If you are thinking of investing in new machines and plant for your particular industry or you already have machines in your fleet and you would like to add to them, then you have two choices to make here. One is to buy what you need outright brand-new and the other is to consider purchasing machinery that is used. There are pros and cons for each and it is important that you consider both of them. Depending on your current financial situation and your expectations with regard to contracts that you are currently working with and contracts that you hope to take on in the future, it might be best to consider investing in used machinery.
If you have it in your head that buying a new state-of-the-art excavator is the right choice then you should know that it is going to be a much higher initial cost to purchase something new and you need to figure out if it is going to be able to pay for itself and provide you with a satisfactory return on your investment. Buying used construction equipment rather than new equipment might be the one way to keep your business competitive and so the following are just some of the many pros of investing in used plant and machinery.
- Less cost upfront – When you are buying used plant and machinery, it is fairly obvious that you will be able to buy it at a much lower price than something brand-new. It is entirely possible to pick up a quality used piece of heavy equipment like a forklift, that has been well taken care of and has received regular servicing. You need to remember that when you are buying new machinery, you are paying for exactly that and it doesn’t necessarily reflect its true value. You can purchase used plant and machinery for a much lower price that will still allow your business to take on those larger contracts and it leaves extra cash that you can plough back into your business.
- Less depreciation involved – You probably know this already from when you bought your brand-new car and then you found that it lost thousands of dollars in value the moment that you drove it out of the showroom. The same rule applies when buying brand-new equipment and it will depreciate almost immediately the moment that you put the key in the ignition and you put it to work. The biggest depreciation occurs with any piece of machinery in the first few years of its life and so you get to avoid this depreciation by purchasing used.
Like any piece of plant and machinery, it needs to be properly insured and by purchasing used equipment, the costs for insurance are much lower. You also get a better selection when it comes to picking out the excavator or any other piece of equipment that your business might need and if you are familiar with a particular piece of machinery, then you don’t have to learn about the new technology that comes with buying a brand-new one.
