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Although most businesses prefer purchasing brand new equipment, more and more companies have become open to secondhand alternatives. Used equipment has become a viable option for many reasons, but its popularity can be attributed to rising operational costs. Although brand new equipment may seem like the best investment, plenty of secondhand dealerships now offer quality products at much more affordable prices. This article outlines the criteria you must consider before purchasing secondhand equipment, and the steps you must take to ensure you are using your money wisely.
Find a Reputable Dealer
Prior to visiting a dealership, do some research on a variety of equipment vendors first. Online reviews, testimonials and business reports can be used to find the right dealer. A thorough background check on the dealership or vendor is also important. One way to do this is ensuring dealers are the registered owner of a given product before they sell it. Simply asking to see the original invoice can prove ownership which helps give the dealer credibility. Avoid dealers who are unable to provide proof of ownership, to reduce the chances of buying stolen or faulty equipment.
Consider Depreciation
Construction equipment depreciates the most within the first year of its sale. After this period, the value of a product drops by roughly 30%. After the initial decrease in value, the price of equipment typically stabilizes. As long as a piece of equipment is kept in good condition, value is likely to stay the same for years. When considering a secondhand piece, assess how old it is, if it has been sufficiently maintained, and how much the cost has lowered from the original price.
If your construction business wishes to sell secondhand equipment, many of the same principles apply. Perhaps you are unhappy with a product’s performance, although it still functions well. Reselling your equipment before it depreciates may be an option. If you are selling equipment within the first 12 months of its purchase, you can command a resale price near what you originally paid for. Keep records of repair work and maintenance as an added selling point to potential buyers.
Testing
Testing construction equipment is key in ensuring quality and longevity. If you are purchasing used industrial equipment, ensure that is good condition and operates well. If a dealer is confident in the equipment they are selling, they will be happy to let you test it out. For vehicles, ensure that the controls, pedals, sticks, steering and seat adjustments are all working properly, and test the dashboard features as well.
Inspection
In addition to testing how a machine operates, inspecting other important elements like the engine and transmission is also vital. Listen for any odd sounds, look for any emissions and possible warning signals that may seem out of the ordinary. Also, tires and tracks can show if a vehicle has been left alone outdoors through any bubbles or cracks. Prior to even purchasing a particular product, do research on how much repairs will cost as this can help guide your purchasing decisions, and identify what particular piece of equipment best suits your budget.
Leave a Payment Trail
Purchasing construction equipment, even secondhand, can be extremely expensive. When buying from dealers or private sellers, the best thing to do is have some kind of recourse if the equipment arrives in rough condition, or is not even delivered at all. Additionally, ask the dealer for a receipt, invoice or document that verifies the sale of the equipment. Avoid paying cash and consider paying by certified check or other means that leaves a reliable payment trail if any issues arise during the course of the transaction.
Further Considerations
With rising operational costs and the price of equipment continuing to increase, purchasing used construction equipment may prove to be a cost-effective solution. Unlike buying from manufacturers, doing additional research on individual dealers or dealerships is essential. Shop around and explore a variety of dealers and ask for quotes to determine what fair market value for a particular piece of equipment is. Go to dealerships directly, and don’t rely on photos online. Most importantly, inspect and test the piece of equipment when you have narrowed down your options. These guidelines will not only help keep your business on budget, following these steps will provide you with quality construction equipment for many years to come. Click the link for the latest construction strategy news.
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