Sourcing used equipment?
By Mike Anderson
It’s debatable whether it’s a good time to buy or sell used equipment, or both, but it’s clear the game has changed
It’s a Thursday morning in mid-April when a 2008 Caterpillar D8T dozer crawls off the Ritchie Bros. auction ramp in Connecticut, having fetched a top bid of $322,500 from a buyer on site. Over the following three minutes, three 2008 D6 tractors follow at closing bids ranging from $125,000 to $182,500.
Big deal, right? A scene repeated many days throughout the country, the continent and, heck, the world, right? Perhaps. But that’s actually what makes it significant . . . and, given where the industry has been the previous two years, maybe even a big deal.
This isn’t Florida in February, where and when the construction equipment industry’s mega-auctions ritualistically kick off the new season and, according to Rouse Asset Services, attract a popularity reflected in an annual spike in sales prices. This is two months later, more than 1,200 miles north, and yet the used iron is still moving and fetching noteworthy selling prices.
Depending on who you ask, the used equipment market is back, even robust. The sentiment isn’t universal, and even somewhat optimistic observers say results are mixed, depending on the particular sector being served, but the overall feeling is we’re not where we were 18 months ago . . . and that’s OK.
“From strictly an equipment-value standpoint, there’s absolutely no question that the prices people are exchanging equipment at today are higher in a relative sense than where they were even a year ago,” says Gary McArdle, Rouse vice president. For relative comparables, such as a 2007 piece up for sale this year versus a 2006 model up for sale 12 months earlier, the values have increased by 8 to 12 percent in the lifting and mainstream construction product types chronicled by Rouse, says McArdle. “That’s just pure data,” he says. “It’s absolutely a better time to sell than it was a year-and-a-half ago.”
That may be, says Kurt Tisdale, general manager of Caterpillar Used Equipment Services, but it’s a “much more complicated” used equipment landscape today. “There is a lot of variability in the equipment quality out there.” The slowdown in work may have aged some equipment more gently and gracefully, says Tisdale, but at the same time, “a lot of customers weren’t able to do the maintenance that they historically have been doing, so you may be looking at a machine of comparable age and hours, but internally and externally may be significantly different in quality and capability. It’s a lot more complicated now to find that good deal, both on the buying and selling side, especially when we see the prices every month just going up and the supply of good equipment getting shorter and shorter.”
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