on Monday, March 21, 2022
No matter what industry you’re in, you want to get the most out of every dollar. For those who work in agriculture, precision farming, commercial mowing, and construction, the purchase of new or used equipment is a critical aspect of their operations. They need to ensure that they are going to maximize their return on investment for each machine they add to their fleet. That often means weighing whether it makes sense to buy new or used equipment.
While there is an undeniable appeal to purchasing a brand new piece of equipment, there are also a variety of benefits to buying used equipment that you may not be aware of.
If you like having choices, there is no comparison between the new equipment market and the used equipment market. Whether you need farming, construction or transportation equipment, there are literally thousands of used machines available for sale across North America. And because the inventory is so saturated, it’s effectively a buyer’s market. You’ll have a greater chance of finding what you need at a price point you can afford.
Pay Less Upfront
The price tag for used equipment is much less than what you would pay for a new piece of equipment. When you purchase anything new, a portion of the price is essentially the newness of that item, rather than the actual value of whatever it is you’re buying. That is not a factor when buying used equipment. Used equipment that has been well-maintained and properly serviced can be as productive as new equipment at a fraction of the upfront cost.
Avoid Initial Depreciation
When you buy a new car, it depreciates as soon as you drive it out of the dealership. New equipment is no different. In the first year alone, you could lose as much as 20 to 40 percent of your machine’s value when you purchase the equipment new. You never have to worry about initial depreciation when you go the route of buying used equipment.
You can’t avoid depreciation altogether when it comes to buying used equipment, but you may have a better chance of that machine holding its value. The key is to keep up on regular maintenance and proper upkeep. If you’ve maintained your equipment well, you’re more likely to get a healthier return on your investment when it comes time to sell and upgrade.
Save on Insurance Costs
Because the value of your used equipment is lower than a new piece of equipment, your insurance premiums are going to be lower. Insurance for new equipment will assess replacement cost at the value of a new machine, even at a normal rate of depreciation. Your insurance premiums will be adjusted for a used machine, allowing you to keep more in your wallet.