Flatlining Tracked Skid Steer Loader Values

An opportunity has opened up this winter that is making used tracked skid steer loaders more affordable, particularly regarding late-model machines.

Spurred on by a strong general economy, construction firms, contractors, and landscapers have been replacing skid steer loaders on a regular basis the last several years. That has placed a larger than usual number of loaders on the used market of late. As winter, particularly the time before the first of the year (for tax purchases), is a common time for such firms to replace their equipment in preparation for the spring and summer building boom, the used marketplace has received large numbers of trade-ins lately.

The other trend that could entice you to upgrade to a tracked skid steer loader is that construction and landscape firms have shown an increased preference for tracked machines in recent years. According to Equipment Data Associates numbers, track loaders accounted for roughly 22% of all financed skid steers in 2015, up from less than 5% a decade previously. In addition, sales of new tracked loaders shot up 18% between July 2014 and June 2015.  

So increasing sales of loaders in recent years have tempered the resale values of used skid steers of late. Tim Miller of Steffes Auction recently observed that the availability of tracked skid steer loaders at auction has certainly made that market niche more competitive.

The Pocket Price Guide on page 31 takes an in-depth look at recent bids given on only 2014 tracked loaders in the 90-hp. range. There was a spike in tracked sales that model year followed by another sales rally late in 2015. Many of these machines are coming in on trade or are being sold outright by construction firms this winter, providing you with an opportunity to buy late-model machines.

challenges to bidding on skid steers  

It may seem like an understatement, but it should be emphasized that shopping for a skid steer loader pits you against a far wider variety of buyers outside of agriculture.

This best explains why the values of skid steers of all types are much more sensitive to hours of use. Not that hours don’t have an impact on farm equipment. But low-hour machines are particularly attractive to the construction and landscaping trades as they seek a machine ready to go to work
immediately after purchase and one that will put in a year or two of hard work before being sold. “Contractors want a machine they don’t have to work on before putting to use,” explains Scott Cook of Cook Auction. “At best, they may get an oil change before being pressed into service – often the day after the sale.”

A great example of this can be found in the two nearly identically equipped 2014 Caterpillar model 279D loaders in the Pocket Price Guide. The Caterpillar with 209 hours from New Hampshire brought a final price of $55,000. The model 279D from Ohio with 1,520 hours sold for $17,000 less ($38,000).

Contractors are also very keen for certain loader accessories, particularly auxiliary hydraulics, quick-attachment devices, and hydraulic quick-couplers, as they often change attachments sometimes several times a day. So loaders rigged with such features fetch strong bids.

The other competitive challenge observant farmers have noticed at farm auctions is that contractors greatly value farmer-owned skid steer loaders. “I’ve had contractors ask me to notify them when pieces of farmer-owned construction equipment come up for sale,” says Cook. “They know of farmers’ reputation for care of their machinery.”

Therefore, you will pay a premium for skid steers from the farm because of more bidders. Regardless of its origin, you need to invest time thoroughly inspecting a loader prior to the sale including –and this is a must – starting the machine up, driving it around, and putting the hydraulics through a full test. Finish your inspection with a close look at the tracks and under-carriage, taking note of wear and tear. As the story at the right testifies, replacement costs of a tracked system can be substantial.

replacement cost sticker shock for skid steer tracks

Tracked loaders offer distinct advantages to wheeled units; namely low ground pressure, greater stability, and higher traction. The Achilles’ heel of tracked loaders is revealed when their tracks and undercarriage need to be replaced.

Figure that the cost of replacing tracks vs. tires on a skid steer is 30% higher for machines of comparable frame size and lift arm configuration. Typically, new tires on a loader (depending on size) will cost $1,000 to $1,200. New tracks will set you back $3,000 to $4,000. 

Replacement costs for tracked loaders don’t end there.

When replacing tracks, you are strongly advised to swap out sprockets, as the old sprockets have worn to match the wear on the old tracks. A worn sprocket can cause premature wear and damage to new tracks. Now, you can move sprockets to the opposite side of the undercarriage, but the hardened surface of the sprocket has likely eroded, shortening its life.

If you are putting thousands of hours of use on a tracked loader, you will eventually have to spend another $4,000-plus replacing undercarriage rollers and idlers.

As a general rule, figure the total life-cycle costs for wheel loaders at $1 to $2 per hour, while tracked machines are around $4 per hour of use, suggests Gregg Zupancic of John Deere.