The purchase of construction equipment for your company represents a significant financial investment, as well as a time investment when you consider all the research and planning you need to put into the purchase. If you are uncertain about whether or not purchasing new equipment is the best option for your business, you can instead purchase used equipment to save your business some money.
Here are just a few of the primary advantages associated with buying used construction equipment rather than completely new equipment.
You’ll save money
This is the most obvious advantage associated with buying used rather than new, and probably the single-largest reason most companies decide on used equipment. After the first use of any type of construction equipment or heavy machinery, its value plummets by anywhere from 20 to 40 percent on average. This means you can find a lightly used piece of equipment for significantly less money than you’d purchase a new one. The machine will be just as effective at completing its designated task, but because it’s already been used, it will cost you much less.
In addition, other expenses such as insurance, taxes and interest charges all afford you savings opportunities over new purchases. Used equipment is less expensive to insure, and having to finance less of the purchase will result in you paying less in interest in the long run.
You’ll get better resale value
If you decide to sell your equipment after a certain period of usage, you’ll find much better return on investment for used equipment than new equipment. This is primarily because used equipment avoids the immediate 20 to 40 percent drop in value we mentioned previously that new equipment experiences as soon as it’s used for the first time.
While you will still not be able to recoup the entire dollar value you paid for your used equipment, you can at least feel secure in the knowledge that the difference between your purchase price and selling price will be much smaller than what it would have been had you bought new.
More efficient purchasing
Purchasing new equipment might require you to wait for your equipment to be manufactured, if you have specific needs for your purchase. If you decide to buy used, however, what you see is what you get; you’ll know the exact options you have available, and can base your decision making on that. You’ll then be able to take your equipment with you immediately rather than having to wait weeks or longer for manufacturing.
These are just a few examples of some of the biggest benefits that come from purchasing construction equipment used rather than brand new. For more information about financing purchases of used construction equipment, we encourage you to contact our team at Patin and Associates.