Why Heavy Equipment Became Expensive Over The Years

Last Updated on January 27, 2023

Agricultural and construction equipment doesn’t cost what it used to back in the day. Instead, the price is going in one direction – up. Have you ever wondered why is heavy equipment so expensive?

One of the major factors driving prices is the inclusion of an ever increasing number of newer technologies. These technologies have various benefits including: increased productivity, greater efficiency, better accuracy, and performance enhancements. Let’s not forget equipment improvements, better yields, even environmental protections. 

Yet, more technology also contributes to a higher capital cost, higher maintenance costs, and a longer learning curve for end-users. For this reason, numerous equipment owners are seeking older tractors, which cost less to purchase and repair. 

Farms, especially, are generally self-sufficient, and farmers tend to have knowledge for performing some equipment repairs in-house. However, issues arise once you add GPS, automation, remote operation, sensors, diagnostics, screens, cameras, etc. You’ll need to use a computer to address any problems, and making repairs to these systems requires knowledge and skills many farmers don’t possess. 

Engine decisions

In order to avoid these technologies, farmers need to travel back in time with their equipment purchases. One technology numerous people avoid is the Tier 4 engine. 

In the 1990’s, the US Environmental Protection Agency (EPA) created a set of targets for engine manufacturers. This was done in order to reduce emissions of carbon dioxide, nitrogen oxide, and particulate matter. Beginning in 1996, engine manufacturers could only sell engines that met certain emissions reduction targets. This target was called Tier 1. 

Every few years, the emissions standards rose and the engine manufacturing industry went through Tier 2 and Tier 3. As the engines became more environmentally friendly, they also became more complicated and more expensive. Tractors, as well as other farm, off-road equipment, began incorporating elaborate after treatment systems. 

In 2014, engine manufacturers met Tier 4 standards for emissions reduction targets. These new engines included an after treatment system that required a diesel particulate filter (DPF) and the use of a new fluid – diesel exhaust fluid (DEF). 

The added capital and operating costs associated with Tier 4 engines has increased demand for machines produced prior to 2014. If you want to avoid after treatment systems all together, purchase a machine produced prior to 1996. 

Transmission troubles

The 90’s also saw the emergence of installing equipment with a continuously variable transmission (CVT). Although the technology is more than a century old, equipment manufacturers didn’t realize how it could benefit customers until decades later. 

A CVT has mild performance and comfort benefits, and improves fuel efficiency. With it, transmissions don’t need to shift gears. They have one gear, so you don’t feel the shifts. Instead of gears, a CVT uses a steel chain. When it breaks, the transmission stops working and the chain can fracture into many little pieces that’s messy to clean up. 

For maintenance reasons, these transmissions are shunned. Some shops don’t perform CVT repairs or rebuilds. 

From farm to sky

John Deere began working with the NASA Jet Propulsion Laboratory to introduce the first GPS receiver that could be attached to a machine in 1996. In the beginning, farmers used GPS for precise agriculture and site-specific farming. Today, GPS can be coupled with data collection to allow for better farm planning, farm mapping, soil sampling, yield monitoring, and higher efficiency.

And that technology has moved over to construction equipment. GPS with millimeter accuracy is used on construction equipment in grading, and can be coupled with design plans to provide machine control.

If you buy a machine with GPS capability but don’t plan to use it, you don’t have to worry about repairing it. However, you’re also paying a lot for a feature that will provide no value to you. 

Screens 

Putting a screen inside a cab allows for a centralized and easy-to-use machine interface for making performance changes when operating the machine and for diagnosing problems when troubleshooting. However, for people who prefer to diagnose equipment in ways that don’t require a computer, the screen becomes an obstacle and an unnecessary cost. 

Manufacturers have been putting screens in machines since the ‘90s as a means of interacting with GPS, but it didn’t become a diagnostic tool until the 2000’s. By the 2010’s it had become integrated into machines for other performance options. 

A few years ago, John Deere stopped making diagnostic tools available that were needed to determine why equipment failed. Only John Deere dealers had access to these tools, so owners of John Deere equipment had to get repairs completed by the dealer. This is still true today. So far, they appear to be the only manufacturer who has created a diagnostics system that can only be accessed internally. 

For many farmers, this means the equipment must be brought into the dealership instead of getting repaired on premises, which contributes to increased transportation costs and greater downtime.

Then and now

The amount of technology available on equipment has grown exponentially over the last three decades. Today, most construction and agricultural equipment have a lot of the same features, including GPS, sensors, screens, deluxe cabs, and more. 

Compare the features between two tractors – one from 2022 and one from 1983. 

Regardless of brand, model year 2022 tractors come equipped with following:

1. Load sensing hydraulics
2. Triple Link Suspension Plus (TLS)
3. Deluxe seats
4. Suspension cab
5. Display screen
6. GPS receiver
7. Remote operation (which require range finders, thermal infrared sensors, and color cameras)
8. The ability to preset travel speeds, engine speeds, and acceleration responses
9. Triple Link Suspension Plus (a fully integrated, self-leveling front suspension system)
10. Drawbar for heavier implements

Compare these features to the top-rated features advertised on tractors from 40 years ago:

1. 18 forward and six reverse gears
2. 16-speed powershift transmission  
3. Differential lock brakes
4. Air conditioning
5. Two hydraulic outlets
6. 1000 PTO (power take off)
7. Three-point hitch
8. Pin hitch
9. Front weights
10. Rear-wheel weights

Heavy equipment decisions

There are definitely similarities between old and new tractors, but clear differences too. Now, the question for farmers and heavy equipment owners today is which option is better for them. The best way to assess this is to figure out your project needs, your budget, and your ability or willingness to learn new technologies.

No matter where you fall onto the spectrum of buying tractors, there are plenty of options for you. One place to take your search for agricultural autonomy is to an online auction. That way you can ensure that you get the desired equipment conveniently and at a budget-friendly price.