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Best time to shop for equipment: Now

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By LACEY JARRELL

Capital Press

End-of-year tax incentives make shopping for new equipment important, dealers say.

For farmers and ranchers looking to purchase new equipment, year-end promotions and tax deductions can offer incentives to buy.

“From now until the end of the year is always a strong time to buy,” said Don Kropf, owner of Linn-Benton Tractor Co. in Tangent, Ore. “Preseason programs are geared toward maximizing value.”

Most equipment sales receive a cash bonus or a low interest rate on financing, according to Carl Laux, sales manager at the Tangent, Ore., Papé dealership.

Laux added that leasing is also a good option for those who don’t want to or can’t afford to buy, although interest rates may be a little higher. Leasing also offers benefits like staying current on technology and reducing maintenance costs through full extended warranties.

Papé offers three-, four-, and five-year lease programs, with an option to buy when the lease term expires.

“When you are looking at a three-quarter ton combine that sells for $350,000, it can be a lot easier to write a lease check,” said Cory Carroll, general manager at Papé.

Before the end of the year, Carroll said, purchasers can take advantage of a Section 179 deduction under the American Taxpayers Relief Act. Section 179 allows full deductions and bonus depreciation for the full purchase price of financed or leased equipment and off-the-shelf software. To qualify, purchasers must buy or lease equipment and put it into service before Dec. 31, 2013. To find out more about Section 179, visit www.section179.org.

Kropf suggested farmers begin meeting with dealers now, or at least well in advance of harvests, to discuss their needs for the next growing season and to review priorities and costs.

“A lot of the larger tractors have to be ordered months in advance,” he said.

Right now, 60- to 100-horsepower tractors are experiencing a nine-month lead time, according to Steve Danner, general manager at Ag West in Rickreall, Ore.

“Large horsepower equipment lead times are a little shorter — 230- to 600-horsepower generally only takes about three to four months.”

Many Northwest dealers are also offering incentives for used equipment, such as combines and big four-wheel-drives, in response to a glut caused by falling corn and soybean prices elsewhere, according to Laux. At the Tangent Papé store, the average age of used equipment is four to five years old, he said.

The region’s sales managers appear to agree that now is the time for those looking for new equipment to begin researching and reaching out to dealers. Manufacturers also take advantage of post-harvest down time to offer special promotions as farmers begin planning for the next harvest, according to Billy Martin, sales manager at Brim New Holland in Salem, Ore.

“The fourth quarter is usually the better time to buy because manufacturers will give you a better discount to clear inventory,” he said.



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