Neil for Messick's here to do a video for you guys that are out there shopping for a piece of equipment. We're going to take some time here this morning, go through and talk through 10 myths that we hear from people who are shopping for a piece of machinery.
We all know the saying bigger is better. And that's something you're frequently going to hear in regards to making an equipment purchase. A lot of guys out there on the internet that are going to tell you things like buy the biggest tractor that you can afford or buy two steps larger than what you actually need. And in some cases, I think that is actually kind of true, over sizing yourself a little bit isn't a terrible idea because these do tend to be long-term purchases. There certainly are some applications where machines like this big T7 back behind me here can never be quite big enough, but there's also applications as well, where you may not necessarily want a bigger machine.
Blindly following that bigger is better advice can run you into making a purchase selection of something that may not necessarily be right for your application. We're not just out here buying equipment, we're not just selling machines, we're buying things that have a purpose. So taking some time to go through and work out in your mind, the purchase that you're making and what kind of tasks that you want to accomplish with it, and then size a piece of machinery to those tasks. Don't just go buy something big, buy something that makes sense for what you're doing. So if your primary goals are things like mowing around a residential property, taking care of things around your lawn, bigger is most certainly not better. Bigger is harder to get around. It's more weight on your lawn. It ruts things up more. If you're out buying a tractor to go out in hay and you want a rake tractor or a header tractor, a good size utility machine with some good chunky tires on it travels through the field nice and that's great, that's what you want. But a machine like this T7 behind me here, while it gets around great, it's going to burn a ton of fuel and you're not going to make as much money at the end of the year. So sizing is kind of a smallest utility tractor for those kinds of tasks is certainly a better approach than just buying something because it's big.
How about this one? Cash is king. Love the guys that come in here, waving the Benjamins around, like it's going to make some kind of big difference in their purchase. Sometimes cash and buying machine for cash can help. Some of our manufacturers have some pretty significant cash discounts, but when you go through and you think of the way a machine is priced, there's a certain slice of the pie. If you look at the purchase price as a whole, a certain slice of that pie is set off for discounting, right?
And those discounts can be a lot of different things. Not necessarily just cash discounts. That pie is also made up of things like multiple implement discounts, maybe discounts that go along with a loader, buying an attachment or discounts related to the kind of customer that you might be. If you're a government or a nonprofit or something like that, there's a certain budget that's set aside in the purchase price of that machine in order to give away discounts. And that slice for cash may not be as big as what you think it is. Some manufacturers do give away a meaningful cash discount, but other ones like Kubota often do not. That cash discount can be surprisingly small and if you value your money appropriately, if you take that pretty significant chunk of change and look and see what it can make you say in an investment account somewhere or even in a safe CD or put into the stock market.
And you look at the returns that you can get off of that cash, oftentimes it's greater than the cash discount that's offered to you in the purchase price of your tractor. You may actually come out ahead in the end of that purchase cycle of your machine by not paying cash. So certainly go through, look at your sale, work out what that cash discount is going to be, but don't make the often incorrect assumption that cash is king. And you're going to walk out the door with the overall best price by paying cash upfront.
Another myth that I see developing out there is a sense that all equipment anymore is good, that anything is kind of fundamentally the same or reasonably high quality today. And as somebody that has the opportunity to get on and off a lot of these machines and trades, all brands of equipment, I'm here to tell you that's absolutely not the case. There are some very significant differences, both operationally and capabilities and quality and comfort between all of these different brands of equipment that are out there.
And if you think of a healthy marketplace, a healthy economy, each one of these companies is really targeting specific subsets where they feel like their product fits in and they tailor their machinery to say a low price point of maybe a little bit more crude build or a higher end model with a lot more features to them. There's some very significant differences between both implements like this Chrome stuff behind me and tractors that are out there on the market today. And I feel like a lot of our social media platforms and that kind of stuff today have washed that out a little bit. You don't get this sense of the differences that are out there between brands, because you're going to find strong advocates for people that own things, right?
Once you've made a purchase decision, if you think of the consumer psychology, that's out there. Once you've bought into a piece of machinery, you become an advocate for it because feeling poorly about it and talking openly about its shortcomings in some way is defeating yourself. And the purchase decision that you chose to make at some point. And owners of equipment, I think are not necessarily the best people out there to really point out the intricacies of machines. There's some great long time operators out there that certainly probably can do that, but individual homeowners or people getting into this business for the very first time that are buying their first piece of equipment. And that is such a huge subset of what's out there anymore. I don't think advocate for this stuff in a healthy way for a community of people who may be shopping and really trying to understand the differences between machines that are out there. So to me, that's an absolute myth that kind of starts to come out anymore that says that all equipment is kind of fundamentally good or fundamentally the same, at the end of the day is absolutely not true.
If you're looking at a machine on the used market, there's certainly some myths out there that exist around a clean tractor. If you're looking at a nice, shiny used piece of equipment, people often have some funny predispositions to what that may actually mean in terms of that machine's previous life, a clean tractor could be a lot of different things. Now you might make the assumption that it's something that just wasn't used, right? That it sat in somebody's garage and they never really put out and put it to work. But I'll tell you, I see a lot of clean tractors in a lot of other contexts as well.
A lot of people out there that are just very intentional about their maintenance tend to keep very clean machines. It could be an indicator of something that was really well taken care of. A clean machine can also be an indicator of somebody who's trying to hide something that may have really ran something, worked it hard, but before it came into a dealership, put a nice coat of wax up there on the hood. And so a clean tractor could tell you a lot of different things. I love the ribbing that people will give each other about getting out there and getting their equipment dirty and putting it to work. But the end of the day, if you look at a clean machine, you don't really know what life story has been in relation to something that might be a little bit more dirty.
Another myth that's out there is that you should buy everything that you need for your tractor, the accessories, the options, the implements all up front. And that's something I have a little bit of an issue with, especially for people who are learning machinery for the very first time. There are definite benefits in the financing implications, doing that single transaction and wrapping it all together into one financing package is advantageous. Oftentimes you're going to get much more advantageous terms on those implements and stuff than you ever would if you came back and bought them separately later. So that portion of it and the financing side is kind of true. However, once you get outside of that and you look at things like accessories on your tractor or lights, hydraulic remotes, those kinds of things, or really going overboard on implements. If you sit down and you wrap up all the jobs that you're going to do with this machine over the next five years, it might cause you to come up with a really long list of implements.
And oftentimes we go and we talk to people who have bought machines down the road, or we're trading things in that are a couple of years old. It's not at all unusual for us to go up and start bringing in things that are nearly unused, right? Hydraulic remotes that have never had the rubber plugs pulled out of them or implements that have never really seen the dirt before, because sometimes people will go through and try to wrap so much expectations for what they're going to do with this machine into that initial purchase.
I kind of prefer to see people pick up the things that are necessities or the things that make the machine flexible for them down the road. Maybe putting on a third function kit on the hydraulic remotes or something so that you can add those things easily down the road. If you decide to put on a grapple or something off the back of the tractor that needs a rear remote setting, your machine up for flexibility is good, but not necessarily going in and packing in every implement that you think that you could potentially use, because you will find once you get out and start operating a piece of equipment regularly, having it on your actual property, instead of looking at pictures in a brochure, you're going to learn a lot more about that tractor and how it operates and what implements might be best for it and work best on your property or size, right to your machine. There's so much that you will learn through seat time that you just can't exactly figure out to wrap into that initial purchase upfront.
Another myth that's out there is that you can find some great values in used equipment. And I'm here to tell you that certainly sometimes that's true when machines age a little bit, but the nice clean stuff that's really attractive, sometimes isn't as good of a deal as you might think it is. If you relate equipment to buying an automobile. When you buy a car and you take a new car home, the value of that vehicle depreciates sharply, as soon as those first miles are put on. And if you're a guy like me, that looks for value out there. I like to buy those low mileage vehicles, because that initial depreciation has gone. The equipment market does not function that way.
There's so much more demand out there for machinery that the used ones, the good clean stuff, that people are really confident about sells for a real premium. And if you need financing for this purchase, you're going to pay five, six, 7% in order to finance that piece of used equipment. And if you compare that against the cost of buying a brand new one at 0%, oftentimes you're going to find that the interest costs are going to wash out the savings of buying the used one. So if you're a cash buyer, yeah you can find some deals on machines like this B2650 right here. But if you're going to finance this machine, you're right up to the cost of the new LX2610, you might as well buy the brand new one with the 0% financing. So if you're looking at clean used equipment, certainly makes sure you're pricing the new ones as well, to make sure that at the end of the day, you are actually saving a little bit of money.
Another piece of advice that you'll hear out there about buying a piece of equipment will be in regards to emissions equipment and avoiding it at almost any cost. This stuff now has been on equipment for a number of years now. We've been going on eight, about eight years now at tier four and tier four emissions at the beginning of it may have been a little rocky. We all had some things to learn, but this far into having this stuff on machinery, now most of the problems have been worked out of it. We find it to be very reliable, anything under 75 horsepower doesn't need DEF fluid, even though most people think it does. The machine's over 75 horsepower. You just need to understand how to handle and treat DEF to avoid most of the problems that you'll find out there. Any experiences that you hear from guys in regards to their trucks, largely do not carry over into tractors and equipment because the duty cycles of those machines are so different from one another.
So today in modern equipment, we could chill out about this kind of stuff, the type of emission systems, whether it's dock only, or DPF or DEF fluid involved, should almost be not even a consideration in your purchasing processes anymore. And that comes from somebody who sells just about every system that's available out there on the market. I wouldn't ever use it as a purchasing consideration to push me one way or the other. Something else to keep in mind, if you ever have a dealership, tell you that a new piece of equipment does not have emissions on it, they are lying to you. That is something that you will have some salesmen say out there about dock only engines as being not having emissions that is completely and totally untrue. It would be phenomenally illegal to even be doing that kind of stuff. So all myths and a modern piece of equipment admissions is just something not to worry about at this point. We've really moved on that kind of stuff by now.
Another myth that's out there is the relationship that you end up having with your dealer. Am I going to need my dealer over the long haul? And in most cases, I'm going to sit here and tell you that is probably, should be one of the most important purchasing considerations. When you're looking at that piece of equipment, it's the dealership who are you buying it from and their ability in order to back it up. This really starts with that automobile thing again. We can very easily buy a car, but not be going back to the dealership in order to go back for any kind of service needs and that kind of stuff that happens though, with equipment we're doing a lot more than just oil changes. Many people take care of that kind of stuff on their own, but the nature of this kind of stuff is that there's a certain amount of wear and tear that happens with it.
Tires are worn out, attachments need to be purchased or sticks will punch through a grill, or there's all those kinds of realities of running a piece of equipment in harsh environments that cause us to be needed at the end of the day for parts and service and that kind of stuff. So when you're making a purchasing decision on a piece of equipment, you certainly want to go and look at things down the line. What does that dealership service department look like? How many parts do they have behind the counter? Do they have a facility that's clean and organized and an operation that's going to be able to take care of this piece of equipment, not just now or a year from now, or a couple of months when I need a filter, but 20 and 30 years from now? Because this is good lasting stuff that many people are going to have for a lifetime.
When we were coming up with topics for this video, I laughed when somebody suggested if it fits it ships, I think that's great. And it's very descriptive of what sometimes I'll see maybe some less than experience or less than honest dealerships do with a tractor sale, because most of these machines are going to have universal skid steer couplers on the front of the loaders or universal three point hitches on their backs. All kinds of implements can be pinned up to that machine. And they may be implements that aren't necessarily appropriate to that tractor. If a dealership is going to try to sell you say the things that they have in stock and not necessarily the things that are right for your tractor, this is what you get. You're right if it fits its ships and you can end up having things that don't fit the machine well, that might be oversized from the tractor or more often than not lighter duty than what really belongs behind that machine and being sold and implemented that might get busted up at the end.
So that idea of if it fits onto the tractor, it's good to go is absolutely incorrect. Just because if it fits on the machine, doesn't necessarily mean that it's right for it. And taking time and going through and understanding, say the manufacturer's recommendations for the right duty implements for the back of that tractor or how to properly size things onto the front loader really should be the duty of a good dealership salesperson. But in the absence of that, having some baseline understanding of it yourself can be really advantageous to you and making the right purchase.
Another myth that you'll hear about equipment is the package deal. It's got the word deal in it. It's got to be a good deal, right? We frequently will have people seeing package deals listed online, available for sale, or walk into a dealership showroom and say, hey, can you give me a package deal. Packaging things together and buying it together. Yeah, can make sense in some situations. And yes, overall in a large purchase, you might walk out with a little better purchase price than if you bought all of those things individually at different times. Where package deals though are absolutely not a good deal for you is when the elements of that package, the things that are rolled into that one purchase price are not necessarily right for you or a good configuration of that machine. We'll see very frequently where different companies will go and roll together, say a trailer and tractor in an implement and put all these things together at a really attractive looking price. And when you go in and you start looking at the different components, you're usually going to find the cheapest trailer that they were able to find, a tractor with the least expensive set of tires on it that are probably not right for your application, a loader with no skid steer coupler on it in order to cut that cost out and the cheapest implement that they were able to find.
And so what you have here at the end of the day is something that might have a very good purchase price, something that's attractive and tempting to try to get you in the door. But if you walked out and actually purchased that thing, you're going to be disappointed in the ways that it holds up or the quality of the implements or the lack of flexibility of the tractor or the way the tires don't fit your application well. So package deals when it's the right package for what you actually need at the end of the day. Okay, maybe, but what is actually pitched to you on that piece of paper, that very low price more often than not, is not as good of a deal as what it looks like on paper.
So those are 10 of the myths or misconceptions that we hear out there in regard to purchasing a piece of equipment. Have been making videos here on YouTube for almost five years now, many of these things have been their very own video topic. If you're just getting into understanding equipment for the very first time, or if you own a piece of machinery and want to understand how to use it better, I'd encourage you to hit the subscribe button there. I think there's a lot that we can educate everybody about, help you to be better operators and understand the things that are out there on the market for your piece of equipment. So hit the subscribe button here and join us.
>> Explore our Compact Tractors
>> Explore our Used Equipment
