6 Aspects that Control the Cost of Second-Hand Huge Equipment
Huge and heavy equipment like excavators, backhoe loaders among others are often highly priced. Hence, it may not be always possible for the contractors to buy a fresh piece of equipment. This is giving a huge rise to the second-hand equipment market. Apart from this, the other reasons responsible for the growth of second-hand huge equipment market include increasing economic uncertainty, lack of capital, technology upgradation, unpredictable construction and infrastructure growth, depreciation woes, costly breakdowns and limited space availability.
When it comes to the price of second-hand huge equipment, then they are also not less costly but yes, their price is definitely lesser than the fresh equipment. No doubt that if you are dealing with larger quantities or entire fleets, there is huge financial investment involved even in the case of second-hand huge equipment and there is no harm to be sure that you’re getting the best value when you are buying such an equipment.
So, if you are also looking to buy second-hand huge equipment, then you need to understand what all aspects control the cost of such equipment. This can very well help you to determine the accurate price of such equipment.
We list the six major aspects that generally control the cost of second-hand huge equipment...
1. Demand and supply: Just like any other product, the rules of demand and supply impact the second-hand huge equipment cost too. This means that as the demand for the equipment goes up, the cost also increases and when the supply becomes less, the price decreases.
2. Market situation: The market conditions also highly impact the cost of used heavy machinery. For example, in case of slow economy, it is obvious that low money would be spent on construction and infrastructure development. This impact the price directly as this leads to fewer potential purchases for second-hand huge equipment, thus, driving down the prices and giving an opportunity to the buyers to negotiate more. Seasonal and location-specific factors also have a huge impact on the cost of used heavy equipment.
3. Manufacturer’s and sellers reputation: There may be many manufacturers who manufacture an equipment but there are only few who control the market as they are well-known because of the superior quality of their equipment, market reputation or trust earned through the years and thus, people don’t hesitate in giving more money for second-hand huge equipment of such a brand. For example, if you buy Mahindra Construction Equipment’s second-hand heavy machinery, then it is sure that they are equipped with the latest technology and offer high flexibility. As a result, the cost of these machines is higher than others in the market as these machines can ensure productivity and efficiency for years to come.
Not only manufacturer’s reputation is important but second-hand huge equipment seller’s/vendor’s reputation also counts when it comes to the cost of the equipment. This factor becomes all the more important when you are buying from an unknown vendor. For example, an authentic vendor will have a detailed service history of the equipment, thereby, verifying the fact that the regular maintenance of the equipment has been performed to the highest standards. Also, the reputed vendors give some minimum warranty on the equipment. This highly impacts the cost of second-hand equipment.
4. Age of the equipment: It goes without saying that second-hand huge equipment devalue with the passage of time due to wear and tear, obsolete technology and various other reasons. Hence, age of the equipment has a huge impact on its cost. However, the cost of used huge equipment does not depreciate in an evenly manner. If the equipment is properly maintained and it is in a good condition, then the depreciation value becomes consistent. Here, the number of hours on the equipment comes into play. Generally, an older machine with low hours and which has been properly maintained is more costly than the comparatively new one which is not maintained properly.
5. The condition of the equipment: Second-hand huge equipment which are better equipped, flexible and are able to perform majority of the tasks at the job site command a higher price than the models which are less equipped and flexible. The appearance of the second-hand equipment also has a huge impact on its cost. If the equipment is painted, repaired and cleaned properly and its maintenance and repair documentations are right in place, it is generally higher priced.
6. Model and features: Last but not the least, a standard model of second-hand equipment sees less fluctuation in terms of price over the time. However, a specialised equipment may see major price fluctuations. Further, second-hand huge equipment that come with many features and attachments generally command a better price.
Apart from the above factors, ability to inspect and test the equipment also has a huge impact on the cost of second-hand huge equipment. Generally, sellers who allow the purchasers to have a good look at the equipment and inspect and test it thoroughly, keep the cost of the equipment high as they are confident that their equipment is worth it.
In a nutshell
Every construction site requires a range of efficient heavy and huge equipment to do the task with zero defects and in the given timeframe and for that constructors need to buy them. However, most of the times, the cost of the new equipment is sky-high and one may look for second-hand huge equipment as they perform the same tasks but the purchasing cost associated with them is not that high. However, they are still costly and it is important for you to understand what influences the price of second-hand huge equipment as this can give you a better idea of its true value in the market.
As discussed above, there are various aspects that control the cost of second-hand huge equipment and you must pay heed to each one of them, so that you are not cheated by the seller. Overall, you need to have your proper research in place before making the purchase decision for second-hand huge construction equipment.