In today’s market, there are numerous resources for buying used equipment — including auctions, local equipment distributors, manufacturers who take trade-ins, trade publications and used equipment websites.
Local equipment distributors are one of the most trusted outlets since most of them already have an established relationship with their customers. Distributors base their reputation on the equipment they sell, so they are less likely to sell unreliable equipment. They may offer a warranty on the used equipment they sell, and they have the capability to offer after-sale service and product support.
Auctions are another popular resource. You may like the excitement and atmosphere of a live auction, and you can usually find some great deals. However, the drawbacks of auctions are limited opportunities to inspect the equipment, and you are buying the equipment on an “as is/where is” basis — no warranty, and no one to support the equipment if you encounter a problem. To consistently be successful at auctions, you need to have an equipment expert on your staff (or who you can call upon) to inspect the equipment and advise you on how much to bid.
Manufacturers, like Genie, often take equipment on a trade-in thus making them a good source of used equipment. Because these companies are the manufacturer of most of the used equipment that they are selling, they will make sure that their used equipment is safe and ready to go to work before they sell it. Most manufacturers have a website featuring their used equipment that is for sale. For example, Genie’s parent company, Terex, has an online tool, www.terex.com/used, which allows you to access spec information, photos and MSRP on the used equipment for sale through Terex for all of its product brands.
Trade publications are another traditional form of locating used equipment. While these publications are a good way to find used equipment sources for future reference, or to check the value of a certain piece of equipment, the listings are not always up-to-date due to their long shelf life.
Why do rental companies purchase used equipment for their rental fleets?
Usually, it is to achieve balance in your fleet’s average age because you have a short-term need for a specific project. Another reason you might buy used equipment is because you have a limitation on how much you can buy due to either an annual capital expenditure limit or a limitation on the amount of equipment financing available to you. You might also buy used equipment because you have an experienced service department that does a good job of extending the productive life of your rental fleet equipment. Lastly, you may be able to, if you buy right, lower your depreciation and improve your bottom line. In analyzing the economics of buying used equipment, it is also important that you factor in the higher repair and maintenance costs that you will incur with used equipment.