Buying Used Heavy Duty Equipment

The construction business is one of the most capital-intensive businesses around. However, this does not deter most construction businessmen with limited capital from engaging in the business, become creative in handling their finances, and be successful. One case in point: they go out and buy used heavy equipment, rather than buy brand new machines for their business needs.

In construction, the main instruments are the company’s heavy equipments – cranes, bulldozers, backhoes, lifts, trucks, loaders, skid steers, excavators, drillers and whatever monster machines they own and operate to move massive objects and materials around.

These are the lifeblood of the company, the machinery and equipments that literally run their businesses and make it go. Unfortunately, these huge machines are some of the most expensive set of investments a construction company can have. Moreover, buying new construction machinery requires a long time to regain the investment.

Unless the company is very rich and big, acquiring brand-new models could practically take up around 90 to 95% of its capital, assuming that the company has that much amount to spare as capital to begin with. The reality, of course, is that most of the mid-sized construction companies in the country (and in the world, for that matter) operate on very tight budgets.

Whatever would be left of their budgets after such huge outlays for heavy equipment, in most cases, cannot sustain their operational finances even for short time periods. What to do, then?

Solution: buy good used heavy equipment to run the business, and be liquid enough until the next payments come in.

Prices

For comparison, a brand-new crane would cost an average of $250,000. A used crane for sale is around $75,000. For cheaper machines, a new excavator would cost around $25,000 while a used one can be had for around $15,000. New models of skid steers cost about $25,000 while a used one is around $6,000-$10,000.

However, some machines are quite expensive. Dump trucks would set back any company some hundreds of thousands of dollars, and for a really big heavy truck, the cost could go up into millions of dollars.

Some used trucks could sell around $3,500, depending on the size of the truck you need. Some really big ones have a set of tires that can cost around $40,000. Sometimes, it could be more economical to buy a used truck than to buy a new set of tires.

Notes in buying

Used heavy equipments could very well be the solution to the temporary financial problems of the company, but it could work the other way around if one is not careful. The following are some notes in buying used machines.

Visual inspection is not enough. It is always good policy to first test the equipment. Even if it had been refurbished and had passed technical reviews and certified good as new, have the machine go through whatever functions it was supposed to do.

After the test drive and sample operations, test for leaks. Inspect the valves and hoses. Listen to the running sound of the machine for some time. Check for peculiar smells like shorted circuits or burning oil. If it is newly-painted, inspect for rusts in suspect areas.

Are all the controls still functioning? How does the sound of the hydraulics go? Are the displays working? Minor damages are a given in used machines, which adds up to the reason for the low price. This, however, should not mean that certain damages to the equipment will endanger and risk the safety of the operator.

Finally, buying used heavy equipment from reputable dealers is better in the long run than buying from owners. It is good policy never to buy from people who do not know anything about construction equipment. Dealers can give warranties unlike owners, and they are more flexible with pricing and negotiations. All these will redound to company savings, which is the primary reason to buy used heavy equipment in the first place.