It’s a textbook economic storm. High prices for new equipment, high interest rates, supply chain limited production capacity leading to longer lead times, and growth in construction activity have converged on the used market.
Then there are new emissions regulations that limit the age of the used machines that can be placed in service in some states. On top of all that, there’s been a slowdown in overseas sales, traditionally a large market for older machines, because of the strength of the dollar, high ocean freight costs and higher overseas interest rate financing.
The result:
More companies are holding onto older machines, driving down availability and driving prices up for good quality used units.
“Good, used equipment is scarce and the market knows it,” said Jeff Swan, VP at Exact Crane & Equipment Corp ( https://www.exactcrane.com/ ). “As a purchaser of used machines, we’re paying more for 2- to 7-year-old machines because they’re holding their value due to demand and lack of availability. At the same time, demand has slowed for 12- to 20-year-old cranes and prices seem to be decreasing.”
“Due to increases in new unit pricing and high interest rates, the price of 10-year-old or younger used machines is staying strong,” said Pramod Agarwal, owner at Crane Dude ( https://www.cranedude.com/ ). “Equipment with low engine hours is selling near the price of new and residual value have not necessarily increased.”
At its three locations in Florida, New Jersey, and Massachusetts Select Crane Sales specializes in the sale of new and used cranes. And according to Jason MacKenzie, president, the company is seeing high demand for quality, late model machines.
“They are becoming harder to source due to demand as well as a steady stream of new work that is keeping them on job sites,” MacKenzie said. “Prices are staying very strong and continue to increase incrementally with the price of new cranes.
“At Select Crane Sales ( https://www.selectcrane.com/default.htm ), we’ve seen owners holding onto equipment longer than they may have in the past,” MacKenzie continued. “With extended production times they don’t want to be caught without the capability to do a job, so many users are placing purchase orders but holding onto older inventory until their new units have arrived.”
If you’re in the market for used equipment these days, you may not get exactly what you want.
“In the pre-COVID era if a customer called and said they wanted a specific machine it was our job to find it,” explained Matt Greenspan, business development and sales at Dozier Crane & Machinery, Inc. ( https://doziercrane.com/ ) “Now, customers are more accepting of alternatives based on the market at that time.
Employing proven practices]
“Over the past 2 to 3 years we’ve had to become even better at finding quality used machines because inventory levels have declined due to end users holding onto equipment longer because they could not update their fleets,” Greenspan added. “It has been a challenge, but we are adapting to meet our customers’ needs.”
With 12 locations across the U.S., Jeff Martin Auctioneers (https://www.jeffmartinauctioneers.com/) has a wide view of the market for used equipment. Bryan Carr, crane and heavy transportation specialist, noted that while trends have kept newer used models out of the market, there are opportunities when it comes to older and higher hour equipment becoming available for sale.
That means desirable, low hour equipment is still exceeding retail values and older, high hour units are selling above previous price points.
“It is important, however, to know that no market condition is forever,” Carr added. “Sellers looking to realign their fleets would benefit from doing it now. Don’t miss this opportunity to capture a high value for your used equipment because these market conditions may be once in a generation.”
“When a used unit is available,” Jeff Swan advised, “the best way to sell it is to get it online. Buyers are all over the Internet searching these days. If it's listed on sales sites, it'll be found by the end user. In all cases, though, to get more out of a used machine in any market, it needs to be taken care of, including cleaned and properly maintained.”
Presentation is very important, agreed Pramod Agarwal. “Used equipment must look good and be backed by historical maintenance records,” he said. “And as much as good equipment or the price, it’s also all about customer relationships. You must continuously stay in communication and allow ample time to re-market and advertise to get higher residual values.”
About the author:
Seth Skydel ( http://linkedin.com/in/seth-skydel-5360a586 ) is a writer with 38 years of experience covering the trucking, utility, construction and related markets.
