With a large volume of late-model, used equipment on the Canadian and U.S. market right now, some manufacturers have begun backing incentive programs to help dealers sell machines before they grow roots in dealership lots. AGCO has just announced it has taken its limited Certified Pre-owned Program to a national level, as well as expanding it to cover a broader range of equipment across most of the company’s brands. The program provides a one-year limited warranty on qualifying machines.
“We started back in 2013,” explains Eric Lescourret, AGCO’s North American director of commercial strategic initiatives, during a conversation at the National Farm Machinery Show in Louisville, Kentucky. “We were looking at what tools can we put in place to do a better job and help our dealers manage their used inventory.”
The Certified Pre-owned Program began as an initiative to help AGCO dealers grow their market share and was based on research the company did to find out what’s important to dealers and used-equipment customers.
“We interviewed a lot of our used customers, about 200, and we wanted to have an understanding of what’s important when they go out and buy a used machine,” adds Lescourret. “We found there was a trend. They were looking for peace of mind when buying a piece of used equipment. So there was a need for it (the program), based on what we learned, even though there was nothing like it (at the time) in the marketplace.”
Now, the AGCO program covers combines, balers and windrowers up to three years old, along with sprayers up to four years old and tractors up to five years.
For any machine in those categories that qualifies, AGCO will throw its weight behind a one-year warranty to help give buyers that peace of mind Lescourret mentioned. But don’t expect to have to pay a fee for an extended warranty the way you might at a car dealership. Participating dealers may ask a higher purchase price for a qualifying machine because of the hours spent by the service department inspecting and refreshing it, but the Certified Pre-owned Program comes without a specific cost.
“For the dealer, he doesn’t necessarily make more money, but because there are more options, he can turn his inventory faster,” Lescourret explains. “Typically about two to four per cent of the book value (is spent by the dealer) in reconditioning costs. The customer will see the value in that. Right now we have some dealers using that to really differentiate themselves in the market.”
And AGCO makes dealers qualify before they can participate in the warranty program. Only those who have proven they have an up-to-date service department and can do the kind of inspection and reconditioning work required get the brand’s backing.
“We have a very robust process our dealers have to go through,” Lescourret adds. “On tractors we have a 120-point inspection. Tractors that would qualify for this are up to five years or 3,000 hours. So it’s giving us a lot of options.”
Brand executives believe taking the risk out of used equipment purchases will give participating dealers an edge in the marketplace, and create happy customers.
“From a customer’s perspective, it’s giving them an option they didn’t have before at that price point,” he says. “They (customers) said we’d like to see a check list of what you’ve done to that piece of equipment and know the history of it and have a good warranty on it, something backed by the manufacturer. The salesman now is able to is able to tell a story.”