Choosing between used or new heavy equipment usually depends on the best interests of your company, including the short-term and long-term requirements for equipment inventory. To make the best decision, you need to understand the pros and cons for each option, which are as follows.
Pros of buying brand new equipment
New machines are a lot less troublesome to operate. The routine maintenance costs and repair expenses will be a lot lower for a long time, as well.
You will enjoy maximum productivity, without worrying about expensive repairs and potential breakdowns. If something goes wrong all of a sudden, you can also depend on the machine’s warranty. Especially if you buy from trusted brands and distributors, such as Volvo and Topspot Heavy Equipment, a new machine is surely covered by a comprehensive and inclusive warranty package.
A brand new piece of heavy equipment also comes with the latest industry features. Heavy equipment manufacturers are constantly pushing achieving major technological breakthroughs in design and engineering. Although you might chance on one, you can rarely get the same advanced features when buying used equipment
Since it is considered a capital asset investment, buying new machinery grants you tax advantages. The IRS lets you deduct of write-off certain costs that are related to the new equipment purchase. The tax savings will be a significant capital offset, which makes it extremely worthwhile to purchase brand new.
Cons of buying brand new equipment
New construction equipment costs a lot of money. Some projects require major capital outlay investment, and if you cannot pay the full amount up front, you will need to pay even more in interest and fees.
New heavy equipment also depreciates far faster than a used one. Your accountant will advise you that resale values for new equipment drop rapidly within the first few years following the purchase. This depreciation rate, combined with the capital outlay, can be too much of a financial burden to accept. Even if you do accept it, you might be up for a low return on investment.
It also takes considerable time before you can lay your hands on the new equipment you purchased. Most new machinery that are listed for sale do not actually exist yet, and have to be ordered before construction. The gap between your purchase and the delivery date usually lasts several months, which might be unacceptable for the projects you have at hand.
Pros of buying used equipment
The upfront cost for used heavy equipment is a lot lower than a new one. For the price of a brand new machine, you will be able to buy multiple used machines, and quickly expand your fleet.
If you take good care of used equipment, it will depreciate much slower than a new one, and even hold its value when you need to sell it for an upgrade. You also get the equipment as soon as you buy it, and pay lower insurance premiums.
Cons of buying used equipment
There are unreliable businesses that sell stolen heavy equipment. You will have to worry about liens on the machine, and waiting for repossession. Unreliable dealers also tend to sell equipment in bad condition.
When buying used equipment, ask for its maintenance record and history. Without these documents, you might end up with an unsafe machine that can cause costly damages and injuries.
Buying new machinery is not an easy choice. Whether you buy a new or used heavy equipment, make sure to transact with reliable businesses. Consult everyone in your company before making a decision, so you can settle for the best heavy equipment with a light burden.