Yengst says he does try to be optimistic, but “this is really the saddest damned thing I’ve ever seen. It’s the hardest time I’ve ever had in my life, trying to talk about markets. Some people really are trying to make something out of nothing right now, and I take my hat off to a few of them because they are succeeding at it,” he says. “When you really get down to the nitty gritty, the rubber on the road kind of thing, we’re in a very serious problem and we’re not coming out of it very well or very fast. It is just such a tough, tough market to be in – and a hard one to talk about – other than I think we’re going to get some relief as we go along, but it’s going to be slow.”
His advice on disposable fleet? “Hang on to it, if it works, if it’s functional. If it’s not totally rusted out and a real problem from a maintenance standpoint, hang on to it,” he says. “Eventually, if you feel that you need to get rid of it, it certainly is not going to get beat up anymore than it already is, if it’s just sitting there. As long as you don’t have a really serious cash flow problem – and you’re not going to get that much out of it anyway.”
Others would argue that.
Exactly two weeks before that Ritchie Bros. auction in Connecticut, an Ontario-based buyer bought a 2004 Caterpillar D7R XR II crawler tractor at a web-exclusive IronPlanet auction for $172,000. From an opening bid of $100,000, the dozer was on the clock for 12 minutes and drew 32 bids. Good deal compared to the crawlers that moved at the later Ritchie Bros. auction? Impossible to say, absent detailed machine information, but it’s undoubtedly something to ponder for sellers and buyers alike.
Who can you trust?
He’s biased, he admits, but “the OEM’s dealer is your most trusted source” on used equipment, says Kurt Tisdale.
“Whether it is us or our competitors,” says the general manager of Caterpillar Used Equipment Services, “the authorized dealers have access to the technical information, and they have access to more of the warranty and history of repairs and maintenance than anybody else.”
His advice to fleet managers looking at the used market to add pieces is “to just be very careful when you see a nice paint job on any machine – to dig deeper.
“We’ve often found that a nice paint job is hiding something of concern,” he says, “but in the hurry to take advantage of a deal, it may influence a buyer’s decision more than it should. There are a lot of things to consider in that used purchase or sale. It’s not just the price. You really have to dive into what it’s going to cost on the make-ready and the repairs, the transportation time and expense, and the commission.”
Thorough inspection is key, says Tisdale. “It really comes down to trust with whomever you are in business with. I’m biased and believe the OEM dealership has that long-term trust with the contractor and the customer, and can provide information that’s really needed to make a wise decision. The machines are also a lot more sophisticated than they were a few years ago. With that sophistication comes the need to have a trained technician to be able to really diagnose and understand what we’ve got there.”
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