Sunday, April 14, 2013

Contemplating More Debt: Argh!!

We are actually contemplating taking on additional debt, to the tune of around $15,000, for a new compact tractor. We currently have a very old tractor that we have used for our snow removal. The issue that we've ran into are the cost of the repairs and the high maintenance costs. We don't foresee those things changing in the future with this tractor.

The cost of the new tractor with loader will be around $26,000. We would prefer to buy a used tractor but they don't often come up for sale and don't depreciate the same as vehicles. Yesterday Y found one that was very similar but it was 12 years old and only $5000 less.

The plan is that we will sell our current tractor, old farm pick-up, and Y's motorcycle. Hopefully, we will get at least $11,000 for those three things.

The other positive thing with buying a compact tractor now is that  we can use it for landscaping. We had planned for that to cost us around $3-4000. We are unable to use our current tractor for that because its far too heavy to fine grade our yard.

The main issue is that I just don't want any more debt. Right now we have our mortgage, my car at 0%, and my small student loan.

What do you think? Stupid idea? Go for it?

8 comments:

  1. Do you have a trailer or some other means of transporting a tractor a long distance? If you do and you're willing, you might consider expanding your search for a used one.

    Also, watching printed classified publications instead of just internet classifieds can sometimes net you some treasures from older folks who have taken very good care of things and are selling them at a discount because they don't use the internet for price comparisons. In the very least, I would take some time to shop around and watch for what you're wanting at a discount.

    That just seems like a very large amount of money. I mean, I would think you could pay for the landscaping and a snow removal contract for many years for the price. I'm sure it would be convenient though. Best of luck with your decision!

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  2. I hate to spend money. But this is something that you know about me.
    That said, I think that it is a good plan and something that will need to be done. The old tractor won't last long and I hate to waste money on repairs when it is just a matter of time before it has to be replaced. Look at it like, you are saving money by dumping off the tractor before the repair bills come in.
    We waited and procrastinated when we had our Ford Focus. We dumped $2000 into it and never got it fixed and then had to buy a new to us car. It was crap. Pure crap!
    You just need to come up with a repayment plan before you buy anything. That always helps me sleep at night.

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  3. I know you guys worked hard to get rid of your debt... and you have a baby on the way. I don't know how awesome your health insurance is but your baby is due in what 2014... and with all the health care changes and time you may or may not be able to work on maternity leave, I'd hold off committing to 11k in debt since you might need that flexibility in the future.

    I don't know how badly you need it, but since the one you have is currently working, I say stick with it and re-evaluate post baby bundle of joy.

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  4. Honey, this is a debt but for where you live it is also a necessity. Just buy the tractor and pay it off. Could you rent it out? Or share it?

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  5. I like the suggestions of being able to share/rent it out with others in your area that may be in the same position. Need the equipment, but the cost is so high!

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  6. Just stopped over to see if you came up with a plan?

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  7. I say go for it. If you have no other means to earn $26,000 in a short period time, I don't think getting additional debt would be stupid. But first, you should ensure that you have a steady source of income, so you won't fail on the regular payments. When you miss the first time, it trigger a domino effect. -->Jaden

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  8. Since it doesn’t depreciate that much, it would probably be best to get a new tractor than a used one. That way you’ll be sure that the parts and engine are not damaged in any way. The only problem I foresee is if you sell the old tractor for less. That could result in a bigger debt than what you anticipated.

    Paddon+Yorke

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