Europe Finance through the Ineos Portal

[trobex]

Will you have a plan b if you have sold the S-class and the Grenadier needs a little extra fix (of three weeks) at the local garage?
If yes —> sell it
If no. —> keep their Mercedes and finance the Grenadier
Just my opinion

My view of the world is to never hold debt for depreciating assets - given where the global economy is heading it could be wise to deleverage any debts/assets and use cash to ensure you own outright your belongings (the GREN!).

 

[Tom D]

My view of the world is to never hold debt for depreciating assets - given where the global economy is heading it could be wise to deleverage any debts/assets and use cash to ensure you own outright your belongings (the GREN!).

Given that the pound itself is a depreciating asset debt right now makes perfect sense. Inflation pays the interest for you…

 

[trobex]

Given that the pound itself is a depreciating asset debt right now makes perfect sense. Inflation pays the interest for you…

Not when both 'assets; are collapsing, the debt always wins and will come knocking because it's the one thing you simply can't wish away. The depreciating asset and disappear for all debt's concerned, and debt lies waiting. Might be a few New Defenders going cheap later this year in AUS... debt is here to collect!

 

[Tom D]

I have bought loads of kit on finance over the years. When I started the business I hated the idea of debt and would buy old machines that I had to repair myself. Once I realised that I was better off earning rather than repairing I started buying newer kit on finance. It was the best thing I did. Yes the kit depreciates but so long as you get the finance right the asset is always worth more than the debt, so if the shit hits the fan you can always get out without being left with a debt. And with the high inflation of recent years it’s a no brainier. I financed a new tractor last year, around 100k financed, the debt interest is about 5% but inflation is running at 10% so in simple terms I pay 5000 in interest but the debt falls in real terms by 10,000.

 

[bemax]

I have bought loads of kit on finance over the years. When I started the business I hated the idea of debt and would buy old machines that I had to repair myself. Once I realised that I was better off earning rather than repairing I started buying newer kit on finance. It was the best thing I did. Yes the kit depreciates but so long as you get the finance right the asset is always worth more than the debt, so if the shit hits the fan you can always get out without being left with a debt. And with the high inflation of recent years it’s a no brainier. I financed a new tractor last year, around 100k financed, the debt interest is about 5% but inflation is running at 10% so in simple terms I pay 5000 in interest but the debt falls in real terms by 10,000.

But now the debts will probably be at 8-10 % and the inflation can go down. Than it is not a no brainer anymore

 

[Tom D]

But now the debts will probably be at 8-10 % and the inflation can go down. Than it is not a no brainer anymore

That’s true, the ineos finance is 9.9%.. Don’t get me wrong high inflation is not a good thing. But it does make borrowing to buy assets better and and saving worse… To use my tractor example again. It cost 140k but by the time it arrived (9 months) the new price was 153k. So my depreciation starts at 153k.. by now a new one is probably 160k+ So the ‘value’ of the machine isn’t falling as fast as it otherwise would…

 

[bemax]

That’s true, the ineos finance is 9.9%.. Don’t get me wrong high inflation is not a good thing. But it does make borrowing to buy assets better and and saving worse… To use my tractor example again. It cost 140k but by the time it arrived (9 months) the new price was 153k. So my depreciation starts at 153k.. by now a new one is probably 160k+ So the ‘value’ of the machine isn’t falling as fast as it otherwise would…

Yes I see. We decided to buy a new 30 tons wood splitter for our (very) small John Deere last year because all used ones were only slightly cheaper.

 

[Tom D]

Yes I see. We decided to buy a new 30 tons wood splitter for our (very) small John Deere last year because all used ones were only slightly cheaper.

Im selling my 30 ton splitter! Wish i had known..

 

[bemax]

Im selling my 30 ton splitter! Wish i had known..

You’ll get a good price hopefully!

 

[Spjnr]

I have bought loads of kit on finance over the years. When I started the business I hated the idea of debt and would buy old machines that I had to repair myself. Once I realised that I was better off earning rather than repairing I started buying newer kit on finance. It was the best thing I did. Yes the kit depreciates but so long as you get the finance right the asset is always worth more than the debt, so if the shit hits the fan you can always get out without being left with a debt. And with the high inflation of recent years it’s a no brainier. I financed a new tractor last year, around 100k financed, the debt interest is about 5% but inflation is running at 10% so in simple terms I pay 5000 in interest but the debt falls in real terms by 10,000.

For Tractors etc your bang on. Keep the things 3 years old maximum, and go again once the warranty is up.

I'm a sucker for an old machine though. When its something that only comes out the shed once in a blue moon, its a nice way of losing some Taxable profits on something that will help you out here and there, whilst also gaining value with inflation! Especially if its an old, all mechanical thing with sod all electronics on it!

What Tractors are you running Tom?

 

[Tom D]

I have 3 N series Valtras, an older 111, a 154 and a 175. I have a wee BCS alpine too which is one of the things that the grenadier will be towing around.

 

[Spjnr]

I have 3 N series Valtras, an older 111, a 154 and a 175. I have a wee BCS alpine too which is one of the things that the grenadier will be towing around.

Nice mate, Valtra make a cracking tractor! I used to work for a Local authority doing conservation forestry work, spent a long time in an old Valtra (cant recall what model but around MY2001 100-120hp) running a small crane fed Chipper. It used to drive 10x better than the newer Deeres, and far nicer to use in the tight confines of woodland.

Now got a 115hp Zetor Forterra myself, cheap and cheerful tractor that's been bloody reliable. My Grenadier will be towing the Bobcat E26 onto site

 

[Tom D]

How are you getting on with the E26? We have an E19 just now and we’re upsizing. Swithering between an E26 and a brand new Hyundai. There’s only 9k between them and the bobcat has 2500hrs… I like bobcats but I’m leaning towards the hyundai…

 

[Spjnr]

How are you getting on with the E26? We have an E19 just now and we’re upsizing. Swithering between an E26 and a brand new Hyundai. There’s only 9k between them and the bobcat has 2500hrs… I like bobcats but I’m leaning towards the hyundai…

Touch wood its been good. Running an Intermacato Tiger grip on it for chipping/ loading timber, so it doesn't do much actual digging work, only around the farm for our own projects. Its nice that they come with twin aux lines, and a bracket for a fixed grapple as standard. Plus, the flow rate is high enough to run a flail.

Mate of mine who does exclusively construction work raves about the Hyundai's though, he's got machines up to 2.7t, and says for doing footings etc they're the best feeling excavators out there.

 

[Tom D]

We’re same as you, 95% of the time it will have a grab on it.

 

[Spjnr]

I thought about the 19, but came to the conclusion I may as well get the biggest thing I can legally tow with a truck. It does work the vehicle hard though, hence the Grenadier vs a hilux or dmax etc

 

[Trialmaster]

Enjoyed reading all of your sensible points.

Too old for it, but always thought about buying a tractor to become a contractor, but life has moved on since the original thoughts.

 

[MilesD]

Takeuchi our preferred site diggers (but oh so loved by magpies). Satisfied tractor lust with a BCS K400, now fighting the desire for a magni roto.
Unfortunately, the IG will only work with the first 2........ I agree Nomad, contracting life is one big sandpit full of tonka toys

 

[Cheshire cat]

I have a small Takeuchi digger for personal use. Bought second hand, can be left for 6 months under cover and starts immediately. A great machine. Since owning it I seem to have loads more friends too.

 

[DCPU]

Just exactly where in Cheshire do you live...