Modern equipment is more than iron and hydraulics and wear points and wires. Precision equipment is frequently integrated at the factory as well as added on or upgraded to make equipment that's already in the field or on the site more useful. We asked Bill Albaugh about how modern technology impacts trade-in values for used equipment.
If there's new technology and the tractor you're trading in is kind of old technology, a lot of times you're going to buy the new technology and just trade it in with the old technology. Or, you'll have the scenario where your technology is just the same as what the next one is or maybe it's too much money for you. Then you'll just hang on to that piece of technology and use it for the next piece. So, you see it both ways.
Technology in pieces of equipment are huge costs one way or the other. If you're trading it in and all the GPS stuff is there — if all the telematics for the piece of equipment are there, it adds value to the equipment because that dealership that owns that piece of equipment can sell it based off of that because the next buyer probably is going to want it on it. If the tractor's out there and they want $150,000 for it and you want it to autosteer and, depending upon what type of autosteer, that could add anywhere from $5,000 to $15,000 for the cost of the piece of equipment on top of that $150,000 versus the dealership maybe advertising that same piece of equipment at $165,000 including the technology pieces.
And I think another thing technology wise that comes into play is — for instance John Deere, a lot of it's right there — everything's John Deere from A to Z. From a technology standpoint, other manufacturers may have a Trimble system in it or a Raven system or an Ag Leader system. You know, there's other types of systems that you can add to that piece of equipment that may impact the value or they may hang on to it to put on their next piece of equipment.
Technology, from a valuation standpoint, is something that becomes so obsolete that it may add value to the piece of equipment or it may have zero value because it's not — it's older technology or anything else that comes up to it so you have to really pay attention to what technology's in that piece of equipment — whether it's ag or construction, whether it's usable, A, it functions, B, or, C, it's state of the art in today's world. So technology is a big key when evaluating equipment as well.
HeavyWorth is an appraisal software platform for equipment dealerships that makes it easy to catalog all the information about any number of assets, including recording the specific technology with which each piece is equipped, and quickly and accurately assign values for trade-ins based on all the information in one place. Learn more at https://heavyworth.com/software