There’s never been a higher demand for machinery in the US.
Consider the construction industry.
$1.23 trillion dollars was spent on construction in 2017 and accounted for 7% of total GDP in the country. A large proportion of those costs will have been on equipment and machinery.
But good-quality new machinery comes at a price. Depending on the project, the costs can easily run into the hundreds of thousands of dollars.
Buying used machinery offers a cheaper alternative that can save you masses of money.
Want to find out exactly how second-hand equipment relieves the pressure on your purse strings? Keep on reading.
7 Reasons Buying Used Machinery is Better Bang for Your Buck
Machinery doesn’t have to cost as much as you think. Here’s some more info on buying second-hand equipment.
But for now, check out the following 7 ways that buying used equipment offers more bang for your buck.
1. It Costs Less
New machinery is expensive. You pay a premium for buying anything fresh off the assembly line.
Sure, there are benefits to doing so. For instance, it’ll come with a guarantee (though most used machinery from a dealer will do too), you can be sure it works, and there’ll be no signs of wear and tear.
But it inevitably costs more. You can save yourself thousands by purchasing second hand. This is important for cash flow and frees up capital to spend elsewhere.
You don’t necessarily sacrifice on quality and safety standards either. Good quality machinery is built to last. If it has been well maintained, you shouldn’t have a problem with used goods.
2. It Avoids Initial Depreciation
As with new cars, new machinery loses value fast in the initial 12 months.
It’s common to see double-digit depreciation. The rate slows in the years after. Nonetheless, you’ll never get your money back if you decide to sell.
This isn’t the case with used machinery. Sure, buying something that’s a year old will see it depreciate over the coming years. But it’s nothing like what you’d experience from a new purchase.
Furthermore, well-maintained used machinery of a certain age will hold its value over time. This means you could get your money back on a 5-year-old piece of kit that you sell a few years later, for example.
That just isn’t possible when selling something you bought new.
Consider loan repayments on new machinery too. Unless you’re cash rich from the outset, you might need a loan for anything new, shiny and big! With typical rates of depreciation, you could end up owing more than your kit’s actually worth.
3. It’s Available Immediately
It can take time for new machinery to get to you. There can be a lag between purchase and delivery.
One reason for this is when your newly ordered equipment requires manufacturing. This is fairly common for significant purchases.
Manufacturers wait for an order before making the product. They get the funds (or a proportion of them) upfront to cover manufacturing costs and/or ensures their investment of time and money isn’t wasted.
By contrast, used machinery is ready and waiting for you. You can buy and start using it the same day.
4. It Opens Up Bigger Jobs, Quicker
The accessibility of used machinery has multiple money-making implications.
For one, it means you have instant access to larger jobs. Machinery opens you up to higher-earning projects.
After all, you can do things you couldn’t previously. However, the wait for new goods necessitates a delay in taking on such jobs.
Walking away with your used machinery on the same day enables you to get started immediately. Begin earning the bigger bucks straight away.
5. It Sidesteps Shipping Issues
Shipping of new machinery is another potential cause of delays and costs.
Manufacture’s done. But now it’s got to get to you. Your equipment may even have been made overseas. It can take a considerable time to arrive.
Of course, buying what’s already made and in situ means you sidestep the problem. You save money on shipping costs and begin work sooner.
6. It’s Open to Inspection
New machinery always looks good in a catalog. But things can look (and function) far different in reality.
Used machinery can be viewed in situ before committing to a purchase. You’re able to see it in action from the seller.
You can touch it, listen to it, and look at it. This can save you from post-purchase troubles down the line.
Sure, you can often do this with new equipment. But remember that a) you’re paying a premium for it, and b) you’ve never seen it in action. Even brand new items can experience setbacks.
7. It Saves on Insurance Costs
Buying second hand can also save money on insurance.
Premiums are usually decided on how much it would cost to replace the equipment (as opposed to how much you could sell it for). New equipment costs more to replace, which raises the premiums.
As an aside, you should ensure your used equipment for its replacement value. You could choose to insure against its cash value. However, remember that the equipment depreciates (even when it’s second hand).
Cash value insurance will only pay out for the depreciated figure.
Time to Start Buying!
There you have it: 7 reasons buying used machinery gives you more bang for your buck.
The demand for machinery is higher now than ever before. But the sky-high prices of new equipment can be out of reach for some. Second-hand machinery is one way to get around this problem.
First off, it costs less straight off the bat. This is because new equipment loses its value fast, compared to used goods. These hold their value and can get you your money back upon sale.
Furthermore, used machinery is available immediately. This enables you to start earning money from bigger jobs straight away and saves the hassle of shipping. Finally, you can inspect your purchase in situ, and save money on insurance costs too.
What’s not to like?!
Did you enjoy this post? Be sure to contact us with any of your questions or suggestions!
