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Buy or keep the machine

Compare the annual cost of keeping the current machine and of replacing it with a new one, and the cost per working hour of each option.

Pre-sizing and estimating tool: the results do not replace a design, calculation, or report signed by a qualified professional, nor verification against the applicable standards.

Preliminary estimateRevision 12/11/2026
Current machine
New machine
Conditions

The current machine value is what it is worth on the market today. Residual values are estimates; test scenarios.

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—Buy or keep
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Cost per hour: keep and buy

Cost per hour worked of each option; the highlighted bar is the cheapest.

Tap the chart to see the values.

Advantage of buying based on the interest rate

Annual difference between keeping and buying at different rates; above zero, buying is cheaper.

Tap the chart to see the values.

What if the data changes?

Drag the controls to simulate data different from what you entered (from 30% less to 30% more) and watch the result change instantly.

Tap the chart to see the values.

Cost per hour by hours worked

Cost per hour of keeping and of buying for 400 to 1,200 working hours per year, with the values entered.

Step by step with your numbers

The calculation done in steps, with the values you entered.

    The calculation memo gathers this page's inputs, results, equations, assumptions, and references, with fields for project, responsible person, and review. The full report also includes the charts and interpretations, in color. In the print window, choose Save as PDF.

    How to use

    Enter the current machine's market value, its annual maintenance, and the value it will have at the end of the horizon. Then enter the new machine's price, its residual value, annual maintenance, interest rate, horizon, and hours worked per year.

    Worked example

    Current one is worth R$ 250,000, will be worth R$ 80,000 in 5 years and costs R$ 9,000/year to maintain. New one costs R$ 400,000, will be worth R$ 120,000 in 5 years and costs R$ 6,000/year. Interest of 12% and 800 hours per year.

    Keep = (250,000 − 80,000) ÷ 5 + 12% × 165,000 + 9,000 = R$ 62,800/year, or R$ 78.50 per hour. Buying = (150,000 − 120,000) ÷ 5 + 12% × 135,000 + 6,000 = R$ 28,200/year, or R$ 35.25 per hour.

    Precautions

    • The residual value changes the result the most; test pessimistic scenarios.
    • A machine with a lot of downtime costs more than the math shows, because operations are delayed.
    • For the cost of each operation, see the machinery hourly cost.

    Method, assumptions, and references

    Equations used

    Annual cost (keep) = (Current value − Residual value) ÷ Years + Interest × (Current value + Residual value) ÷ 2 + Annual maintenance
    Annual cost (buy) = (Price − Used value − Residual value) ÷ Years + Interest × (Price − Used value + Residual value) ÷ 2 + Annual maintenance
    Cost per hour = Annual cost ÷ Hours worked per year

    Assumptions and limits

    • Straight-line depreciation and interest on the average invested capital, at the opportunity cost.
    • Residual value is an estimate; the actual resale value depends on the market and the condition.
    • Taxes, financing with specific terms, insurance, shelter, productivity loss from downtime, and the operator's value are not included.

    Standards and technical documents

    • Agricultural machinery hourly cost method (depreciation, interest, maintenance, and fuel). See the technical publication of your choice for the coefficients.

    Frequently asked questions

    Why does cost per hour matter?

    Because machines work different numbers of hours per year. Comparing annual cost without dividing by hours can favor a machine that works less.

    Why count interest even without financing?

    Because the money used for the purchase could earn a return elsewhere. This opportunity cost is a real cost, even without a loan.

    How to estimate the residual value?

    Check the market value of similar machines, with similar age and hours. If in doubt, use a conservative value and test other scenarios.

    Does the calculation say whether I should buy now?

    No. It compares costs. The decision also depends on credit, the need for operational capacity, and the risk of downtime.