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Thread: Depreciation

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  1. #1
    Join Date
    Jan 2007
    Posts
    435

    Depreciation

    I don't post often however I try to read these forums as much as possible. With that said, let me qualify this post. I'm not looking for a business plan analysis. The answer is NO, I'm not trying to make money. If I made some somewhere along the way, great.

    I'm a home shop hobbyist guy. I just got done retrofitting a small benchtop mill. For further information see this post:
    http://www.cnczone.com/forums/showthread.php?t=80204

    It was an interesting process but of course now I'm looking for something bigger. I'm considering purchasing a Haas Super Mini-Mill, Super Mini Mill 2, or an OM-2A. What am I going to make with the machine? I have no clue. Most likely more parts for the machines. I can tell you that most stuff I make for myself will be out of aluminum. So as for which machine is the most appropriate, it would probably be impossible to say. It seems the OM series is really suited toward VERY small parts.

    On to the subject at hand. I keep a close eye on eBay. Periodically I'll come across a machine that appears to be a seller who is also a home shop machinist or someone that bought a machine for prototype work or small production. In other words, some very nice looking, low time machines. These are very few and far between. I distinguish these from the machines that are obviously listed by large resellers. I'm sure that most machines are sold outside of eBay and that eBay is used more as a form of advertising than anything.

    With my limited knowledge I'm wary of buying a used machine only to find out it has some problem that would cost a pretty penny to fix. So, I'm at least considering buying a new machine. My question is, what kind of depreciation can I expect on the machines I listed above? Do some of the models depreciate much quicker than others? My question isn't so much about depreciation over the life of the machine, but the immediate "new car" depreciation that I'm sure is inevitable even with high quality machine tools. Anyone?

  2. #2
    Join Date
    Mar 2003
    Posts
    4826
    I don't know of a hard and fast rule, but I'd suppose you're probably looking at maybe 15 to 25% right off the bat. When you own the machine you are selling, you stand between the dealer and the second buyer, so the second buyer always ponders, "well hell, if I don't get a decent discount to put up with the potential warranty hassles/unknown issues, then I might as well buy a new one."
    First you get good, then you get fast. Then grouchiness sets in.

    (Note: The opinions expressed in this post are my own and are not necessarily those of CNCzone and its management)

  3. #3
    Join Date
    Jan 2007
    Posts
    435
    Anyone else have any opinions on depreciation?

  4. #4
    Join Date
    Apr 2006
    Posts
    235
    Depreciation of CNC machines outside of the accounting book values is kind of odd. I too, looked into various used machines before buying new. The market value of CNC machines varies a great deal more than any big ticket consumer products. Back in 2005/6 when I started to look into CNC machines I found that often the slighted used machines were going for almost the price of new machines. I think because CNC machines are used as product tools and require some lead time for production, if needed, people are willing to pay a premium to have that instantaneous production capacity.

    Like Hu mentioned, depreciation is a function of the used machine market and right now with the recession, there aren't that much demand and the real world depreciation will be a lot greater than if we're in an economic expansion.

    Regarding Super-Mini and OM-2A, I think the OM-2A will be subjected to greater market fluctuation than the SuperMini due to it's smaller market segment.

  5. #5
    Join Date
    Jan 2007
    Posts
    435
    Quote Originally Posted by JohnJW View Post

    Regarding Super-Mini and OM-2A, I think the OM-2A will be subjected to greater market fluctuation than the SuperMini due to it's smaller market segment.
    That's definitely good info to know. Although it seems almost as if the reverse is true since there are so few of them around. I can find the VF series all day long. The MM series, out there but tough to find a good used one, the OM series, nearly non-existent.

  6. #6
    Join Date
    Dec 2007
    Posts
    18
    Apologies for digging this up...but I think it is one of the better questions I've seen for those like me trying to rebuild after the great crash.
    I leased a $65K 3D printer just before the crash. 2007
    At the end of 2008, lots of people were willing to take the machine off my hands for between 10K and 18K.
    I'm looking at another machine purchase.
    The intrinsic value of the machine after the pay off date is important to me.
    I want something that will last my lifetime.
    Frankly, it seems, you have to look at new machines for their scrap value.

  7. #7
    Join Date
    Sep 2009
    Posts
    38
    Not sure where this topic is really going, but to figure this out just look at used machine prices. In other words, a 5 year old VF-whatever is worth $___K on the used market (go to kdcapital or wherever). Compare to today's price for the same model new, there's your "depreciation" if you keep it for X years. You could do this for every year in question, plug it into your spreadsheet...get hourly cost to run per year of life (which is of course higher if you don't run it full time yet), etc.

  8. #8
    Join Date
    Jul 2005
    Posts
    12177
    Quote Originally Posted by CTAC View Post
    Not sure where this topic is really going,....
    You did notice this thread is four years old?

    Anyway to answer your question here is where things went: http://www.cnczone.com/forums/haas_m...ys_market.html
    An open mind is a virtue...so long as all the common sense has not leaked out.

  9. #9
    Join Date
    Sep 2009
    Posts
    38
    Quote Originally Posted by Geof View Post
    You did notice this thread is four years old?
    Yeah, but did you see it got resurrected by Nav7 above? Not by me.

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