Poor evaluations can cost dealers big bucks
Tires are some of the costliest wear items on a piece of agricultural equipment. Knowing the value of the tires can have a big impact on your bottom line in a trade-in situation. The more you know about the condition of the tires, the better positioned you’ll be to make an offer that works for you and your dealership.
In theory, a wrong evaluation can swing both ways. But in reality, it’s far more likely that the tires are worth less than worth more. For large pieces of equipment that can have a big impact. Especially because a misevaluation is generally multiplicative depending on whether the machine has four, six, eight or 12 tires on it.
No one wants to make a mistake on a machine with four tires, but you really don’t want to make one if there are 12. Unfortunately, a misevaluation on a 4WD tractor could lead to a negative swing by as much as $20,000-$30,000.
The other factor to consider is that as ag equipment continues to increase in size, power, and speed the costs of the tires also keeps increasing.
When it comes to trading the tires on any piece of equipment, don’t guess, know. Make an informed decision.
Basic steps of valuing a tire
There are basic steps to evaluating a tire on a given piece of equipment. It’s prudent to evaluate every tire on a piece of equipment as opposed to just checking a couple and calling it good.
Generally speaking, larger tires cost more, but all the relevant size information can be found on the sidewall. As an example, a 380 80 R 38 breaks down as follows:
- 380: width in mm
- 80: aspect ratio indicating that the sidewall is 80% of the width
- 38: wheel size in inches
As with any other product, the brand and model will affect value with more established brands, while higher-end models command more of a premium. The bigger issue is when a piece of equipment has one or more tires worth less than the others.
- What is the current tread depth?
Tread depth is most effectively measured with a tread depth gauge. To properly assess tread depth, center the gauge between two lugs and measure, repeat the process three times on each side of the tire for six total measurements. See Dawson Tire & Wheel’s How-To video at https://treadsure.app/videos.
- Percentage of tread compared to new
Knowing the depth is only helpful if you know what percentage is left. Tires can be assets or liabilities on a piece of equipment depending on how much tread life is left.
The general breakdown is as follows:
- 100%-70% tread left – The tires are an asset, add value to equipment, and worth money to trade in.
- 69%-40% tread left – Midlife tires are still fine on the machine they’re on but dismounting/remounting can cause problems. Tires neither add nor subtract equipment value.
- Under 40% tread left – Tires are a liability. Tires subtract value during trade-in and will incur disposal fees which can be $50-$70 per tire.
In the past, figuring out how much tread life was left was a complicated process. Now there’s an app to help you figure it out. The free Treadsure app from Dawson Tire & Wheel makes it easy to figure out how much is left as long as you have a tread depth gauge.
- Tire wear or damage are costly conditions. Weathering, stubble damage, or cuts all negatively diminish a tire’s value. Generally, stubble damage, visible weathering, or visible cuts will mean the tire is no longer an asset no matter how much tread life remains.
- Current prices for new tires continue to increase. Tire prices aren’t static, and the cost of a new tire can affect the value of a used one.
This list should give you a good idea about the overall value of tires on a piece of equipment you’re thinking of taking in on trade, making it easier to ensure that the rubber isn’t being overvalued in a way that makes it harder to make money on a sale. To get a more concrete valuation, it’s always good to call a tire dealer that accepts trades for the current market value.
If you have additional questions about valuing ag tires or want to order tread depth gauges, call Dawson Tire & Wheel at 888-604-3403 or visit the company’s website at www.dawsontireandwheel.com.