Dealers buy in USD and sell in CAD. You should see how full the lots get when the Canadian dollar is strong and how empty they are when it’s week. That and they told me that’s how they do it. The local MF dealer told me they couldn’t guarantee delivery dates on special orders because they wait for a good exchange so they can honour my quoted price. Pictou county has a population of 40,000 people and an inventory of 120 new tractors on lots.

 

[Bob Driver]

I understand the exchange rate game, but I think you're wrong about them not using some form of floor planning. It's been that way here is the US for over 100 years.

What brought it about was Henry Ford and his Model T. When it was just banks doing lines of credit to the local dealers for inventory and Old Henry wanted to slam the competition in a local market, all he had to do was make a big deposit of Ford cash at a local bank and tell the bank President "Don't loan my money to my competition"... Line of credit evaporated.

Other OEM's had to step up with their own line of credit to dealers in the form of floor plans and it's been that way since.

Do the quick calculations about the amount of cash that local dealership has tied up in 120 units, in a town of 40,000 people, and tell me again how there's not some sort floor planning going on.... Hard to believe a local business would tie up that kind of cash with no guaranteed ROI, or timeline to even begin to calculate the payback period on the inventory investment even if it is in Canada. You guys still operating on capitalism?? We use calculators a lot down here to figure out that sort of stuff

 

[marc_hanna]

I understand what you’re saying, and I think the new dealers take that approach. But they are also very expensive in comparison.

My local MF/Kioti dealer has a lot of inventory that hasn’t budged since I first moved here 3 and a half years ago. That doesn’t seem like very good planning to me. Only the biggest tractors are the ones that seem to turn over quickly, probably because they’re all special order. But the cuts, new and used, and implements, having changed much at all since I perused through them when I bought my tractor from them.

The new dealers are all chains. Two of the biggest ones are Green Diamond Eqipment and Patterson’s. They have locations all over the Maritimes. Patterson’s is into RVs and prefab homes also, but I was shocked to see how little their inventory has changed also. Patterson’s only has cuts, McCormick, LS and TYM. Green Diamond is only John Deere - they have the smallest inventory per lot, but they have a lot of locations - from here to Halifax, I drive by three of their dealerships. They grew by acquisition.

I’m sure it varies from region to region, but I don’t think the independents’ floor planning is based on an annual turnover. Maybe with the small stuff they keep inside. Trust me, I have asked myself how they stay in business while holding on to this inventory for such a long time.

 

[pogobill]

I can't be sure, nor do I need to be... I'm not a dealer, and not looking for a tractor. But that being said, a lad up the road is a dealer for all sorts of equipment, from weed wackers to farm tractors, to boats and motors. I do believe that in idle chit chat around the sales counter one day, he did mention that to be the dealer for a certain product, he had to purchase a specific quantity of merchandise to get the dealership for the product and the support that goes along with it. He has a ship load of tractors, trailers and boats, and some of them have been there for a while. A lot of coin tied up for sure.

 

[Bob Driver]

I'll share this with you guys from the land of the Maplel Leaf, but for pete sake don't let it get out to the guys in Ottawa.

There are several States down here that charge Inventory Holding Tax(IHT)...

In other words, your business gets taxed on whatever inventory you have on the lot/shelf on December 31. Most anything a business sells to the public is subject to the tax. Don't know about other States, but here in MS, anything that is floor planned is not subject to IHT because technically the business does not own it.

That's why nobody shops for Christmas early down here. "YEAR END CLOSEOUT SALE", "SUPER CHRISTMAS SAVINGS SALE".... It's not out of their kindness of heart, they're dumping inventory before DEC 31