Depreciation of WW equipment

[woodydelsur]

My garage/shop is sadly out of space though I have most of the larger tools that I need for now. One is missing though and that's a bandsaw. A friend of mine is interested in buying one but was thinking of a 14" saw. I am considering working something out so that we split the cost of a 16" bandsaw (which I consider better for resawing) and keep it in his garage. We need to work out the details but I was curious as to how this equipment typically depreciates. This way, if one person wants to buy the other one out, we would have some idea to base the cost on.

Woody

[ATP]

do an advanced search for completed items on ebay

[Myxylplyk]

The closer you are now, the more likely this will come between you.

Perhaps you could save some money ans adopt an old machine or save your money and buy new saw of your own.

Myx

[David Hall]

depreciates about 25 to 35% upon leaving the dealers store. It might then go down slowly over the next 5 or 6 years until it reaches approximately 50% of original cost. It then retains about that value as long as it is in good working condition.

The best system I have ever seen for this type of deal is an agreement that at any time either of you can make an offer to the other to buy him out. The other one then can either accept the offer and sell or turn around and buy the other out at the offered price (he MUST do one or the other, he can't simply refuse). This eliminates one or the other trying to lowball because they will just end up screwing themselves - it tends to make any buyout offer reasonable and also tends to discourage buyout offers unless the buyer is serious.

Dave Hall

[woodydelsur]

Thanks Myx. I understand what you're saying and would hate to see a saw mess up our friendship. But the problem isn't money, it's space. If I only had enough space I would find ways to save up the money. However, I'm concerned that time saw time may become difficult to obtain but I think it would be a stretch to have an agreement that says I get to hang in his garage x number of hours a month. Maybe we could do without the dining room so I can expand the garage/shop ;-))

[stoutman]

reread the title of your post and your first post.

you are contradicting yourself.

[Toller]

Properly maintained, and not used 24/7, why should it depreciate? I have always favored the concept of "you set a price and I get to chose whether to buy or sell my half".

[Unisaw A100]

The pleasure of being the first person to rub their fingers across it is typically worth 25-30% of the retail price. After another man's fingers have been on it the price goes way down.

That's why I buy used. I don't mind you taking the retail hit and as far as I'm concerned you can finger the Hell out of it. Just don't let the magic smoke out of the motor.

UA100

[Mutt]

While there is certainly a diminished value associated with a used tool that occurs over time, "depreciation" is not the right term, that's an accounting term, and there is straight line depreciation, accelerated depreciation, and a whole bunch of rules around these calculations and their tax impact that I don't understand - that's for the bean-counters to figure out. My view is that figures lie and liars figure.

All I can say is when I upgraded to an 8" jointer and 15" planer, I sold my Grizz 6" jointer and Delta 12.5" benchtop planer for about $50 less than I paid for both of them (I bought the Grizz used, the planer new) after using them for 9 and 5 years, respectively. Sold in one day, one ad in the paper, to the first guy who showed up at the shop.

I would suggest to the original poster Woody that he have a simple written agreement with his buddy that if either one wants to sell the saw, they put an ad in the paper and each has the right of first refusal on other offers, or can bid more, for the saw - that way you get a market price and nobody's feelings are hurt. Caveat, however, is that the guy with the most free cash wins....

[Mark in Maine]

knew that we would one day want to end the relationship, so the way we set it up was that when one of us wanted out he would name a price, and the other would decide if he wanted to buy half or sell half at that price. Worked out well, when I knew I was moving out of state, I named a price which I felt was below half the value of the boat, my buddy sold me his interest in the boat at that price, and I sold the boat for a nice profit.

[CW]

I've heard about you. You're the guy that buys used cars at new prices, right?

[woodydelsur]

David,

I discussed this with my friend and we seem to like your idea. There are still a few minor details to work out but that's just another excuse to go out for a few beers. I think after we've had a few, we can also talk about visitation rights...

it

[David Hall]

companies that were partners in a joint venture to build a $75 million office/hotel complex in Downtown Pittsburgh in the mid 1980's (I was auditing the joint venture, not either company). These two firms grew to hate being in business together in what was a deeply depressed office space market and the building was barely 40% occupied 3 or 4 years after completion. One (an insurance company) was cash rich and appeared constantly on the verge of making a lowball offer to buyout the other, believing (correctly) that it was cash poor and (incorrectly) would find it difficult to scrape up enough to counter. Unbeknownest to the insurance co., the other firm had lined up another investor that was just itching to buy in on the cheap and the two of them were lying in wait for the insurance company to lowball. It was a standoff for a couple more years, but finally the insurance co. screwed up and lowballed and were bought out in a steal - just in time for the office market in the Steeltown to take off. Hopefully someone lost their job over that, but more likely you and I just got a couple of cents added to our car insurance bills ;)

Good luck and hope you work out the custody and visitation schedules.

Dave Hall

[codepath]

[snip]

huh-huh

That's what she said!

huh-huh

codepath

[Bridger]

LOL...