I am often asked by customers, “When is it best to purchase a NEW piece of equipment versus USED for their upcoming needs? Here are a few preliminary questions I often ask them to get them started:
- Will the equipment they are considering be used to create a new product not yet market proven, or will it be replacing an existing machine already with proven product sales?
- Will the items they are considering be expected to increase existing production rates or remain equal but with additional features to ease daily operation and maintenance?
- Will they be considering any specific brand/manufacturer, or is this open?
Usually larger organizations have already asked themselves most of these necessary questions ahead of “kicking the tires” in person. They have a good idea of the direction they will be going. Although, with today’s vast resource of internet research, one is still often left confused and sometimes discouraged when they come across a varying range of prices within territorial, established markets.
This poses the question should we consider a slightly used machine or stick with a New one that has a warranty, service, and localized application support?
With this in mind, it brings up another list of considerations that add to the confusion for both the Little Guy and the Large Multi-Location Groups:
- Where do I consider buying my replacement machine?
- Local Dealer
- Out of State Dealer
- Direct from the Manufacturer
- Private Sale
- Too good to be true, As-Is, No Warranty
- How to determine fair value?
- Are trades considered?
- Is it hard to find lending organizations if necessary?
- Are there any review/statistics resources available?
- How old is too old?
- Does age effect financing options – check with your preferred lender
- Maintenance and Production Logs/History Records – Do I let hours of operation affect my decision?
- Are parts still readily available?
- Can I purchase any type of warranty?
- Are Extended Factory Warranties available (what is included) or aftermarket (what are the exclusions)?
- Do I have a qualified service provider available nearby to provide support?
- Have you discussed with your local support providers about helping you without them having any bias should you make a deal on equipment outside of their organization?
- Will a local provider have personnel available who are trained to support a machine outside of their wheelhouse? Can and will they work alongside whoever would be an authorized manufacturer’s representative, in effect becoming a middleman?
All of the above items play a critical part of that decision-making process often overlooked when purchasing a new to the operation piece of equipment. Not only that, we didn’t even cover the machine’s productivity statistics and features which is another complete process in and of itself. Often times the entire process takes an outside consultant, preparing a feasibility study, before all the pieces fall into place to make buying that equipment a long-term success.
Questions? Tim Holmberg firstname.lastname@example.org
Tim Holmberg is a life-long member of the heavy equipment manufacturing and service industry who has worked to solve challenging problems in the Aggregates and Mining industry for more than 20 years. Tim’s experience in helping producers with innovative solutions to their daily equipment and production challenges, has earned him the reputation of being an expert troubleshooter. Tim’s column offers our readers the opportunity to find answers to nagging problems that face producers on a daily basis. In this role, Tim does not endorse any product or service and this column is offered as a free service to NAQN readers.