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Three Reasons For Buying Local Used Equipment

When it comes to hunting for used machinery, turning to the Internet opens up a lot of opportunities. The virtual world has made machinery shopping an armchair experience. Just type in the make, model and specifications of the machine you want, and you can find almost every one currently on the market in Canada and the U.S. that matches that description. That s because online machinery advertising websites have gained popularity with dealers who want to show their inventories to the widest possible audience, according to spokesmen from equipment dealer associations.

Because the value of the loonie compared to the U.S. greenback is better than it was a couple of years ago, checking ads from south of the border is now an alternative, too. Because of where the U.S. dollar is today, used equipment in the U.S. is certainly priced more competitively (than it used to be), says John Schmeiser, executive vice-president of the Canada West Equipment Dealers Association.

On top of that, widespread flooding along the Mississippi River and a crippling drought in the southern U.S., ranging from Texas to southern Kansas, has essentially killed the market for used equipment in those areas. Dealers there are bound to be ramping up efforts to unload inventory into a wider geographic area. That almost certainly means increasing their exposure on the web.

They ll have to expand their (marketing) areas, says Matthew Larsgaard, president and CEO of the North Dakota Implement Dealers Association. Dealers, like all of us, get pretty creative when they need to move products. And if they re under pressure to generate sales, their asking prices may be very attractive.

TRANSPORT COSTS

But if you end up making a long-distance purchase, what are you up against?

There will be additional costs. Transporting machines across several hundred miles won t be cheap. Even with bargain-basement pricing, simply paying the cost of getting your purchase home from as far away as Texas could be a deal breaker. And, depending on the type of machine you re looking for, it could be spec d out a lot differently than what is ideal for your needs.

Different crops, soil and climate conditions demand different options on tractors and combines. For example, tire type and size may be significantly different on southern U.S. tractors. Something as simple as swapping a set of R2, wet-condition, rice tires off a tractor for new dry-land R1 types will add thousands to the purchase cost.

That may be one of the facts helping dampen enthusiasm for long-distance sales agreements. Despite the increased buying power of the Canadian dollar, there hasn t exactly been a flood of northbound farm equipment. Nor has there been a lot of Canadian machines going to U.S. customers lately, according to Schmeiser.

SHOP EASY AT HOME

If you re looking for something specific that you can t find anywhere else or you can make the economics pencil out by looking in northern states, going shopping in the U.S. remains an option, at least while our dollar remains near or above parity (which may not last long, according to economists).

Jim Moodie, who owns of a chain of six John Deere dealerships in Montana, says although his business has seen sales to Canadian customers increase recently, the rise has been modest. It s up some, related to the money exchange, he says. We see more traffic on the used four-wheel drive tractors and combines. Farming conditions in that part of the U.S. are comparable to ours, so most equipment there will be well suited for Prairie farms.

Larsgaard says sales into Canada isn t a topic he s discussed with his member dealers in North Dakota. Clearly, it s not a particularly hot topic there, either.

When it comes to buying new equipment, going south isn t really an option at all. Major manufacturers strongly discourage cross-border shopping for new machines in a variety of ways. That practise isn t restricted to farm machinery builders; automakers have been preventing widespread use of that tactic in their industry for decades.

As an example of what manufacturers are doing to limit it, at least one equipment brand won t allow any buying incentives to be applied to sales of new machines bought in the U.S. for export to Canada. It s also difficult for U.S. dealers to stand behind machines that head north.

I really can t warranty anything I sell (into Canada), says Moodie. I can t send someone up to work on it. That would be a violation of Canadian Immigration regulations. He doesn t think it would be cheaper for Canadians to buy new equipment from a U.S. dealer, anyway. Pricing should be competitive, he adds.

SERVICE CONSTRAINTS

In most cases Canadian farmers shouldn t need to dig out their passports in order to find exactly the right machine for their needs. The rise in the number of multi-store dealerships across the Prairies means there is now an enormous amount of equipment available directly through local outlets. Salesmen at one branch can access inventory from all locations in their retail chain. A listing of all of it is bound to be available on company websites. So, you can check it from your home computer.

That s one of the advantages of a multi-store operation, says Schmeiser. Your access to inventory, both parts and whole goods, certainly increases when you walk into a multi-store operation. It s very easy for a (local) salesman to track inventory (at all outlets), and the customer can negotiate with that salesman as if the machine is sitting on the lot. That can greatly simplify the whole buying process.

He adds that as a rule of thumb, there is usually good sense in sticking with a local dealer whenever possible. The one thing we never get away from is this is a sales and service business. No matter where the customer buys something from, you re going to need someone to work on it.

Even with a used machine, a local dealer may provide a limited warranty of sorts to keep you coming back as a customer, possibly something as simple as a reduced rate on replacement parts if a new purchase develops a problem soon after it arrives on the farm. That isn t always practical with a long-distance deal. Even if that far-away dealer provided the same parts discount, just picking them up may be impractical.

And, of course, dealing with someone you know and trust can remove some of the risk in making a business deal.

If you decide to stick with a local retailer, it s still a good idea to search the listings for similar equipment on the web before signing the purchase agreement. Knowing what others are asking for machines like the one you re interested in could help you negotiate a better price. Tools like that (Internet listings) help the customer with the buying process, says Schmeiser. Not only with sourcing used equipment, but helping them establish the value of the current equipment they have and want to use for a trade in.

ScottGarveyismachineryeditorforGrainews.

Contacthimat [email protected]

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Machinery shopping is an arm chair experience

About the author

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Scott Garvey

Scott Garvey is a freelance writer and video producer. He is also the former machinery editor at Grainews.

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