New Or Used Equipment? A Business Guide.
The Big Question: Do I Buy New Or Used Equipment?
When it comes to decisions for your business, you always want to make the most financially sound decision possible. Purchasing large equipment such as semi trucks can be an overwhelming decision unless you do your research. When you know exactly what to buy and have taken your time to investigate which option is best for you, it takes a huge weight off your shoulders. So, should you buy new or used equipment?
The Cons of Buying Used Equipment
Used is used – we all know what that means. Another person has put a little wear and tear on the product you’re buying, and their care and maintenance comes with it. But what are the other implications this could bring for you company when considering buying used?
Who are you buying from?
Sometimes when buying used equipment, you have less of an idea where your products are coming from. Depending on the secondhand equipment you’ve decided to buy, they could not require as strict mandatory inspections or certifications for the product in question.
You’re also inhering all of the old problems of the old owner. It’s important to ask the owner how the equipment operated for them and if there were any issues while they were using it. Ask for any paperwork that they may have in regards to maintenance of the equipment. Still, you are technically relying on an unauthorized source to provide you with this information.
Well, It’s Used
The used equipment you’re selecting could be outdated simply because it’s not the newest technology on the market. You can look for owners going out of business that have the latest model of the machines you’re looking for, but otherwise you’re likely going to be buying used equipment because the owner has moved on to something more updated.
Where’s the Warranty
Used equipment is less likely to come with a warranty, and will most likely never come with one when buying from a private party. If you’re purchasing used equipment from a dealer, try to negotiate some type of warranty to protect you from potential equipment failure.
Going along with the idea that you’re inheriting old problems from previous owners, those owners could be hiding equipment damage from you. This could incur extra costs for you later when those previous owners are long gone. If you can, get someone to inspect the equipment for lurking imperfections before you take the plunge and buy.
The Pros of Buying Used Equipment
We also all know that buying used means that you will pay less, which is always a good thing. Weigh that in with the other factors that used equipment has to offer.
It’s All in the Price
While all of the above reason not to buy used may sound doom and gloom, the fact that used equipment is simply cheaper may trump all of that. And it’s not impossible that on occasion you’ll find a great deal on equipment that’s in good condition and will work just as you need it to. Sometimes, older builds are even made more reliably than newer, flimsier models.
More Purchasing Power
If you are trying to buy a fleet of vehicles, for example, you’re going to need exponentially more money than if you were going to buy just one. Buying used, you can increase your numbers game.
By taking on on more equipment, you can do more work. When you do more work, you can make more money to buy more equipment. You can increase your sales on a budget this way, and eventually make enough to buy used.
It’s Not All Bad
Like we mentioned, it’s very possible to find some hidden gems out there that will work for you just as well as a new piece of equipment may work, for much less of the cost. Some suppliers of used equipment even require that there be a comprehensive inspection of the equipment and that you get a warranty.
The Cons of Buying New Equipment
Maybe you always hated hand-me-downs as a kid, and that idea is sticking with you now when considering what to buy. There are both negatives and positives of buying new, but here’s the downsides.
Money, Money, Money
It may not need mentioning again, but buying new instead of used will indeed cost you more money. The first few years are the time where value of a piece depreciates the most. Sometimes, if a business is small, they simply can’t afford the foot the bill for new insurance on their equipment.
When you’re ordering new products, a quick and speedy delivery is not guaranteed to receive them. The manufacturer may have the equipment in high demand. When you’re buying used, the used item is already right in front of you. Make sure that you speak with your sales representative to be clear about the time frame for getting your new equipment.
In It for the Long Haul
When you pull the trigger and buy new equipment, you’re not likely to sell soon after that initial purchase. That means if an update is coming up, you’ll be operating on equipment without that update until you’re ready to purchase again.
The Pros of Buying New Equipment
When an item’s brand spankin’ new, you’ve got a little something to brag about. But you also have a little bit of a larger hole in your checkbook. What else could it mean for you?
Get Stuff Done
New equipment means things get done more quickly. When things get done more quickly, that means more money for you. The productivity that new equipment can promote could be worth the price of the equipment alone. If you’re constantly facing slow turnaround times/breakdown expenses, you’re not running your business as efficiently as possible.
If your equipment is going to be in the public eye, it’s important to think about the image you’re putting out for your company. If your trucks are driving around looking like they’re falling apart, that could hurt your brand’s image. New products say you can foot the bill for the best of the best, and you can be trusted with their business. Appearance may not be a big factor in your purchasing of new or used equipment, it is something you may need to consider.
There are a lot of good looking used trucks out there, too.
You’re The First
It’s more comfortable to know that you’re the only one who has ever worked with your equipment. No one’s hiding any breakdowns or malfunctions from you, because you’ve experienced any hiccups from the start.
When you buy new equipment, you can write the equipment off on your taxes and get huge breaks. Declaring capital allowances can actually help save you money in the end when you’re considering buying new.
Once you’ve weighed all the pros and cons, it’s time to buy. Top Mark Funding can help you buy right away. You can get your funding for you equipment in seventy-two hours or less, and get approved in the same day.
You’re just a few steps away from buying your new fleet of trucks, your heavy equipment, or whatever new big purchase your company is ready to make. You’ve got this.
Need more Expert Advice? Contact one our finance experts and get the assistance you need to make the best choice for YOUR business.