Only a few years ago, farm management decisions began to include discussions around leasing versus owning farm machinery. There were, and still are, many factors to consider. What’s right for one farm may not be the best choice for another. And accountants warn that once a producer has made a decision, switching back and forth between those two options would likely cause more problems than it could ever possibly cure.
Then there was the emotional element to consider. How important was pride of ownership? It’s definitely something our fathers or grandfathers would have thought important. And I’m sure many of us still do now. I do! But the previous generation of farmers didn’t have much of a choice. Owning was just about the only alternative for them.
With an increased number of producers now opting to lease equipment, it has significantly changed the market for used equipment in North America. Record farm revenues in past years have induced many to frequently upgrade their machinery fleets or pick short-term leases that flip machines after just a season or two, and that has left a lot of high-capacity, late-model equipment sitting idle on dealers lots. Moving that equipment on to a second-tier owner or user has caused more than a little trouble for many dealerships. It has even prompted all major brands to offer warranties on selected used machines that are similar to those on factory fresh equipment.
The glut of used and still relatively pricey machinery has eased somewhat in the past couple of years. To control their inventory, some dealers have even gone so far as to not accept trades of late-model, large air drills and similar equipment, because they just can’t move it on.
As technology advances and consumer preferences continue to evolve in both the machinery and automotive sectors, it poses the question, what choices will farmers face in the future on how they own or have access to machinery? Will there be new and innovative alternatives? It seems likely there will be, if what’s happening in the auto sector is any indicator of what’s to come.
GM has launched a pilot program in Kitchener-Waterloo, Ontario, called Maven. Participants can pick up one of several models of GM vehicles from a central city location and use it for fees starting at C$7 per hour or $63 per day. That includes fuel and licensing. Cars are booked using a smartphone app.
Today, GM announced its Cadillac division is about to start another pilot project in New York city that will allow consumers to be temporary owners of a new Caddy. And they don’t even have to decide which model to dedicate themselves to. They can slip behind the wheel of a choice of vehicles to match their driving intentions on any particular day. GM calls this new program “BOOK”.
Here’s how their press release describes it: “BOOK by Cadillac is an innovative new option targeted at a growing class of luxury drivers searching for access to various cars over time, dependent on their individual needs, coupled with a hassle-free, white-glove exchange.”
Anyone who joins BOOK can use a cell phone app to book any of several Platinum level trim Cadillac models for a specific time period. Members pay U.S.$1,500 per month and don’t have to sign a long-term contract, which makes this less complicated than owning a cell phone. Of course there is the “other fees may apply” proviso in there.
Naturally, the devil is in the details, but at that price level, it could be a real, viable alternative to vehicle ownership in a major city.
The Cadillacs are delivered to the BOOK member’s location and he or she uses it until it’s no longer needed. Then the car is picked up again. There are no licensing or insurance technicalities to deal with. And no maintenance either. Members don’t even have to wash the car.
Naturally, running a program like that in a metropolitan environment is one thing. Expecting a white-gloved concierge to drop off a Caddy in a farmyard three hours from the nearest major city is something else entirely. But this program makes it clear the future for the auto sector is likely to look a lot different than it does now. And brands are already moving in new directions.
Could something similar ever come to the ag equipment sector?