New Vs. Used | Benefits of Buying Used Construction Equipment
Every dollar counts in the construction business. In order to survive and make a profit, you have to increase productivity and reduce costs. Purchasing used construction equipment can be a smart business move, in both ways.
Buying used saves money up front, and it can reduce TCO, too
A shiny new machine is a thing of beauty, no doubt about it. It incorporates all the latest design and technology features that streamline operation and maintenance and enhance fuel economy. It has a long life ahead of it, and it comes with a manufacturer’s warranty that protects your investment against certain significant problems, should they occur.
But new construction equipment also comes with a whopping price tag. It represents a big hit to your capital resources, or a big monthly payment for a lease or financing. Can you really justify that? A used machine in top condition will cost much less and could be just as useful from a productivity standpoint. For many contractors and fleet managers, the decision hinges on operations/maintenance costs. But you shouldn’t assume your costs will be lower for new equipment than used.
Let’s look at the reasons buying used can be more cost-effective in the long run.
You can get more machine for less money. A relatively recent model will still bring you most of the latest efficiency features found on brand new equipment. Realistically, you probably don’t need anything more anyway. So your total cost of ownership starts with a much lower purchase figure. You’ll also get:
- Stronger resale value, again because you’ve dodged that initial value drop. There’s a good chance you’ll be able to sell the equipment for a price not much different from what you paid for it used, as long as you maintain it well. Keep your records (always a business best practice).
- A flatter learning curve for operators, since older equipment is more likely to have controls, etc. that operators are familiar with. Learning to use the controls and telematics on new machines can take considerable training, which costs money and slows productivity in the near term. The same holds true for in-house service techs who will be responsible for maintaining and repairing equipment.
- A reliable warranty. Reputable dealers that sell used construction equipment want to help customers get the most value from that machine. They may offer comprehensive service contracts for routine maintenance, but the best dealerships also offer extended warranties that cover more catastrophic problems.
Extended warranties extend the value of used construction equipment
The best deal in the world won’t be worth much if you don’t properly maintain the equipment you buy.
That’s as true for used construction equipment as it is for a machine that’s brand, spanking new. Even so, things wear out. Or they break. Like a good preventive maintenance program, extended warranties provide financial and functional protection for your used construction equipment.
Offering extended warranties enables the dealership to provide a significant added value for customers, and it provides the dealership with another revenue stream. Here at ADI, we offer several types of extended warranties, so equipment purchasers can decide how much coverage they want – from the powertrain only up to the entire machine.
The key is buying wisely
Getting the most from used construction equipment starts with choosing the right machine. Teaming up with a reputable dealer ensures you’ll get sound advice and equipment that has already been carefully vetted. Nonetheless, it’s up to the buyer to check out the equipment, too. No used equipment will be perfect, but there’s a difference between light wear and tear and indications of neglect or misuse.
In the cab, make sure:
- The seat adjustments, dashboard features, sticks, controls, pedals, and steering all work properly
- Everything is clean and in good condition
- Operating the machine doesn’t reveal too many issues such as glare or vibration that will add up to driver fatigue or frustration
On the chassis, look for:
- Signs that the arms, locks, sprockets or tracks have been welded/repaired
- Leakage around the engine, pumps, hoses, rams, or hydraulic components
For the engine and transmission:
- Do a visual check of the engine to make sure hot, moving parts are properly protected
- Rev the engine, then check the emissions, listen for unusual sounds and note if any warning signals activate
- Run the tranny through its gears to see if they operate smoothly; listed for noises
- Look for leaks around the pump and swing bearing
On the tires or tracks:
- Look for bubbles or cracks on tires
- Use a tread gauge to check for uneven tire wear (this often indicates problems with the drivetrain)
- Make sure no tracks or bolts are missing
- Look up replacement cost for this machine’s tires or tracks, as these numbers vary and can have a significant impact on total cost of ownership
With the right machine, attentive maintenance, and an extended warranty, used equipment and owners are both well-protected. And that makes for a smart business investment.