Should you buy a new or used tractor in 2025?

For Australian farmers, capital expenditure is a constant balancing act. The decision to buy additional equipment is often a real conundrum: buy new or buy used. Everyone’s got an opinion, too, from the local dealer to the diehard brand tragic at the pub. With all that in mind, let’s go back to basics.

With constantly fluctuating commodity prices and unpredictable seasons, a machinery purchase has the power to impact your farm’s bottom line, so the question of whether to buy new or save some money opting for used gear is a serious question.

When it comes to a primary workhorse like a tractor, the allure of a brand-new machine, with a fresh factory warranty and new productivity-enhancing technology, is strong. But so is the sharp business case for a well-maintained used tractor that could be just as capable but won’t require a computer science degree to work on.

The right choice is rarely obvious and goes well beyond the initial price tag. It’s a decision that hinges on a handful of factors, including long-term running costs, your appetite for risk, and even if you are mechanically adept as opposed to being reliant on dealers for maintenance and repair work.

Here, we break down the five key considerations every farmer should weigh up before deciding on whether to buy a new or used tractor, with many of the principles also applying to other capital expenditure.

The most obvious difference between a new or used tractor is the initial price tag, but the more important figure to focus on is total cost of ownership (TCO) which considers all operational costs across the life of the machine.

While a good, low-hour used tractor can be purchased for a fraction of the price of a new one, its medium- to long-term running costs are less predictable. Without a factory warranty or servicing plan, you’ll need to factor in costs like maintenance, repairs and resale to get a TCO figure.

A new tractor, on the other hand, is likely to come with a multi-year warranty that safeguards against component failures, as well as predictable servicing costs. Of course, the upfront price is higher, so it’s important to ensure the TCO is aligned with, or better than, a comparative used unit.

If in your case new and used machines offer a similar TCO figure, the decision becomes one of risk: is the upfront saving on a used tractor worth foregoing a warranty and predictable maintenance costs?

There are also tax implications – which are typically advantageous when purchasing new machinery – that you can discuss with your accountant.

“Often a new machine will have better interest rates than used, and there’s also the tax benefits,” said O’Connors’ sales manager for its Ballarat, St Arnaud and Birchip dealerships, Rod Male.

“There are also people who have finance contracts and when they finish, they’ll just purchase another one.”

Modern tractors are computers on wheels, with precise GPS, self-steering functionality and on-board telematics feeding data into the cloud. Some, like the Swarmbot we recently tested, even drive themselves.

In a practical sense, this technology allows farmers to get more done in less time. It also, in the case of self-driving tractors like the Swarmbot, helps tackle the skilled worker shortages hitting the agricultural industry.

“There’s the technology, but modern tractors are also faster and more comfortable which is something to consider,” Mr Male said.

“Upgrading to a more versatile tractor is often part of that farm planning piece, so if you know you’re going to have higher production, for example needing to change out from stock to cropping, it can add productivity.”

For a technologically driven operation, or even a farmer open to embracing AgTech, a new tractor may be an investment in productivity. If the onboard smarts of a new tractor allow you to do more with one machine, then that’s hard to put a price on and may well be worth forking out a bit extra for, especially if you’ve got a high-hour, around-the-clock use case.

One major issue with technology is that modern machines are more complex than ever and will require a technician with a laptop if anything goes wrong. If you prefer to do your diagnostics with a spanner and a test light, you might be better off with a simpler machine.

If the wheels ain’t turnin’, you ain’t earnin’. The saying applies whether you’re a farmer, truck driver, or any other asset owner, because downtime hits productivity and your bottom line harder than anything else.

Call it Murphy’s Law, but these periods of unexpected downtime often happen during frantic windows of seeding or harvest and can cost a lot more than just a repair bill. This is, of course, a worst-case scenario, but do consider the cost of downtime if you plan on buying a used machine.

Much of a new tractor’s appeal relates to its warranty, which acts as an uptime insurance policy. Of course, while a manufacturer will shoulder the repair costs should there be a fault, downtime is still a possibility but the likelihood of a new machine being grounded is far lower.

The choice really hinges on how much operational risk you are willing to manage, and how reliant you are on a machine. If you’ve only got one tractor and it does the lion’s share of work on your farm, you obviously don’t want it going down. If you’ve got six machines and can function with one or two being parked up, well, that’s a different story.

The increasing complexity of modern machinery scares off many a backyard mechanic, but most farmers are handy and some even own a scan tool nowadays.

Is a savvy farmer likely to maintain a brand-new tractor? Well, probably not. A technician is going to have the specialised diagnostic tools, and many new machines also include a service plan.

However, there’s no doubt that a mechanically inclined farmer is clearly in a far better position to maintain a used tractor – and depending on how old the model is it may even be cheaper than the upkeep on a new model.

Many used tractors, particularly those from a decade or more ago, were built with owner maintenance in mind. They also lack the complex emissions systems of modern machines, making them far more straightforward to work on.

If you’re flat-out on the farm and prefer to outsource machinery maintenance, a new tractor might be the best option, but if you don’t mind slinging a spanner it could be worth considering a well-maintained used model.

“If someone’s not going to put a lot of hours on a machine or if it’s an extra tractor to help out other machines, used can work,” Mr Male said.

“On the other hand, you buy a new one and you can keep it for longer. If you buy a used machine with 4000 hours, all of a sudden it’s got 6000, but a new one’s going to have 2000 at that point – plus the new one has a warranty.”

The final consideration is where the rubber meets the road, so to speak. You know what tractor you need, you know whether you can wait or need one right now, and you’ve probably got an idea of what you’re willing to spend.

Firstly, you need to get the right tractor for your application. There’s no point buying a tractor that ticks some of your boxes, but not all of them, because you’ll wish you bought the right model from the outset. We’ve all been there…

Now, finding a used tractor that’s got the tyres, hydraulics, transmission and technology you need might take a little bit of time, but if you find a suitable example for sale there’s the obvious benefit of an immediate delivery.

A new model, while it can be specified perfectly for your farm, is typically going to have a wait time that in some cases could be months from the purchase date. If you’re not in a rush, great, but if you need a machine tomorrow, used or near-new might be the only option.

Then there's the price. If you can comfortably afford a new model and don’t want to risk running into repair or maintenance issues with a used machine, it should be an easy decision. If you’re stretched and need a workhorse that won’t hit your bottom line, the used market offers an incredible array of solid tractor options.

The right choice isn’t just about the machine, but about which option – be it new or used – fits the financial and operational requirements of your farm.