Purchasing construction equipment, whether it’s new or new-to-you, is a significant investment and one that might be out of reach for small companies. You have two options to add a new piece of machinery to your fleet — buying it new or purchasing refurbished, previously owned equipment. Which is the best option? Let’s take a closer look at the pros and cons of each of these choices and help you decide which one is right for you.
New equipment: Pros and cons
Most people, when they start looking to add to their equipment fleet, default to purchasing new machines straight from the manufacturer or from a licensed seller. While doing so is an option, it does have its pros and cons.
- Pro — You know where the equipment is coming from: You never have to worry about whether or not your equipment has been taken care of during its life when you’re purchasing new equipment. It comes straight from the factory, with a minimal amount of mileage accumulated during shipping. It’s ready to go, out of the box.
- Con — The price is always higher: Without exception, new equipment is always going to be more expensive than a used alternative. This is because as soon as your equipment leaves the factory, it starts to lose value.
- Pro — It comes with an extended warranty: If your equipment breaks down in the first year — or the first five years, depending on how extended your warranty is — it’s the manufacturer’s responsibility to repair it. This setup could potentially save you hundreds or thousands of dollars in the long run.
- Con — You may need new training for your workers: New equipment with updated controls may require further training to make sure everyone knows how they work. This issue could take some time out of your regular work schedule to implement new training.
If you’re purchasing heavy equipment that will be getting a lot of use, it might be worth it to invest in a new piece of machinery. If you need to purchase a specialty piece that won’t get a lot of use, a used piece of equipment might give you more bang for your buck.
Used equipment: Pros and cons
If new equipment seems out of your reach because of excessive costs, used equipment may also be an option. Let’s check out the pros and cons of purchasing used construction equipment, whether you’re looking for large or small machines.
- Pro — Lower overall cost: Depreciation reduces the resale value of your new equipment, but it also lowers the price of used pieces. Large or small, used equipment will always cost less than new.
- Con — Incomplete maintenance histories: A complete maintenance history is a rare thing when you’re purchasing used equipment, so it might be impossible to know whether a machine has had any major problems.
- Pro — No need for new training: Picking up a used version of your current model reduces training time because your crew will already know how to manage the controls.
- Con — Lower resale value: You can resell used equipment, but you’ll never end up making your money back on that sale. You wouldn’t with new equipment either.
For small businesses, used equipment is a great option. If you purchase your equipment from a licensed reseller or marketplace, you can be sure that even though it’s used, you can get plenty of life out of it.
Making the final decision
Now that you’ve had a closer look at all these pros and cons, what do you need to know to make the final decision? Take a look at your budget, the amount of life you expect to get out of each piece of equipment and how much you need a warranty. Used equipment can serve you well, but if you’re planning on putting a lot of miles on your new tool, consider investing in new machinery.
This article was written by Megan Ray Nichols. If you enjoyed this article, please visit her website Schooled by Science.