8 Factors That Affect Pricing & Availability of Used Equipment

8 Factors That Affect Pricing & Availability of Used Equipment
8 Factors That Affect Pricing & Availability of Used Equipment
Author: Small Business Expert | November 22, 2021 | Topic: Used Equipment

8 Factors That Affect Pricing & Availability of Used Equipment

When shopping for used heavy equipment, it's essential to know how to determine a fair cost. Understanding the variables that determine resale price can help you navigate the secondhand market and get the best product without deviating from your budget.

To help you in your search, we've prepared this list of the top eight factors affecting the resale value and availability of used heavy equipment.

What Influences the Price of Used Heavy Equipment?

While the secondhand market experiences fluctuations due to a range of factors, here's what makes the most impact.


1. Age

Newer equipment will generally fetch a higher price than its older counterparts, as a machine's value tends to depreciate over time. However, the price also depends on how well-maintained the equipment is. One piece of equipment might be newer, but the older one might be in better condition because its original owner took excellent care of it. In this situation, the older model might go for a higher price.

A piece of equipment's original cost is another factor tied to age. A machine's resale price is normally proportional to its original price, but it will also depend on how long ago the manufacturer released it.


2. Condition

A piece of equipment's condition tends to go hand in hand with age regarding its effect on resale price. While newer machines will generally be more expensive than older ones, the degree to which the previous owner cared for their equipment is even more critical. Routine maintenance is important for ensuring the efficiency and reliability of a machine. Used equipment that has detailed maintenance records and a history of being maintained with genuine OEM parts may have a higher value. Touch-ups and repairs, like a new coat of paint or a replaced engine, are other factors that impact used equipment value.

You should also consider the amount of annual running hours on the machine. Is the number higher or lower than it should be? Underused and overused equipment will cause the price to fluctuate —‌ generally, underused equipment will fetch a higher cost.


3. Supply and Demand

The supply/demand cycle is another of the factors that affect equipment availability. As demand increases, supply gets scarcer, and prices tend to rise.

Supply and Demand


However, when the market becomes saturated with specific products, you have the advantage as the buyer. With so many options, you have more freedom to find the most competitive price. You should shop around and weigh out all your options during these periods to ensure you get the best deal.


4. Economic Conditions

Economic and industry conditions impact supply and demand. Changes in political administrations, inflation and stock market fluctuations are all factors that affect new and used equipment pricing.

For example, during recessions, people are less likely to build homes. As a result, more builders might resell their used equipment. Since there's so much available supply, prices are likely to be lower. The opposite is true during economic expansions, when prices are likely to increase.

Additionally, some industries tend to go through seasonal business cycles. For instance, the forestry industry is most active during the summer, which is when logging equipment is most in demand. Once the season is over, prices are likely to decrease as demand also falls.

What if you need equipment right away? In that case, it might be worth looking into dealers in other regions or industries, since demand may be lower in areas that experience different seasons and needs.


5. Degree of Specialization

Universally applicable machines tend to be more expensive than specialized machines. Equipment with extensive modification is trickier to apply to many applications and thus has lower resale value. For example, if someone purchased a machine in Canada and modified it to fit Canadian standards, it might be more challenging for them to resell in the United States.


6. Brand Name Recognition

Brand loyalty is a significant factor that impacts used equipment cost. Sellers will typically charge more for brand-name equipment than generic or off-brand pieces. This strategy is effective because people are willing to pay more for brands they recognize.

If you're looking for a specific model from a trusted brand, you should remember that the price may differ from that of a similar machine from another brand. However, in this case, it's more of an investment than a splurge.


7. Equipment Inspection and Testing

You should always inspect or test drive a piece of equipment before you buy it. While dealers that offer this option may charge higher prices, it also indicates a trustworthy seller. Dealers who cut corners are less likely to provide this option and more likely to charge low prices for their products.

Equipment Inspection and Testing


Buying from a used equipment dealer should feel like a secure transaction. If you notice any red flags, including an inability to inspect the machine you're interested in, it might be a better idea to find a more reputable seller.


8. Operating Costs

A secondhand machine's cost goes beyond the initial resale price. How much are you willing to pay for new parts and repairs? Depending on required maintenance and local mechanic wages, some pieces of equipment may be more expensive to maintain than others.

Consider how much you might need to pay in repairs based on your chosen machine's running hours and local mechanic prices. Fuel charges can also affect a machine's operating cost, as fuel is generally more expensive during the summer months than it is in the winter.

Being aware of potential price variance is helpful since you'll be more able to predict that you're getting the best value for your money.

Why You Should Buy Equipment From Cat Used

While used equipment is more budget-friendly than new equipment, you should still be able to get an excellent product for your money. Caterpillar experts inspect and service Cat® Certified Used equipment to ensure it meets our high standards.

Using our site, you can search for specific products using factors like model or hour range. If you have trouble finding a machine that meets your specifications, we can notify you when it becomes available.

You can also purchase a Customer Value Agreement (CVA) or an Equipment Protection Plan (EPP) for your used Cat product. A CVA makes equipment ownership easy by delivering Genuine Cat Parts right to you so you can ensure hassle-free maintenance. An EPP protects your equipment beyond its original warranty, reducing parts and maintenance costs and ensuring skilled mechanics will always repair your machine to Cat standards. With these two great options, your equipment will last longer, and you'll have peace of mind knowing you've protected yourself from unexpected costs.

Find Used Heavy Equipment With Cat Used

Cat Used offers a wide range of used Caterpillar equipment at reasonable prices. Shop used equipment online, or use our online tool to find a Cat dealer near you.

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