Five years of record new-product sales in the farm equipment business brought sales, and trade-ins, not seen since the 1970s. It was all good, yet that burgeoning supply of used machines could also be trouble if a dealer can’t move them.

In the farm equipment business, the second or even third sale of a machine brings that dealer profit both in margin on the machine, and repair parts to keep it running in the field. Moving used equipment to keep the inventory under control can be a challenge.

"Claas identified the need for a program back in 2011," says Jeff Lentz, North American remarketing manager, Claas. "We formed a group and put a project together - the Lexion Field Ready conditioning program."

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Claas can lay claim to being the first to market with a certified pre-owned equipment plan. Today, all major manufacturers have some form of CPO plan in place for key products in their used equipment pipeline. "When we saw what was coming we brainstormed a plan to assist dealers and give customers the peace of mind to buy a used Lexion combine," Lentz says. "Sales weren't slowing, we just wanted to make sure that we were doing something for customers, and bringing in new customers."

Value of CPO

The concept of certified pre-owned isn't new. Bill Weber, manager, used equipment optimization, John Deere, points out that dealers have been offering different forms of this concept for years. "There were programs dealers did on their own supported by PowerGard Certified limited coverage," he notes. "The change is that major manufacturers are bringing marketing, support and some consistency to these programs across more locations."

A CPO program does more than move used equipment. It's an opportunity for someone to try out the latest technology they haven't in the past without the new-machine price tag, but with the confidence that the machine is getting some like-new support. That's why every John Deere Certified Pre-Owned machine comes with 1 year of JDLink. Those programs also provide customers the added confidence that if they find a CPO machine at another location, they can be sure it's had the same focused inspection as they would find from their local dealer.

"Our service technicians go through training for inspecting incoming used machines for the certified pre-owned program at Agco," says Eric Lescourret, director of commercial strategic initiatives. "There are specific inspection points, and reconditioning, that goes with the program." He points out that incoming machines may have their precision equipment upgraded, or some other feature added, to be part of the CPO program.

Farmers traveling to dealer lots may find CPO machines and non-CPO machines on the same lot. There will most likely be a price difference, but the CPO machine will also offer some added benefits like an extended protection plan. Lentz, from Claas, says all dealers are putting Lexion combine trade-ins through CPO and offering the machines with the improved protection plan. "We want the customer to ask for the inspection when they come in to buy a combine," he says. "This is full disclosure."

Case IH rolled out a program that covers late-model Axial Flow combines, Steiger and Magnum tractors. "It will be up to the dealer to determine which equipment is inspected for the pre-owned program," says Dan Danford, from Case IH.

New Holland's program will cover CR and CX combines and T8 and T9 Series high-horsepower tractors. Notes Mark Hooper, New Holland's North American Director of Marketing: "[The CPO program] allows [farmers] to buy late model, used New Holland equipment with the assurance that it's been thoroughly inspected and serviced by factory certified dealer technicians. For even more peace of mind, we're backing the Certified Pre-owned units with an extended powertrain warranty with no deductible on all major engine and drivetrain components. This allows our customer to won a factory approved certified machine with confidence and to work it with pride."

Protection plans and deals

The rise of CPO programs also means the equipment buyer will want a handle on what qualifies, and the key benefits. John Deere's Weber points out that the company is offering a comprehensive, 12 month, 500 hour warranty for machines in the program. "We have a deductible for each warranty occurrence," Weber says. "But that occurrence could cover more than one item."

The key is to know what the warranty covers, is it "bumper-to-bumper" or does it cover only the powertrain and engine? Those factors are part of the decision as well. We've put together a table with this story offering a look at the equipment included and the warranty coverages offered.

The Certified Pre-Owned used equipment business is expanding. Claas started in 2011, Agco started in 2013, and expanded the range of machines involved in 2014 and 2015 to include hay equipment and sprayers. John Deere started with large tractors and combines in 2014, adding sprayers in 2015. Case IH and New Holland rolled out their programs earlier this year too.

If you're in the market for a late-model used machine, these programs offer you a new level of peace of mind at buying time.

If you're in the market for a late-model used machine, these programs offer you a new level of peace of mind at buying time.

Certified pre-owned programs at a glance

The table below - click on image for a larger view - shows the different programs in greater detail so you can see what is being offered to the market. Click on the image to download a larger version of the table.

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