What are the advantages in buying new versus used heavy equipment? The choice between new and secondhand heavy equipment depends on your individual circumstances and what is best for your business. This covers the need for equipment inventory both now and in the future. Every purchase choice has benefits and drawbacks.
It may be quite helpful in giving you precise and useful information if you are aware of the benefits and drawbacks of each option. We carry both new and used Cat equipment because we recognize how difficult it may be to make a decision. But in the end, it’s your choice, and we want to make sure you’re choosing wisely.
Benefits of Investing in New Heavy Equipment
In a perfect world, you would almost definitely buy brand-new heavy mining or construction equipment if money were no object. You take into account the professional impression you produce by running a brand-new, spotless, and trouble-free fleet for your business. The newest technology would be available to you, along with the “new equipment scent.”
Here are a few additional justifications for investing in new gear:
You are far less likely to experience operational issues with new computers. The cost of routine maintenance is an unavoidable part of owning heavy machinery. Still, if you buy new heavy machinery, your repair expenses will be significantly cheaper and last much longer. It makes sense to buy modern equipment to optimize productivity while minimizing the possibility of failure and expensive maintenance. The next morning, a brand-new machine will start up and function without grumbling about having had the day off. A warranty backup is another option you have if something suddenly goes wrong.
All new machines come with a warranty, but no other manufacturers offer the extensive warranty package that Cat offers. The best warranty available for heavy equipment is your Cat OEM Solutions Warranty, so you can rest assured.
Technology: Significant technological advancements in the engineering and design of heavy machinery are frequent. When you buy new equipment, you’ll get the newest high-tech innovations. Sadly, old equipment rarely has the same “latest and finest” characteristics as new equipment. Compare the most recent safety and comfort features on brand-new Cat equipment, including those on wheel loaders, telehandlers, and used machines that are only a few years old. The greater technology of modern equipment cannot be replaced.
When you purchase contemporary heavy construction equipment, you get precisely what you desire. Additionally, manufacturing and design capabilities for heavy equipment are always evolving. Cat has a wide selection of machinery, ranging from tiny, compact track loaders to enormous scrapers and off-road vehicles.
Tax advantages: Investing in new gear qualifies as a capital asset purchase. As a consequence, you are able to deduct or write off a specified amount connected to the cost of new equipment according to the IRS. Your equipment therefore qualifies as a company asset, enabling you to benefit from tax advantages. These tax breaks may provide a sizable capital offset, which would completely justify purchasing new. For assistance in examining the potential tax advantages, speak with your accountant.
The Benefits of Buying Used Heavy Equipment
A sizable stock of top-notch equipment from renowned producers like Cat keeps the American market for used heavy equipment alive. You cannot ignore the benefits of buying used heavy construction or mining equipment, even if you prefer new models. The secondhand Cat market has a ton of fantastic deals to offer. Here are some of the most persuasive arguments in favor of buying used heavy machinery:
Lower initial expenses: Used mining and construction equipment is less expensive than new ones. In many cases, used heavy machinery will provide the same income for a fraction of the price of brand-new machinery. You could thus be better off saving the difference and spending it elsewhere in your business.
Depreciation on new equipment may be a major inconvenience if it is not taken into consideration. Although depreciation is inevitable, if you purchase a used computer, the high initial cost has already been covered by someone else. Used heavy equipment, whether you’re searching for a little skid steer or a big excavator, won’t lose value as rapidly as new equipment, especially if you maintain it correctly.
Used equipment keeps its worth because it does not deteriorate as rapidly as new equipment, especially if routine maintenance is carried out. Selling used equipment for close to what you paid for will give you a far higher chance of making back your investment when it comes time to upgrade.
More options: Used heavy machinery is widely accessible around the country, ranging from boom lifts and backhoes to industrial loaders and compactors. There are thousands of secondhand machines available, ranging from older versions that can complete simple jobs to last year’s models that are probably just as good as new at a much lower cost. If you visit the secondhand machine market, you’ll have a decent chance of finding what you’re looking for. Flexibility can make the difference between using a used machine right now and waiting for the rigid luxury of a new one.
Reduced insurance costs: This is an advantage of outdated equipment that you might not have thought about. Because the value of your heavy equipment will be lower with a used machine, your insurance premiums will be reduced. In addition, new equipment insurance will determine replacement cost at the new machine value even if the machine experiences ordinary depreciation. As a result, buying a new machine will almost surely result in paying more for insurance than buying a used one.