Used equipment sales started an upswing this spring. May Equipment Watch INDEX reported that nationwide prices and volume increased 0.1% and 9.8%, respectively. Obviously, the best financial position is to gain as much as possible at resale to apply toward the cost of another machine. One of the best ways to maintain resale value is well-documented equipment management.
Create a replacement schedule for your fleet.
No matter how many machines you have, planning for how you will recoup machine value across the life of the machine is the best way to make sure you get the most from your investment. By looking at depreciation, utilization, cost per productive hour and the projected hours to major repairs and overhauls, you eliminate guesswork and can have a clear idea of when will be the right time to put a machine on the market. Typically, the optimal resale point is when depreciation and repair costs intersect. Should your cash flow situation change, a plan gives you a baseline from which you can make the most advantageous financial decisions.
The advantages of equipment management.
A maintenance history of the machine has advantages for you and potential buyers. Here are just a few:
- Well-maintained machines get higher marks at inspection. Whether you’re remarketing through a dealer, an auction house or online, the machine will be inspected before the deal is closed. Machines that have been well maintained will demonstrate it not only in the way they look, but also in how they sound and operate.
- Documented maintenance can help you establish the right price. By reviewing your maintenance records and condition monitoring report history, you can have a very clear picture of the condition of your machine. You can use that information as a basis of comparison against other similar machines available for sale to establish the right price point. If you’re working with an auction company, equipment management information will also help them determine the best places to market your equipment.
- Good equipment management practices boost buyer confidence. With the economy still in recovery mode, construction companies are looking for the best value. The more information you can provide about the potential productive life remaining in the machine, the more confidence buyers will have in making that purchase.