Looking at Used Construction Equipment? Ask These 5 Questions

Picture this: Scrolling through a popular auction site, you see the machine model you’ve been considering has a price point you’re comfortable with, and it has under 1,000 operating hours. Before impulsively clicking the “bid” button, RDO Equipment Co. experts offer advice based on a favorable buyer’s market for used heavy equipment that they expect to continue well into the new year.

RDO Used Equipment Manager Austin Calavera regularly monitors auction inventories and used equipment values. Nearing the end of the year, he says it is a "buyer’s market," and expects this to continue for some months. However, Calavera reminds contractors that buying equipment at auctions is always "buyer beware." If the used machine breaks once they drive it off the lot, they will not have any recourse or person to call.

"A dealer will stand behind a customer when things go south. It may be cheaper to go to an auction, but the value a store adds is hard to put a price on," he said. "Any brand of equipment that doesn’t have good dealer support normally has poor market share in that area."

That’s not to say auctions and dealerships don’t influence one another. For example, when regional auction sites have become saturated with a particular machine model, dealers may consider reducing prices on their used machines on their lots, depending on demand. As dealers consider their current customers’ needs and help plan for future fleet investments, they may consider selling their older machine models at auction. 

RDO Equipment Co. compares used equipment prices to auction prices to ensure used inventory is priced at its actual market value, giving buyers the most value for their purchase. Calavera encourages prospective buyers to contact their trusted equipment dealer before considering bidding on available machines.

After contacting their trusted equipment dealer, used equipment buyers should ask these five questions when considering purchasing used equipment, even if market conditions change:

1, How Was It Maintained?  

Machines of any size or model conditions vary based on wear and tear from environmental factors. If a fleet manager or operator regularly scheduled maintenance or monitored a machine’s performance through Fleet Management Software (FMS), wear and tear could be normal or reduced.

Watch this episode of The Track, where RDO Equipment Inspector Jeff Ward explains the trade-in inspection process and tips to extend any machine’s lifespan.

2. What Size Machine Will Work Best? 

Pay more attention to machine size and fuel usage now more than ever. Some operators have selected a mid-size model instead of a larger size after a quick field demo. For example, if a mid-size excavator can move a similar amount of dirt in the same amount of production hours, then it may be worth choosing the smaller model to reduce fuel burn rate.

3. Does It Make Financial Sense?  

You’re still working on the job, but how will you “satisfy the expense” of acquiring another machine when we all are unsure where interest rates will go? The answer is to sit down with your accountant and be sure it makes financial sense. Contractors should also remember to check if that "new-to-you" machine will qualify for a Section 179 tax deduction if they purchase it before the end of the calendar year. 

4. Does It Qualify for an Extended Warranty? 

Some dealers may have a used machine that qualifies for an extended warranty. Understand the used machine's current condition and the maximum number of hours under warranty.

5. Does It Include a Service Package?

Dealers like RDO offer different service packages that equip operators with the parts, service or technical support to get the job done despite any challenge.