Construction business requires huge investment and a major chunk of investment goes for buying heavy construction machinery depending upon the project requirement. Therefore, it is always advisable to minimize the cost of the investment to make maximum profit out of the project.
There are four segments of construction machinery, Earthmoving equipment, Concrete equipment, road equipment and material handling equipment and buying this equipment is very costly affair.
Due to budget constraint, construction companies can’t take risk of compromising on the quality of construction materials, which will ruin the brand value of the company.
However, one option is always open for these construction companies to minimize the investment in purchasing the machinery used in the projects. Instead of investing in the new construction equipment which is necessarily costly affair, one can prefer to buy second-hand construction equipment from various dealer and e-commerce portals which are in the business of used construction equipment.
There are various advantages of buying second-hand construction equipment, which help construction companies to save huge amount of money.
The new machine eats up huge money of contractors and buying used machine help to reduce the project cost. Second hand construction equipment is always available at lower price and used machine could be a better alternative from a financial point of view, when we plan out the investment for the project.
Within a first year of buying the new construction equipment, the value of the machine depreciates around 20 to 40 percent, depending on the condition of the machine, so your resale value is automatically reduced. Thereafter, the depreciation is gradual and not substantial. However, used construction equipment hold resale value, even you sell after a few years or after your project completion. Therefore, potential loss in selling used equipment is lesser as compared to selling new equipment.
Choice and Flexibility
Due to the emergence of e-commerce, many companies offer the services of buying and selling used equipment online, which give various options/choice for the buyers to buy equipment in their location or in budget. When someone intends to buy used equipment he/she has flexibility to choose machine from their favorite brand, which one can’t have same flexibility when go for new machine due to budget constraint. For example, if a small contractor wishes to buy Backhoe loader of JCB but due to shortage of fund he can’t buy the new JCB Backhoe loader, but he still has option to buy the same brand in used equipment.
As we are aware most of the construction equipment manufacturers are coming up with the latest technology and if contractors buy new machine they enjoy the features of the latest technology.
However, it does not make a huge difference on a project if someone uses the older version of the machine due to any reasons. The Heavy construction equipment industry has been very slow in adopting the new technologies, so it is not a matter of concern if contractors are using used equipment due to financial crunch.
Therefore, it’s important to make a choice between new and used equipment after taking all the above mentioned points into consideration.