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.

4. More Options
The used heavy equipment industry is huge. Because used equipment is in more demand than new equipment, it stays in circulation at a faster pace than new equipment is developed. The global market value for old heavy equipment is expected to reach approximately $90 billion in 2020. This means that the used market will continue to have a considerably larger assortment of equipment than new inventory. When you look to the secondhand heavy equipment market, you’ll have a higher chance of obtaining the correct equipment for your business at the right price.
5. Contracts with more flexibility
Construction is a fiercely competitive industry, and contractors must remain adaptable in order to complete more contracts faster. You can easily buy a suitable machine for a prospective project using old equipment and then resell it once the contract is over. Because there are frequent wait times for new orders, you could not find this flexibility with new equipment. In addition, compared to purchasing and reselling new equipment, buying and reselling used equipment in a short period of time will result in less depreciation.
6. Increased Uptime
When purchasing old equipment, look for machines that you or your operators are already familiar with, as they will have the same or similar controls and technologies. When purchasing new equipment, you will almost certainly be confronted with a new generation of technology, which will require some training. Purchasing old equipment might increase uptime because it may require less training.