Joint ownership allows you to share the responsibility for investment, repairs, and labor with someone else, and reduce ownership costs per acre.
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Consider owning used machinery when your expected usage is below average, or investment capital is limited.
The purchase cost of a used machine will be lower so annual ownership costs also will be lower.
However, repair and maintenance costs normally increase as machines get older and accumulate more hours of use.
Today farmers can easily invest over $200,000 in a single tractor or combine. Although most farmers own their own machinery, options such as custom hiring, renting and leasing are also popular.
Your choice for acquiring farm machinery will depend on your answers to the following questions: Ownership is by far the most popular method of acquiring long-term control of farm machinery services.
By owning a machine, you control its use and the quality of its performance.
You provide the labor to operate it, and you assume responsibility for repairs and maintenance, liquidation, and obsolescence.
Machinery ownership may be the least expensive choice in the long run, especially for high-use equipment.
However, if you purchase machinery on a dealer finance plan or with credit from some other lender, you may have to pay for it over a short period of time, creating a cash flow problem.
Investment capital is tied up for a long period of time when machinery is owned.
If your farm business is expanding and there are high-return alternative uses for the available capital, other methods of acquiring machinery may be preferred.