USED HEAVY EQUIPMENT: TIPS & TRICKS FOR USED EQUIPMENT BUYERS
- Tips & Tricks
- Used Equipment
Are you in the market for used heavy equipment?
Maybe you’ve been buying equipment for years, or maybe it’s your first time around the block. Regardless, buying used can be a smart financial move for your business. However, it can also be overwhelming, frustrating, and even risky if you don’t know what to look for.
From research to inspection, this article will walk you through all the steps, tips, and tricks to know in advance to make an informed decision on your “new” used equipment. So, grab a cup of coffee or a Redbull – let’s dig in!
What are the benefits to buying used heavy equipment?
- Cost savings: During an economic recession, comparing expenses and ROI is at the top of everyone’s mind. Since used equipment is typically less expensive than new, buying used can usually save some extra cash.
- Availability: It’s no secret that many heavy equipment OEMs have had long wait times for new equipment to roll on the lot. After Covid and the supply chain issues that stemmed from it, used construction equipment is often more readily available than new – allowing you to hit the job right away rather than waiting on that shiny new machine.
- Familiarity: Especially if you’re buying to replace a previous piece of equipment, you can often be confident that you’ll have a greater selection of used in comparison to new. Meaning you’ll likely be able to be familiar with the equipment already versus buying a new machine with new brands, models, and components to adjust to.
- Depreciation: Just like buying a car, heavy equipment’s value depreciates over time. While this is just a natural process and cost to doing business, buying used can reduce the amount of depreciation loss you would see buying new. In other words, you won’t be paying for its newness.
Of course, there are many benefits to buying new heavy equipment as well, but that’s a blog for another time!
in the rest of this article, we will hit on important questions to ask while buying used construction equipment and steps to take to mitigate your potential risk.
What kind of use heavy equipment can you find?
When shopping for used equipment, you will see all types of machines that have been used for various purposes.
You will see used excavators, used dozers, used wheel loaders, used skid steers, used tractors, and just about any other used machinery you can imagine! The used heavy equipment you find will be from all the major manufacturers like Caterpillar, Bobcat, Komatsu, John Deere, Kubota, and SANY.
So, whether you’re looking for used farm equipment, used construction equipment, or anything in between, this article will help guide you in the right direction for what to look for in buying used heavy machinery.
So, where can you buy used heavy equipment?
- Equipment Dealers:
- Construction equipment dealers often sell and rent new and used equipment. They work with contractors, builders, and operators to determine the right equipment that fits their needs.
- General Contractors and Subcontractors within the engineering, procurement, and construction industries all use different types of heavy equipment. And oftentimes, they’re willing to sell their used equipment for the right price. Whether they’re trying to buy new equipment to replace their used machines, or they simply don’t need that specific piece anymore, contractors can be a reliable source for buying used equipment.
- Auction Houses:
- Used construction equipment can often be found at auctions. Auction houses across the country open bidding on machinery and award it to the highest bidder. However, you only want to go this route if you really know what to look for. Read on for the risks associated with auction purchasing...
Should I buy from a dealer, contractor, or auction?
Buying from a Dealer or Contractor?
The great part about dealing with contractors and dealers when it comes to used construction equipment sales is there’s always room for negotiation. And 99% of the time, you’ll have known history about the machine too. This means you should have room to buy for less cost than what’s initially presented, and you’ll have the peace of mind to know where it’s been and what it’s been doing over its lifetime as well.
However, when buying from a dealer or contractor, it’s incredibly beneficial if you can go in person and see the machine before buying. While photos and videos often do the trick, if you can visit the branch or site in person, you’ll be able to see how it runs and inspect the machine from all sides to make sure you know what you’re in for. The benefit to purchasing from a dealer specifically is that you’ll have a service team you can go to for support in breakdowns or services as well.
Buying from an Auction?
Especially if you’re new to buying used heavy equipment, might want to rethink that idea. The dangers of buying from an auction primarily stem from the fact that you won’t know the history of the machine. Auctions sell machines as is, no matter what. In other words, the machines come with an invisible sticker that reads, “buyer beware.”
Almost always, you’ll have to be ready to do mechanical work to fix issues and replace parts on machines that come from auction, which already means your dollar amount is on the rise. While you can almost guarantee a low price on auction machines, just remember that it’s a game of high-end gambling, and it’s crucial to do your research on the machines beforehand.
There’s always a certain level of risk in buying heavy equipment. Equipment breaks down, needs new parts, and has to be regularly serviced in order to stay in the best shape. Having a team behind that can support you in those breakdowns, like a dealer with a service side of the house, provides peace of mind and trust that you’re in good hands.
What to know about a used machine before purchasing it?
- Mechanic work track record
- Component types and brand of engine
- Ease of serviceability and parts availability
- Number of hours
- Length of standard warranty still available (if any)
- Primary work environment / geographical location
- Use case / Application
Why does the machine’s previous application matter?
Different uses cases cause different amounts of damage to heavy equipment. A machine can work the same amount of hours in two different applications and environments and have two very different levels of wear and tear which affects the longevity of its lifetime. Depending on the previous application of the machine, you could be looking at time and money poured into mechanical work, body work, paint jobs, electrical jobs, and more.
Some of the most abrasive applications for machinery are as follows:
- Rock quarries and mining work
- Machinery tends to get beat up more easily, and there’s a higher chance for necessary body work.
- Demolition Work
- This one goes without saying. Demolition work can have serious damage to the body of the machine, and any hazardous materials can corrode the metal.
- Beach reclamation and port work
- You may think machines working on the beach would have a nice, relaxing life. Truth is, it’s brutal work for heavy equipment. The saltwater causes damage such as pitting corrosion and galvanic corrosion that increases the speed of depreciation and shortens a machine’s lifespan.
- Phosphate mining
- One of the most destructive applications for machinery, phosphate mining and production quickly corrodes heavy equipment due to its harsh minerals.
Some of the easier applications for heavy equipment can include:
- Farming work
- A machine that spends most of its time on softer ground and grass will elongate the lifetime of tracks, tires, and treads.
- Civil Work (Road Work)
- While the initial start to civil engineering and construction can be rough on machines, it can be far less damaging in comparison to other applications.
- Residential Work
- As with civil work, residential work can be tough at the start, but gets easier on the machine as you get further in the process. Often working in yards and on streets, these machines typically see less damage to undercarriages and require less overall bodywork in comparison to some other uses.
What to research about the equipment seller prior to buying?
- How much information is out there on the company?
- Does the company have a website that is reliable and trustworthy?
- Is the business Google verified?
- Are there previous customers who trust the company or references you can ask?
- Let’s face it – the construction industry is a niche one and word spreads fast. If a company does what’s right or wrong, those in the industry are going to know about it.
- If you haven’t heard of a company before, ask around and see if you know anyone who has.
- Search for online reviews about how the company does business and their customer service.
- Or, just ask the company for references or previous customers.
- How much history are they able to tell you about the machines?
- Do they willingly provide thorough information on machinery?
- Are their photos clear and high quality?
What questions should you ask the seller before buying a piece of used heavy equipment or construction equipment?
What can you tell me about the machine’s history?
- What previous maintenance and mechanical work has been done to the machine in the past?
- What’s its track record for maintenance and component history?
- What application has it been working?
What region was the machine working in?
- Certain regions are easier on their machinery than others.
- Regions that are warmer year-round are tougher on their machines. The equipment is able to be run throughout a larger portion of the year, and therefore adds more hours and wear and tear to the machine.
- Regions that have varying seasons and get colder during winter months will be easier on the undercarriage and have fewer hours due to the fact that they won’t likely be used year-round.
What application was the machine working in?
- See note above.
What engine does the machine have? (And other components?)
- Not all models of the same brand will have the same engine. For example, Peterbilt trucks can have varying engines.
- While it may cost more to buy a machine with a common engine, you’ll have a higher likelihood of being able to find parts and service to support in the future which will save money in the long-term.
How easy is it to get parts and service for the machine?
- Does the machine have common components? Will the necessary parts be readily available to you? If not, it might be a fight from the start.
- At the end of the day, if you can’t access the parts and service you need, you won’t be able to get the machine to work. And if you can’t get the machine to work, none of the rest of it matters.
Can you verify the hours on the machine?
- Can you send me a picture of the hour meter?
- Warning: it is possible to change the hour meter reading. Don’t trust the hour meter alone to verify the number of hours on the machine
- See if the seller can hook up to the machine to show the hour reading to ensure it is the same as on the hour meter.
Ask for high-quality pictures and videos of the machine
- You want photos that are detailed, close-up shots of all angles of the machine and the main components as well.
- While pictures can suffice, you’ll be able to tell a lot about a machine if you have a video of it running as well. For example, a photo of the machine might not show it blowing smoke like a video might!
Can they send pictures of oil samples?
- While this might be a little less important in terms of buying used equipment, it can say a lot about the machine and the seller when trying to make up your mind on a purchase.
- It’s not always possible to get access to a history of oil samples, but if you can get it, it can help.
- If all the oil samples come back perfectly clean, it tells you they recently flushed the oil – and if it’s a high-hour machine, you should question why the oil was just changed.
Is there any warranty left on the machine?
- Is there any standard warranty left, and if so, when did the warranty start? It’s not uncommon for used machines to still carry a warranty. Asking about any warranty that might be left could help save you money on maintenance and again provides a level of peace of mind.
- Is the warranty transferrable? Not only will this help you understand whether you’ll be able to keep the rest of the standard warranty but could also apply to you if you will be selling the machine within the timeframe of the warranty.
- Aftermarket extended warranties are sometimes available for powertrain and transmission. These warranties are discretionary based on the number of hours, age of the machine, etc.
Feeling good about making your purchase? Here are a few last tips before bringing that used piece of heavy equipment into your fleet!
- Go see the machine!
- Photos and videos are great, but you’ll always make the most of your money if you can see the machine in person before making the purchase.
- If you personally can’t make the trip, try to have an inspector or mechanic look at the machine before buying.
- What will freight be?
- It’s no secret that freight has skyrocketed with the price increase on gas in recent years. Before making the purchase, check and see what a range might be for transportation.
- Depending on where the machine is located in comparison to you, it’s important to keep freight costs in consideration.
- Ready to wire money? CALL AND VERIFY
- While the world is full of good and honest people, the few bad ones can ruin the bunch. Unfortunately, a rise in wire fraud has intoxicated this industry in recent years, and a call and confirmation on wire transfer instructions could save you from a detrimental mistake.
- Again, before sending money, call and verify wiring instructions.
At the end of the day, whether you buy used or new, or rent your heavy equipment, the most important piece is that you find a machine that fits your needs and sets you, your team, and your company up for success. At Newman Tractor, we are here to support you in your heavy equipment journey from search to service and everything in between.
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For more information on buying used heavy equipment and to access a checklist for inspecting used machinery, download our Ultimate Guidebook!