The reasons you need a used machine
26 November, 2020
Maybe your first instinct is to buy a new machine, but why? – There are many reasons why you need a used machine:
Think about the impact on your company’s cash flow when you invest on a new machine. Buying a used but high-quality machine can save thousands over the investment on a new unit.
The price of new equipment has increased over the past several years due to the huge investment in R&D of new technologies but when you buy a reliable and well maintained used equipment you’ll access the same level of technology without the impact in your budget.
On the other hand when you buy an used equipment you pay less taxes as the initial investment is lower. You can also use your savings to invest in other machinery, attachments, maintenance, or another important investment you need for your business.
When you buy an equipment it starts to depreciate as soon as you jump inside and put it running. In the first year the normal depreciation is always around 20%, slowing done over the next coming years. With a used machine you avoid that initial depreciation.
A well maintained reliable used equipment holds its value longer. You need to perform a proper maintenance, preferable done by your dealership and holding detailed records of all services and repairs. This information has a great value when you decide to sell your used machine. Buyers are extremely focused on maintenance records and your dealership is a safe source to provide you reliable and accurate records.
When you buy a used equipment you get it immediately, on the other hand most of the times you place an order for a new unit you have to wait, so there’s a huge advantage of availability which allows you to start working right away as you close your purchase of a used equipment.
Since the used equipment has a lower depreciation than a new machine, you can buy, use it and then sell it for a good price. During the operation you deduct expenses, maintenance, interests and insurance on a lower percentage than a new machine which represents a lower cost of ownership.
The income you generate on your project using a new or used machine is almost the same which leverage your capacity to increase your profits and returns. Owning reliable used equipment allows you to bid on projects you wouldn’t be able to consider if you own a fleet of new equipments.
The cost of financing the used equipment temporarily is something you can factor in as one of the costs of taking on a specialized job for several months. When the work ends, if you don’t end up landing another contract where you would need the specialized machinery again, you have the option of selling it and recouping much of your initial outlay.
Take advantage of the warranties available on used equipment which gives you the confidence you need when you decide to purchase. To feel even more comfortable you can always back up your equipment with a maintenance contract.
The maintenance contracts also helps you to plan for operating costs because they can include just the preventive maintenance but also non expected repairs. When you know upfront the expenses, you have lower impact on your business costs.
The cost of insurance is most of the times based on the cost of replacement which is an advantage when you won a used machine, the cost of replacing this unit is fair lower than a new equipment.
