Buying Farm Machinery at Auction: Things Worth Thinking About

On-farm dispersal sales, collective machinery sales and online timed auctions are a regular part of the farming calendar. Retirements, contractors scaling back and farms changing direction bring tractors, combines, telehandlers, balers and implements to market, often well looked after and with known histories.

Farm sales have their own rhythm. Payment is often due on the day or the next working day, many auctioneers don't take credit cards, and nothing leaves the yard until it's paid for. These are the questions worth asking before sale day.

1. Before the sale

• —Is the timing right? Prices can rise just before the season a machine is needed. Buying ahead of the season can save money.
• —What do similar machines make? Auction reports in the farming press list recent hammer prices by make, model and hours.
• —How do you register? New buyers usually need to register with photo ID and proof of address before bidding, in person or online.
• —What are the terms? Buyer's premiums at on-farm sales are often a few percent plus VAT, but online bidding can add a surcharge. Read the catalogue's conditions.

2. The machine itself

• —Can you walk round it at viewing? Viewing is usually the day before and the morning of the sale. Use it.
• —Do the hours match the wear? Check the cab, pedals, linkage and pins against the hours shown.
• —Does everything work? Test the PTO, hydraulics, linkage, gearbox and brakes where you can. Check tyre condition, which is expensive to put right.
• —Is the precision kit included? GPS receivers, screens and guidance units are often removed or sold as separate lots.
• —For combines and harvesters: ask about wear parts, threshing components and recent work done.

3. The paperwork

• —Is it clear of finance? The seller warrants they own it, but asking costs nothing.
• —Is it registered for the road? Check that road-going tractors come with a V5C logbook.
• —Is it marked and traceable? Many machines carry security marking and a registered serial number, which helps confirm they are not stolen.
• —Is the telehandler examined? Lifting equipment needs a current thorough examination. Budget for one if it's due.

4. The real cost

An illustrative example for a tractor bought by a VAT-registered farm business:

VAT is usually reclaimable by a VAT-registered farm, but it has to be paid at the sale first, which can be a large sum before harvest income arrives. Check the real figures for your sale, and ask your accountant about VAT.

5. The money

• —Can you pay on the day? Farm sales often want payment by bank transfer or debit card on the day or the next working day. Cash is limited and credit cards are rarely taken.
• —Is your finance agreed before you bid? With payment this quick, pre-approval is the only way to bid with borrowed money confidently.
• —Do repayments match your income? Some lenders offer seasonal repayment schedules that fit around harvest and livestock sales.
• —Did you buy with your own money? You may be able to release that cash later by refinancing a machine you own outright, subject to lender approval.

6. After the hammer

• —Is it insured? Lots usually become the buyer's risk at the fall of the hammer.
• —When must it leave the farm? Removal days are set in the catalogue, and nothing goes without the auctioneer's release once you have paid.
• —Is it ready to work? Budget for a service, oils, filters and any repairs before the season starts.

Finance arranged before sale day

Our sister brand, Hammer Ready, arranges finance for farm machinery bought at auction, including tractors, harvesters, telehandlers, trailers and implements. It can help you get pre-approved before the sale, fund a lot you have just won, or release cash from machinery you bought outright in the last six months.

Hammer Ready works with limited companies, partnerships, LLPs, sole traders and PLCs, on amounts from £26,000. There is no broker fee, and all finance is subject to status and lender approval.