How to Negotiate a Fair Farm Equipment Price

While many people across the country are feeling the pinch of rising costs as U.S. inflation rates hover at 3.1%, farmers themselves have been dealing with rising prices of farm equipment and tools for several years. 

In 2021, farm machinery prices increased at least 15%. By 2023, farm production expenses in general were up as much as 28%.

One strategy farmers are using to combat inflationary pressures is to negotiate the price of their farm equipment. 

In this post, we’ll explore what type of equipment you can negotiate prices for, provide you with steps to help you get a fair and reasonable price, and give you the opportunity to apply for an equipment loan through FBN® Finance. You’ll come away armed with the knowledge and tools necessary to help you conserve your budget and maximize your profits. 

You can also download our free guide How to Negotiate Ag Equipment Prices Like a Pro for a handy pdf of tips on negotiating. 

Types of Farm Equipment You Can Negotiate Pricing For

Have you ever wondered how to get the best deal on farm machinery, whether you can bargain the sale price of both new and used equipment, or how to negotiate a tractor price? 

When it comes to purchasing a new pair of jeans, there often isn’t any room for haggling over the price. But this does not apply to large farm equipment purchases. Don’t take the first price you see as the best and final offer. There is often room for negotiation. 

In fact, many dealers, expecting there to be a negotiation process, inflate the price.

You can often negotiate the price of the following:

  • New farm equipment

  • Used farm equipment 

  • Farm equipment at a dealership

  • Farm equipment sold through a private seller

  • Heavy machinery

  • Parts

7 Steps to Negotiate a Fair Price for Farm Equipment 

Use these steps to distinguish between what’s a good deal and when to walk away and to learn the best way to negotiate when you dislike haggling

1. Prepare Far in Advance

When you wait until the last minute to begin the process of purchasing a new piece of farm equipment, you may end up paying more. This could be for a number of reasons, including:

  • Feeling pressured to purchase quickly even though you haven’t done sufficient research on the latest innovations 

  • Purchasing what’s currently in stock instead of having time to wait for the exact right model for your operation or the less expensive model

  • Paying to expedite customization

  • Paying to expedite shipping and delivery

Rather than waiting until you absolutely need a new piece of equipment, give yourself ample time. Factor in that you will want to:

  • Adequately gather information

  • Have some back-and-forth during the negotiation process

  • Possibly even wait until another season

2. Determine Your Equipment Needs

While you likely already know that you need a general category of equipment — for instance, a combine harvester — you still should consider what your more specific needs for that piece of equipment are. If you’re upgrading from a previous model, consider what you liked best and what you may want in this next piece of equipment. 

This is a great time to reduce costs by going with a less expensive model if you didn’t use all the bells and whistles on the fancy equipment you previously purchased. Conversely, with the autonomous farming equipment market expected to reach $95 billion by 2027, this is also an excellent opportunity to look into equipment that will help you reduce labor costs, speed production, and become more eco-friendly so that you can stay competitive. 

There isn’t one size fits all when it comes to purchasing farm equipment. Pick what best suits your operation’s needs and your budget.  

3. Research Equipment Prices

To know how to determine fair and reasonable price points for the equipment you need, research what the going rate is on the market. You can look online, call retailers, and ask in forums like the FBN Community Forum.

When gathering data, consider low and high price ranges for:

  • The latest model

  • An older model that is new

  • An older model that is used

  • Add-ons and accessories 

  • Service fees

  • General maintenance fees

  • Warranty

  • Rentals 

These data points will be helpful in helping you negotiate the overall best price so that you don’t save in one area, say the equipment itself, only to discover that the seller made up the cost in another area, say the warranty. 

While you research equipment prices, also research what reviewers have to say about equipment quality. Sometimes spending more upfront can save money in the long run. Other times, the latest model may not work as well as the one you were more recently using. 

4. Know Your Equipment Budget 

Crunch the numbers on your overall operations budget so you have the most recent data to work with to make an informed decision about your budget. You may find that costs went up or down elsewhere on the farm, and that could change how much you can realistically spend on new farm equipment.

Armed with the knowledge of the going rate of the equipment you need (see Step 3) and your operation budget, you can determine your equipment budget. It’s a good idea to have a range in mind that includes the highest price you’ll pay if you were to get everything you want in the piece of equipment, factoring in any shipping and handling costs, service fees, warranty, and other things that may be associated with the overall cost. 

[Do you have sufficient cash on hand to afford a new equipment purchase? Check your cash flow with a free Excel template download.]

5. Ask Questions

Once you’re ready to start the negotiation process, simply asking questions is a great way to both gather general information about the equipment you’re considering and also prompt the seller to begin negotiating with themselves. 

To start, ask the seller:

  • About their offerings and develop a rapport 

  • Which equipment has been selling the best and why

  • How much they can come down in price 

  • If they have any upcoming sales events

  • If they offer any bundle packages

These should be leading questions that get the salesperson in the frame of mind to offer you the best possible deal.

Physically inspecting the equipment for yourself may give you more information on the types of questions to ask. This is particularly true for used equipment, where you may notice issues that could get you a discount. 

It can also be true for new equipment too, as you may discover it requires an additional purchase to fully utilize — for instance, perhaps you need a loader in addition to make a new tractor more productive — that you could see if the seller is willing to throw in for free or discount. 

6. Look Beyond the Price

As you conduct your research and ask questions of the seller, you’ll likely discover that price and value are not necessarily the same thing. 

If you negotiate down the price of farm equipment but then get talked into purchasing extra features you don’t need, you’re not truly getting the best value. Or, if you buy a cheap used model that needs a lot of repairs, you may end up having to either pay more later to refurbish it or replace it entirely.

7. Play the Long Game

It’s often said that you can catch more flies with honey than you can with vinegar. Bargaining is expected, but negotiation does not need to be ruthless. 

Establishing a congenial relationship with a seller can help you in the long run. They may be willing to let you know about upcoming sales, put aside machinery and implements for you before they sell out, and throw in some freebies for being a loyal and likable customer.

Don’t feel pressured into making a purchase even if you’ve established a relationship with the seller, though. In the end, you need to do what’s right for your budget. 

Be patient, and be willing to walk away. If you’ve built enough time into your negotiation process, as suggested in Step 1, you may be able to pass up a decent sale for one that better suits your needs and budget. 

[Ready to buy? Review the Equipment Purchase Checklist first to make sure you’ve checked off every step of the preparation process and position yourself to secure a good deal.]

Equipment Loans from FBN Finance

Negotiation tactics can only stretch a budget so far. With the cost of equipment rising, you may need farm equipment financing to purchase the equipment that’s best suited for your operation.

FBN Finance provides trusted solutions for farm equipment loans, which can be used to:

  • Purchase new equipment

  • Buy used equipment 

  • Upgrade your existing equipment

  • Finance maintenance or repairs on your existing equipment

At FBN Finance, we understand the value of the right farm equipment. Because many of our loan advisors are farmers themselves, they understand how equipment can empower you to maximize efficiency while minimizing labor costs, optimizing your farm and increasing your ROI. Click here or call our team today at 866-551-3950 to learn more about what’s possible with an equipment loan for your ag operation.

Download the Free Guide

Unlock your free How to Negotiate Ag Equipment Prices Like a Pro guide here.

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