Professor Elam

Tuesday Nov 3, 2015

We study leasing in ACCT 3304. The downturn in farm commodity prices has farmers leasing rather than buying.  One farmer notes that he cannot afford to buy, the used tractor prices are falling faster than he can pay off the note. 

The further difficulty is that after paying half what they would in a purchase, the farmer can walk away from the deal. This puts more used tractors on the market further depressing the used prices and leading to a  soft new tractor market. 

Too much leasing means too many used tractors.