Long term tractor hire for minimal capital outlay

When considering the purchase of a new tractor, there is another option in the form of long term hire. With low commodity prices and uncertainty over farm cash flows, hiring from Reading-based Per Hire Ltd over a longer period can be a great way to run a tractor. With very little initial outlay and then monthly payments, capital funds are then available for investment in more specialist machinery or for assets such as grain stores.

James Lane, Agricultural Hire Manager for Per Hire Ltd., said: “we offer a wide range of hire periods on our tractor fleet from as little as one day, but we are increasingly being asked to cost one, two or three year hires with an hours limit attached. With a long term hire, we can offer a fixed monthly cost, with known cash flow and an easier way of budgeting.

“Hiring a tractor means fixed costs, with servicing being carried out as part of the hire charge. Hire charges can be written off against tax and you do not need to worry about depreciation of the tractor, expensive breakdown bills or prices when you want to swap.”

An example could be when hiring a John Deere 6190R AutoQuad 50k from Per Hire Ltd., which in its typical form would cost the hirer around £290 per week based on a 52 week/1,000 hour contract. This equates to £15,080.00 per year, and this would be payable on a monthly basis as the tractor is used. A total cost of £45,240.00 to hire this tractor (excluding VAT and haulage) over three years (and/or 3,000 hours) equates to £15.08 per hour including servicing, which works out highly competitive against actually purchasing the same unit with an extended warranty.

At the end of the agreed period, the hirer can then swap the tractor for another unit or keep it for a further period, or even choose to buy the unit at an agreed value. “We are flexible and believe that long term hire offers a great advantage over buying as the total you actually pay for running the tractor is less (albeit you are not actually buying the tractor), there is no hassle in negotiating the purchase and re-sale prices, plus you will have more peace of mind as all servicing costs are covered,” concludes Lane.

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