Benefits of Buying Used Construction Equipment

Construction equipment is a considerable investment. As such, firms and contractors should carefully consider their options to find the best solution that works for their specific needs. One consideration that can be helpful in virtually any situation is buying used equipment. 
Buying new construction equipment has many advantages, such as access to the latest features, but it’s not always the best option. Used machinery, while certainly less eye-catching than its newer counterparts, has several advantages of its own. Here are five of the most significant of these benefits. 

  1. Lower Upfront Costs

The most obvious benefit of buying used construction equipment is its affordability. Prices of previous models drop as new ones come out and sellers can’t reasonably sell preowned machines for more, given their depreciating value. Consequently, you may pay far less for used machinery than similar new options. 
These cost savings are crucial in the construction industry. Research suggests that as many as 75% of construction projects are over budget, with an average of six budget changes over the project timeline. Given how common it is to exceed estimates, firms need to save money wherever possible. 
You can’t anticipate every budget change, as many arise from accidents or other unforeseen situations. However, if you lower your expenses going into the project by using used equipment, these disruptions will have a smaller overall impact. 

  1. Reduced Insurance Rates

Used equipment can save money in more areas than just lower price tags. Some ongoing expenses, like maintenance, may be higher for older machines, while others, like insurance, will be lower. These additional savings can further help projects stay within their budgets. 
Newer equipment carries a higher replacement cost, so its insurance premiums will be greater, even after experiencing some depreciation. By contrast, insurers value used machines differently, so you won’t pay as much if something goes wrong. Given how common accidents are in construction, that’s a considerable advantage to have. 
Used equipment may also be less complex, lacking some of the most technologically advanced features. As a result, they may be easier to repair and replacement parts are more widely available, further reducing insurance premiums. This will also lower repair costs if something happens. 

  1. Higher Resale Values

It may initially seem counterintuitive but used construction equipment can offer a better resale value. Newer machinery may sell for more, but it's worth drops quickly. As a result, selling relatively new machines when you no longer need them will come with higher losses than selling older ones. 
Most depreciation happens early in the equipment’s service life. Vehicles typically lose 20% of their value within the first year, losing 60% within the first five. Consequently, if you sell a used machine five years after buying it new, you may only be able to get less than half of what you paid for it. 
By contrast, the bulk of the depreciation has already happened by the time you buy preowned equipment. As a result, when you resell it, you can sell it for closer to what you paid, minimizing your losses. 

  1. Fewer Delays

Another benefit of buying used construction equipment is the shorter time frame. Purchasing new machines may involve ordering them from the original manufacturer. That can mean you must wait for them to assemble and ship it, which can create long delays. 
As construction demand surges, equipment manufacturers may struggle to fulfill orders. These inventory problems may mix with larger supply chain issues to exacerbate delays. On the other hand, preowned equipment is already in stock and may not have to travel as far, so it’s not as susceptible to these disruptions. 
When you get equipment faster, you can take on new projects and expand your business more quickly. In that way, buying used equipment can lead to shorter project timelines and more rapid growth. 

  1. Sustainability

Buying used construction equipment can also help firms become more environmentally friendly. More eco-friendly projects will gain favor as the need for sustainability becomes more apparent, but the construction industry has a poor track record with the environment. As much as 40% of energy usage and 23% of air pollution comes from the sector. 
Zero-emissions construction equipment should be firms’ ultimate goal but buying used can help reduce carbon footprints in the meantime. Manufacturing new machines uses a considerable amount of energy and depletes the world’s resources. Consequently, lowering the demand for new machinery can reduce the sector’s overall impact on the environment. 
Relying on used equipment also keeps these products and their materials out of landfills or energy-intensive recycling plants. Zero-emissions alternatives may not become accessible for a while, so using preowned machines can help you stay as eco-friendly as possible. 

Considerations for Buying Used Construction Equipment 

You should keep some factors in mind to capitalize on these benefits. Preowned equipment comes with different considerations than new models, so firms must understand these to make the most of their purchases. There are three main factors to consider when buying used construction equipment: 

  • Seller reputation 
  • Price 
  • Equipment service history 

First, construction firms should review potential dealers to ensure they’re reliable. Checking return policies, customer reviews, and third-party auditors like the Better Business Bureau can help verify sellers. 
Next, you should compare prices across multiple vendors. Even though you’re buying used equipment, it can be helpful to check what the machine in question cost when it was new. This provides a baseline of what to expect. Take that price and add a few years of value depreciation to determine a fair price. 
Finally, it’s important to review a machine’s service history. Frequent repairs and breakdowns may suggest larger problems that could incur higher ongoing costs down the line. By contrast, few issues but a history of regular maintenance means the equipment could last you a while. 

Used Construction Equipment Has Many Benefits 

Buying used construction equipment can reduce upfront and ongoing costs, streamline project schedules, minimize losses and improve sustainability. Given these benefits, preowned machines should be a consideration for any construction firm. 
When you know what you can gain from this equipment, you can make the most informed, strategic decision. You can then ensure your current and future projects meet your expectations and those of your clients. 

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