Equipment World Digital Magazine
Issue link: http://read.dmtmag.com/i/860257
August 2017 | EquipmentWorld.com 26 private sales. "We have a couple of companies that we sell specific types of equipment to. An example is mixer trucks, where we have a relationship and trust with a company and buyer," he says. If you have the patience and are attuned to the market needs, private sales have advantages, says Jack Bailey, owner of JBR Incorporated, a commercial construction company in Fredericksburg, Virginia. Bailey will occasionally use auctions, but says "it depends on the marketability of the items and how quickly I want it disposed of." Private sales allow the seller to have the final say on the price, says Samford, an option that he loses with unreserved auctions. And from a buyer's perspective, if you can personally inspect and run a piece of equipment at a private sale, you're more likely to spot any telltale flaws or problems that an online buyer might not see, he says. Auction companies sometimes deal with what Bailey calls "an overabundance of junk." When a contractor comes along with a well-maintained machine, the auction houses are often eager for it since it will bring better than average money, he says. Other selling options The disposal option Bailey likes least are buybacks. "From my experience, these provide the least favorable return on investment," he says. Others see some advantages in buybacks, depending on their business model. "Many joint-venture projects are negotiating guaranteed buybacks on iron acquisition because they have a known term when they will be ready to dispose of assets at the jobs end, and it allows them to clearly identify the project ownership costs going into the project," says Samford. One strategy Merritt has deployed is buying a new piece of equipment for a specific job through a rental- purchase option. The rental payments get charged to the job, and at the end of the project, the company will buy out the contract of the now used equipment and put it into the regular fleet for other projects. This only works if the prices are right, he says, but it has the advantage of letting the job pay for the first few years of the equipment. After that, you have a price- depreciated piece of yellow iron without the costs or risks involved in buying used because you know its condition and value. Buying Nobody we talked to, even the large companies that spend millions on new equipment every year, say they rule out buying used equipment. At Sherwood, King will buy used equipment from a variety of sources: auctions, OEM dealers, independent dealers and private sales. "There are a lot of good reasons behind each option," he says. "I have found that with the internet bidder participation in auctions, the chances to get a bargain on something is long gone. It's good if you're selling, not so good if buying." All other things being equal, King says he likes buying through a trusted OEM dealer. Merritt also says he feels more confident in buying used equipment from a dealer. "I usually go through my OEM people, because I know I can deal with them. If there is an issue, you can go back to them and they can do something for you." "A lot of our support pieces are used," says Bailey. "Good deals are hard to find, so you must be patient and ready to make a decision quickly. Our philosophy is no matter what the market conditions, somewhere, someone needs to sell something." used equipment report | continued Top Used Articulated Dump Truck Models 1. Cat 740B 2. Cat 725 3. Cat 740 4. Cat 730 5. Volvo A40F Top Used Skid Steer Models 1. Bobcat S185 2. Bobcat S650 3. Cat 262D 4. Bobcat S250 5. Bobcat S175 Top Used Compact Track Loader Models 1. Bobcat T190 2. Cat 259D 3. Bobcat T650 4. Bobcat T300 5. Cat 289D Top Used Compact Excavator Models 1. Kubota KX121-3 2. Deere 35D 3. Cat 308E-2 CR SB 4. Cat 304E CR 5. Bobcat E32 In terms of number of units, financed Jun. 1, 2016-May 31, 2017. Source: EDA, edadata.com