Old equipment or new machinery for planting?

Buying a second-hand planter is a fascinating prospect for a budding entrepreneur. The machine can be very affordable and the idea is that the costs will be low if it fails. With the same idea in mind, an excavator can be the oldest, if it breaks down then the hourly cost of downtime is cheap.

The cheapest possible set is indeed cheap to buy and the capital costs are not high. Especially if the entrepreneur is a skilled repairer, purchasing a cheap machine is justified.

If you calculate long enough then everything pays off...this is a saying that can be used to justify both an old machine and a new machine. It's all about what you really want. 

But buying an old machine shows that the idea of work is misunderstood. Why?

The variable costs for the machine are even higher with an old machine than with a new one (spare parts, fuel consumption, etc.) The amortisation and interest costs are lower with an old machine than with a new one, but repayment is more difficult for several reasons: 

A: The old machine has already been abandoned by previous owners - either the machine needs to perform satisfactorily or its work performance needs to be better.

B: The variable costs mentioned above are relatively high, and the old machine has no warranty or comprehensive maintenance. Access to spare parts is difficult and slow.

C: The main reason is the work performance- simple-> the average hourly output of the old xxxcke is studied to be in the order of 170 seedlings/hour (sph). The new Risutec yields over 200 sph (in the Nordic countries) and in eucalyptus plantations up to 250 sph. If you could get e.g. 0,5 eur/seedling for a planted seedling, the difference per hour would be 30*0,5 eur= 15 eur* 8 hours 120 eur/day * (20 working days* 6 months) 120=

14.400 eur. MORE

D: As I said, you can always count in many ways. Let's calculate the life of the machine and the reduction in value using simple numbers and very simply over the top.

THE CALCULATION IS VERY SIMPLE TO SHOW THE RELATIVE DIFFERENCE

Old machine purchase price 25000€ 5 years residual value 5000€

New machine purchase price 50000€ 5 years residual value 15.000€

Annual repayment and interest 5% 

Old machine 25000 annual interest (note for the whole amount - not the yearly amortization) 1000/year and 5 years loan amortization 5000€/year = 6000€

New machine 50,000€ annual interest (note: for the whole amount, not the annual amortisation) 2,500/year and five-year loan amortisation 10,000€/year = 12,500€ 

As you can see the old one is much cheaper than the new one. But- the residual value of the old machine is 5000€ and the new one 15000€. Moreover, the new one has paid 14.400€ MORE per year than the old one i.e. the new one has paid the interest + amortization and still has 1900€ left over/year.

I point out that I have only calculated the planting machine and that too very simply, but both have been calculated in the same way. 

A new machine comes with a warranty and generally speaking, new is always new. Risutec guarantees the machines it sells, including used ones, and they have been upgraded where possible. So even a used Risutec machine is a real option.