6 Advantages of Purchasing Pre-Owned Heavy Equipment

There are numerous advantages to purchasing secondhand construction equipment rather than new construction equipment, especially in today’s competitive market. One of the key benefits of purchasing old heavy equipment is the lower cost, but there are other benefits as well. If you’re a contractor looking to extend your capabilities with a new piece of heavy equipment, consider the following advantages of buying secondhand construction equipment:

1. Lower Initial Investment

One of the most obvious advantages of purchasing old machinery is that it is significantly less expensive than purchasing new machinery. When buying anything new, whether it’s a car, a house, or a piece of heavy equipment, you’re paying a considerable amount of the price for the item’s newness rather than its genuine value. Used heavy equipment, when properly maintained and repaired, can be just as beneficial to your business as new heavy equipment, but at a fraction of the cost. You’ll spend a lot less money upfront with used equipment, allowing you to get your firm up and running sooner while saving money for additional expenses like recruiting and training operators.

2. Preventing Depreciation Losses

As previously said, while purchasing new equipment, you are paying for its novelty. New equipment, on the other hand, will lose its novelty with time, lowering its worth. Depreciation, or the loss of value, is an unavoidable cost of doing business. Used items depreciate in value over time, however, the most significant depreciation occurs within the first two years of a machine’s life. You absorb the principal depreciation cost when you buy new equipment, which can be up to half of the machine’s cost depending on current market demands. Because the biggest depreciation loss has already occurred when you buy secondhand equipment, you can receive a newer piece of equipment without paying the initial sticker price.

3. Lower Insurance Premiums

Because new equipment is more expensive to purchase, it is also more expensive to insure than used equipment, resulting in higher upfront expenditures as well as higher ongoing costs due to higher insurance premiums. If something goes wrong with your new computer, you may find up paying more for insurance since insurance companies will calculate the replacement cost as though it were a brand new machine, even if yours has already depreciated.