Buyers can find significant savings when purchasing used construction equipment. “Demand is strong for machines with low hours and a manufacturer warranty,” said Dennis Howard, vice president, Fleet and Remarketing, for RDO Equipment Co. With more than a decade of experience at the dealership that spans nine states, Howard understands what buyers need to look out for when purchasing a used machine.
Similarly, Ritchie Brothers understands the keys to becoming a successful used equipment buyer. The company sells billions of dollars of heavy equipment and trucks each year through more than 40 permanent auction sites around the world (Ritchie Brothers Auctioneers) and multiple selling platforms such as IronPlanet and a reserved marketplace with “buy now” options (Marketplace-E).
Ian Malinski, media relations manager for Ritchie Brothers, cites the immediate availability of used construction equipment as another important benefit for buyers. “New equipment—particularly specialty items—can be hard to find,” he said. “Depending on the asset, wait times can be months or even years. We have equipment that’s ready to go to a new owner today.”
Whatever reason you are looking to purchase used equipment, Malinski and Howard share best practices to avoid purchasing a machine that isn’t worth what you paid for it or causes a lot of headaches.
1) Have the dealer pull data for the machine.
Maximize your dealer relationships when buying heavy equipment. “We will help customers do their research, even if the they are not buying the machine from us,” says Howard. “We have seen tractors that look really nice and then we’ve looked into the history and find they have been underwater, totaled or rebuilt.”
2) Look for little signs the machine hasn’t been kept up.
On a physical inspection Howard looks for little things that may indicate how well a machine has been taken care of. “Are there welds where something was replaced? Is it wired up where it should have a cylinder? Are there mismatching components? Those are red flags,” said Howard.
3) Operate the machine and get it up to full speed.
Running a machine for 15 minutes is not the same as running it all day. “You’re going to see different issues,” said Howard. “Run it hard enough to know what you’re getting.”
4) Have someone you trust inspect the machine.
According to Malinski, the person inspecting the equipment ranges from company presidents to equipment managers, mechanics and professional inspectors. Ritchie Bros. professional inspectors evaluate machines and provide IronClad Assurance as to the condition of the equipment at the time of purchase. “We try to provide buyers as much info as possible to help them make a confident decision on auction day,” said Malinski.
“The no. 1 qualification for me is trust,” said Howard. “I like to know the person inspecting the equipment.” At a minimum the person should have significant mechanical or operating experience with construction equipment.
The pandemic has changed used equipment purchasing, making it more challenging to see equipment in person. But sellers are adapting. Ritchie Bros. moved all auctions online in mid-March of 2020. “We have seen attendance grow exponentially,” said Malinski. A recent Fort Worth, Texas auction resulted in $68 million of equipment sales to more than 11,300 online bidders —a 64 percent increase in bidders over the same auction in 2019.
For buyers who don’t want to travel during the pandemic, RDO Equipment is utilizing FaceTime and other video apps to give customers a custom close up look at the equipment.
5) Avoid deals that are too good to be true.
Howard believes people make bad buying decisions when they get so excited about deal, they forget to do their homework. “We usually find out there is a reason for the deal,” said Howard.
6) Research the seller.
“Make sure you work with a company who is open, honest, and trustworthy,” added Malinski. Knowing the seller, whether it’s a local dealer or a well-known auction company, removes some of the risk out of a used equipment purchase. When purchasing equipment online, buyers need to be cautious. Not everyone selling used equipment is honest. Howard has known unscrupulous sellers to market equipment they don’t own. “If a seller can’t give you references of other people they sold to, I would stay away,” said Howard. Used equipment dealerships that belong to the Independent Equipment Dealers Association IEDA, a non-profit trade association, are committed to the highest ethical standards.
7) Get your questions answered.
Uncooperative sellers who can’t answer your questions, are another red flag for buyers. “Ask for the machine history, ask for the details,” says Howard. “Have someone else research it even further.”
Buying used equipment can be a great way to save money and get the equipment you need but to do it right you should proceed with caution, thoroughly vetting both the machine and the seller.
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