ASSUMPTION, Ill. — When the market for used agriculture equipment slowed 10-12 months ago, officials with Sloan Implement Co. knew they had to ramp up their marketing, advertising and sales plans in order to stay ahead of their competitors.

With dealer lots in many areas of the country full of used equipment, Sloan employees have worked to build customer relationships and to offer attractive financing to help move inventory, according to Grant Tice, sales manager for the company. He said used equipment sales have been down a "moderate amount" over the past few months to a year.

"If you look back to 2010-13, times were very good," he noted. "It was very easy doing business. Farmers would walk in, say this is what we want to buy and get out their checkbooks. Now, we have to be sharper, we have to work harder.

"We want to be on the front side of this and not on the back side. We don’t want to be riding the tail end of the wave."

Strong new equipment sales over the last few years helped bring about the excess of used equipment as farmers would trade in old for new, Tice said. Lower commodity prices and uncertainty over tax laws, such as Section 179, have led to decreasing sales for the used – and some of the new – equipment market, he added.

Federal Section 179 of the tax code refers to the deduction of business expenses for investments such as property and equipment. In 2012-13, small businesses were able to deduct up to $500,000, but last year the amount was $25,000. In December 2014, Section 179 and other tax extenders were approved by Congress to be retroactive for 2014, but not for future years.

The problem of excess used inventory is a nationwide concern, according to Kim Rominger, executive vice president and CEO of the Ohio-Michigan Equipment Dealers Assoc. and the Mid-America Equipment Retailers Assoc. Together, the organizations represent more than 400 agricultural equipment dealers in Indiana, Kentucky, Michigan and Ohio.

Dealers are reluctant to take used equipment in trade because of the excess used inventory already sitting on their lots, Rominger noted.

The foreign market for used equipment is tight and the loss of middle-sized farm operations has also hurt. Some dealers have been taking used equipment to auction and are surprised at the lower prices they’re getting, he said.

Tice said Sloan has been offering an option to lease as a way to help entice customers to make a used equipment purchase. The idea of leasing farm equipment isn’t new, as it’s been around for 15-20 years, he said.

"We’re trying to customize financing for each customer," he explained. "We try to see what a customer really wants, what’s his budget. In the past, with Section 179 (in effect) and low interest rates, there was no real tax advantage to leasing. Now that we’re back to no Section 179, we’re working to make leasing a good option."

In addition to leasing, Sloan officials have been using more targeted advertising to draw customers, Tice said.

The company also offers service after the sale, including unlimited phone support and help with setting up precision farming tools.

Based in Assumption, Sloan began as a single dealership in 1931. The John Deere dealer has 19 locations in central Illinois and southern Wisconsin.

Sloan does a good deal of export business, though turmoil in areas such as Ukraine and Russia has dampened some markets, Tice stated. The company works to build good relationships with retail customers worldwide and occasionally sends an employee overseas to help service a piece of equipment, he said.

The amount of used equipment inventory has had an impact on new sales, Tice said. "We manage the volume of new sales we create off the number of used pieces we have. We’ll also aim them toward a used piece of equipment. We might have a new piece of equipment for a certain amount, but they can have the used one at a lower price."

Manufacturers are aware their incentives to buy new equipment have to complement used equipment sales and not hinder them, Tice noted. The used equipment inventory will eventually return to a more normal level, he believes.

"Everybody knows the ag business is cyclical," he explained. "It has peaks and valleys. This situation didn’t happen overnight and it won’t end overnight. It will definitely work its way back around."

Farm World attempted to contact several additional dealers in this region for this report but messages were not returned by press time, or company representatives declined to offer comment.