Tips on Buying New and Used Heavy Construction Equipment

What are the tips on buying new and used heavy construction equipment? The decision between new and used heavy equipment is based on your specific situation and what is best for your organization. This encompasses both short- and long-term inventory requirements for equipment. Each purchasing option has advantages and disadvantages.

The good news is that you aren’t alone in assessing these options, and you aren’t alone in seeking information on the advantages of buying new or used equipment. The worldwide heavy equipment market is huge, and many business owners are faced with the difficult decision of whether to invest in new machinery or buy used machinery. The heavy equipment business generates about $192 billion in revenue each year around the world. The United States has a 21 percent share of the market, or $40.3 billion. Caterpillar® has the biggest market share in the United States.

Cashman Equipment in Nevada, for example, is a Cat® dealer who knows the heavy equipment business inside and out. With years of experience in the construction and mining equipment industries, we are uniquely qualified to assist companies like yours. We’ll work with you to determine whether you should acquire brand new machinery or a good used machine.

Understanding the advantages and disadvantages of each option can be quite beneficial in providing you with accurate and practical information. After all, we understand how difficult it is to make a decision, which is why we stock both new and used Cat equipment. Finally, it’s your decision, and we want to make sure you’re making the best one possible.

Advantages of Purchasing New Heavy Equipment

In an ideal world, when money is no object, you would almost certainly purchase brand new heavy construction or mining equipment. You consider your company’s image and the professional impression you make by operating a new fleet that is gleaming and trouble-free. You’d have access to the most up-to-date technologies, as well as the “new equipment smell.” Here are some more reasons to buy new equipment:

• New machines are significantly less likely to cause you problems when it comes to operation. Routine maintenance expenditures are an inevitable aspect of owning heavy equipment, but your repair costs will be far lower, and for a much longer period of time, if you purchase new heavy equipment. For this reason alone, purchasing new machinery makes sense in order to maximize output while avoiding the risk of a failure and costly repairs. A fresh machine will start in the morning and work without complaint for the rest of the day. You can also rely on a warranty backup if something goes wrong unexpectedly.

• Warranty: While all new machines come with a warranty, not other manufacturers provide the complete and comprehensive warranty package that Cat provides. You can rest easy knowing that your Cat OEM Solutions Warranty is the finest in the heavy equipment business.

• Technology: Major technology developments in heavy equipment engineering and design occur on a regular basis. You will receive the most up-to-date high-tech developments when you purchase a new equipment. Used machinery is rarely equipped with the same “latest and best” features as new machinery. Compare the latest safety and comfort features found in today’s new Cat equipment, including telehandlers, wheel loaders, and used machines only a few years old. There is no substitute for new equipment’s superior technology.
• You get exactly what you want when you buy modern heavy construction equipment. Heavy equipment design and manufacturing skills are always improving, resulting in new models that outperform and execute tasks that previous machines can’t. Cat offers a diverse range of equipment, from little compact track loaders to massive scrapers and off-highway trucks.
• Tax benefits: Purchasing new machinery is a capital asset investment. As a result, the IRS permits you to deduct or write-off certain sums related to the purchase price of new equipment. Your machinery becomes a corporate asset, allowing you to take advantage of tax benefits. These tax savings could be a significant capital offset, making buying new fully worthwhile. Contact your accountant for assistance in analyzing the potential tax benefits.

The Drawbacks of Purchasing New Heavy Equipment

While there are numerous advantages to purchasing new and perfect heavy equipment, there are also some disadvantages. Let’s look at the opposing viewpoint to ensure you’re on the correct track and making an informed conclusion. If you’re serious about buying brand new heavy construction machines, here are some drawbacks to consider:

• New construction equipment comes with a hefty price tag. Some landscaping equipment, such as skid steer loaders, is reasonably inexpensive, but road-building equipment, such as articulated trucks, asphalt pavers, and vibrating drum compactors, is a large-ticket item that requires a significant capital outlay. You’ll need to arrange financing if you can’t pay the full amount up front, which means you’ll spend even more in interest and fees.
• Depreciation: It’s an unfortunate fact that new construction equipment depreciates far more quickly than secondhand equipment. Although there is no universal depreciation rate, your accountant will tell you that the resale value of new equipment drops faster in the first few years after purchase than in the middle and latter years of its life. The combination of harsh depreciation and an urgent capital expense may be more of a financial strain than you’re willing to bear. Another item to discuss with your accountant before purchasing new heavy equipment is depreciation.
• Purchasing new heavy construction or mining equipment is an investment with a return on investment. And you have to think about the return on your investment whenever you make one. When buying new, you may be compromising your overall return on investment by losing resale value due to depreciation and having your working capital tied up. This decision is based on your personal experience as well as advice from people you trust, such as your financial support team and equipment dealer. Finally, you’ll have to consider if the potential loss of an investment return is a significant factor in your decision to buy new.
• Another disadvantage affecting the new-purchase decision is availability. It’s one thing to browse the Cat store and be enticed by the vast array of machines like drills and draglines, as well as useful attachments like augers, backhoes, and brooms. Getting them in a decent amount of time could be something entirely other. Many new pieces of equipment are posted for sale, but they do not yet exist. Specialty items aren’t always in stock and must be ordered and then built. This could be months between when you decide to acquire new equipment and when it arrives. When you have to work, that could be an unacceptable time gap.

Advantages of Purchasing Used Heavy Equipment

• The secondhand heavy equipment market in America is alive and well, due to a large inventory of high-quality machinery from leading manufacturers like Cat. Even if you prefer new heavy construction or mining equipment, there are some advantages to purchasing secondhand that you simply cannot overlook. In the used Cat market, there are many great bargains to be found. Here are some of the most compelling reasons to consider purchasing old heavy equipment:
• Lower upfront costs: Buying used construction or mining equipment is less expensive than buying new, and in many circumstances, secondhand heavy equipment will generate the same amount of revenue for a fraction of the cost of new equipment. You could be better off putting the difference aside and reinvesting it elsewhere in your company. You may even be able to buy numerous used machines for the same price as a single new machine, allowing you to expand your fleet more quickly and complete more work.
• Depreciation is avoided: Depreciation on new equipment may be a big pain. Depreciation is unavoidable, but if you buy a used computer, someone else has already paid the high original cost. Whether you’re looking for a little skid steer or a large excavator, secondhand heavy equipment will not depreciate as quickly as new equipment, especially if you maintain it properly.
• Because used equipment does not degrade as quickly as new equipment, it retains its value, especially provided regular maintenance is performed. When it’s time to upgrade, you’ll have a far better chance of recouping your investment by selling secondhand equipment for close to what you spent for it.
• Greater selection: Used heavy equipment, ranging from boom lifts and backhoes to industrial loaders and compactors, is available nationwide. Thousands of used machines are available, ranging from older machines that can accomplish basic tasks to last year’s models that are likely as excellent as new at a fraction of the price. You’ll have a good chance of finding what you need if you shop the used machine market. You won’t have to wait months for your machine to be manufactured, and you’ll be able to obtain it when you need it. Flexibility can make the difference between putting a used machine to work immediately versus waiting for the inflexible luxury of new.
• Lower insurance costs: This is a benefit of secondhand equipment that you may not have considered. Because the value of your heavy equipment will be lower with a used machine, your insurance premiums will be reduced. Even if the machine is suffering typical depreciation, new equipment insurance will assess replacement cost at the new machine value. With a new machine, you’ll almost certainly overpay for insurance, whereas a used model would have its premium lowered.

The Drawbacks of Purchasing Used Heavy Equipment

“Buyer beware” is the best piece of secondhand equipment advise we can provide you. If you’re thinking about buying old heavy gear, make sure you do your homework and know exactly what you’re getting. You must also know from whom you are purchasing it. The following are some of the drawbacks of purchasing used heavy equipment from unlicensed sources:

• Stolen equipment: As with any sector, there are some shady companies out there selling heavy machinery. Some of it has definitely been stolen, which will give you far more distress than you can imagine. You must also be concerned about machine liens and the possibility of repossession. When you acquire used equipment from a respected dealer like Cashman, you don’t have to worry about any of the machines in the inventory being “hot” or “sought.”
• Bad condition: Be careful of the state of a used piece of equipment. You might be mechanically inclined or have a buddy who is a competent mechanic who can inspect the equipment before you buy it. However, working with an approved, reputable dealer with a reputation for honesty is the greatest way to get true confidence regarding a machine’s condition.
• Without a complete maintenance record and product history, you can’t truly tell if the used equipment you’re looking at is safe. You can end up with a machine that could cause property damage or possibly injure someone unless you buy from an approved equipment vendor with a true safety conscience.

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Who Buys Heavy Construction Equipment?

Buy Your Equipment buys all sorts of equipment such as backhoes, bulldozers, compactors, excavators, track hoes, telehandlers, forklifts, cranes, motor graders, air compressors, crawlers, loaders, drills, forestry equipment, oil field equipment, off-highway trucks, scrapers, skid steer, skip loaders, wheel loaders, dump trucks, tractors, trailers, and much more. CALL US today, 945-400-6965 to get the best prices on your used heavy construction equipment or visit buyyourequipment.com.

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