Whether bidding at a live or online auction, or visiting a local dealer, previously-owned equipment can be a big benefit for a small business owner.
A local dealer may have used equipment on the lot, or may have connections to find the truck or heavy equipment you need. Start by using online marketplaces to locate the exact make and model of equipment – and in your target area.
If you are willing to travel or pay for delivery, the options for finding just the right used truck or other equipment are even better. Auctions offer buyers a variety of pricing options, providing more flexibility for compromise on price.
Buying used equipment can make good financial sense and be a cost-effective way to replace construction equipment while adding to a fleet of work vehicles. Finding these previously-owned pieces may take some extra work, but freeing up cash usually makes it worth the time and effort.
Views on Buying Used Equipment
1. Work With A Reputable Seller
So much information is available for buyers today from public records, the Better Business Bureau or online reviews that feature customer experiences with auction companies or dealers. For private parties selling the equipment themselves, make sure you are in personal contact and are comfortable with the seller before agreeing to the purchase.
“Ask for references if possible,” suggests Ryan Anderson, a vendor relations account manager at Stearns Bank’s Equipment Finance Division. “Lemon laws usually do not apply to private party transactions.”
2. Check The Title
The title needs to be “clean,” with no liens against the equipment that could prevent free and clear ownership. Search by the Vehicle Identification Number (VIN) or a Serial Number (SN). Many free, online options are available to assist in the search.
Each state’s Department of Motor Vehicles can also be a good resource. As part of its approval process, Stearns Bank checks into all titled equipment to ensure the transaction is valid.
3. Inspect Everything
From the machine’s history to the fluid levels to its performance, every detail should be considered. Look for hairline cracks, rust or other damage during a visual inspection. If repairs are needed, does the price reflect that? Ask about operating hours and how often the machine was used. Maintenance history is especially important if a vehicle has high mileage or usage hours.
“Do an evaluation or have the equipment appraised,” Ryan said. “Inspect the equipment closely or have it inspected by a qualified and trusted independent party. Find out why the equipment is being sold.”
You should also get inside the vehicle to check the interior and dashboard functions – even ask for a test drive.
“Don’t always take the word of the seller for face value,” Ryan said. “Ask to see the machine and see it perform.”
4. Trust Your Gut
If the deal seems too good to be true, ask more questions and dig deeper into the equipment’s history. Ryan reminds buyers to perform their due diligence. Also, confirm the terms of the sale. With auctions or private parties, typically there is no return policy.
Whatever approach you choose to find equipment, it’s important to explore your options and stay flexible with every part of the transaction. And, that includes agreeing on a price and deciding whether to finance or pay cash.
When you finance an equipment purchase, the repayment schedule is an important factor.
A custom payment structure can align loan payments with expected cash flow. This makes it easier for the borrower to make payments, while income is flowing in and cash is on hand.