Is it just me ? I can't get my head around the pricing differences between asking prices on machinery trader and actual auction prices. It seems that most retailers ask more than double the real worth of the dozer. Is it just the industry where you ask twice as much and expect offers to be half of your price? Or is it that most dozers aren't really for sale ( there's always a couple of each model that seem to be closer to auction pricing).I do understand that condition is reflected in pricing but most auction dozers that I have seen are in decent enough shape. Anyone care to comment?
Just kije anything bought at an auction it is sold as is and buyer beware. Many machines at auction are cleaned up to look good but if you do not know the ins and outs of what to look for you may wind up with a pretty boat anchor. Pricing in the open market has alot to do with who is selling it.A dealer is always higher but it may have a warranty that could be a lifesaver to you. A lone seller could be selling in this economy to save his credit or maybe his house. 2 machines with the same hours have differernt values also based on maintence and also thier life story. Was 1 machine used "lightly" while the other was overworked. Just a few thing to keep in mind
Great points. The value of a dealer unit is that you have somewhere to go back to if you have a problem. Your stuck with an auction piece. The asking price from a dealer is usually close to the real value of the unit. I was wondering how many of the auction units will find their way back to the auctions next year once this crazy market gets back to normal. Buy a dozer this year and sell it back next year for a profit and never use it. Sounds like a wall street tactic.
Auction equipment today is not the unwanted worn out equipment it used to be. With rental co's and contractors shaving overhead there have been many good or excellent pieces sold. We had a local Ritchie Bros sale last week there was an 07' D6R w/ 1028 hours also 2) 04' 6R's with 2-3K hours. All 3 D6's went to Australia. Buy today and sell tomorrow is a roll of the dice, will demand get higher, lower or remain the same?
Try www.machineryaccess.com . You will find many of the actual owners of the respective machines advertising them at market there and will not have to filter through the international broker contingent. A much more comprehensive list of auction results is also available at www.rbauction.com . IMHO.
Another thing to consider is location and having the right machine at the right time. If you need a specific machine for your application and are needing to buy one immediately, even if there is one available on the other side of the country at an auction in a couple months, it wouldn't necessarily be more cost effective to wait especially after you've paid whatever fees to the auction as well as the many thousands of dollars it can cost to ship machines that size. Add this to the points listed above and it often does make sense to go to your local retailer.
I absolutely agree that a dealer does bring value but......just not that much. The other thing that I also notice in some auction results, one or two units that sell for way more than other comparable units....sometimes 50-60K more....makes me think of the word "shill". Anyone else notice these shennanigans? I know I am stiring the pot but I think I am saying what a lot of us are thinking...eg show that a couple of pieces of equipment sold for a high price before a largish auction....essentially falsely boosting equipment value.....why is it that CAT dozers hold their value so much better again? Calling it like I see it.
Auctions are governed by state laws. Shills in most states as far as I know are illegal and there are legal penalties for people caught in the act. Besides, buying your machine back also means you have to pay the commission. Auction prices are in most cases the actual value of the machine. There was a willing buyer and seller. Asking prices can be any thing. It is just a place to start the negotiating from. Only fools pay advertised asking prices. Reputable dealers will reveal all the information they know about a particular machine if you ask. In these times there is little repair and spruce up work being done on any used machinery in the dealer markets. Most used equipment is sold "AS IS" by dealers. Franchised dealers may give you some whine time and might go so far as to negotiate a better deal on a repair, but then again if you have no other relationship with them, you are probably out of luck. These are all general statements because every dealer is different as is every sales situation. If you know what you are doing you can get a great deal from a dealer or find a gem at the auctions. On the other hand there are a lot of stinkers out there too. BUYER BEWARE!
I to get very upset with many dealers and how much they inflate the prices of equipment, trucks, parts etc.. I do however realize that they to are in this to make a profit and if people buy the machines at these inflated prices the dealer will collect. It is up to the individual to research the machine and be sure they are walking away with what they feel is a fair deal. I have owned many fords and purchased them all through one dealer, i know the dealers son very well. I was told that on any given vehicles they could drop the price of the vehicle by 10-12k and still make money on the vehicle. I am also very close to a general manager at a Kenworth dealership and am told on many truck what they have in it for trade and what they are selling them for to idiots purchasing the trucks. I just purchased a 2000 Mack RD688, Great Condition, Low Miles. They were asking $37,900 for the truck originally. Me and my guy talked it out and I am walking out with the truck for $25,500. They are making about $1,500 and I am a happy camper. In reality, always offer 10-15k less than the asking price and know you will be in ball park trade in value, realize they have to make money.. negotiate something fair and purchase the truck/equipment.
Yes John C. Shills are illegal but it happens a lot. You get a buddy to bid up your equipment then he doesn't pay and you pick up the piece when it is unpaid for...no commission then. The solution is for auction houses to provide data based on the completion with valid payment...not just where it was bid up to. Would be interesting to hear from someone who works at an auction house.
Also, a lot of iron got stranded at dealers in the last couple years because of the downturn. They have a pile of overvalued iron, and no way to sell it at a break even. I think it's not the dealers that are necessarily high, its the auctions(market) that is silly low right now. It won't stay that way forever though, so take advantage while you can...
I think a big reason Cat Equipment holds its value better than most is because of the support structure provided by both dealers and independent shops. Since there are so many Cats around, there are more professionals that specialize in just Cat equipment. Plus, it's cheaper and easier to keep Cats running longer because of the availability of parts.
Not always. Our local auction offers a flat $100 fee if you buy back your own machine.
I am new to the forum and finding this post most valuable as I am shopping a D5 at this time and am trying to get caught up on what the market will bare. It seems that even low hours on a machine doesn't help the value a whole whole lot if the machine is 15 years old or so.
A lot of the differences you see between a asking price and auction is the current market. A dealer may have traded for the machine when times were better and never sold it. Now the bottom has fallen out and the market is now flooded with equipment. People will take less for them now just to get out of the payment. I know a guy who sold a D7 that just had the undercarriage rebuilt. The machine sold at auction for $80,000 the undercarriage bill was probably $60,000! Does that make sense? No, but it helped his cash flow so it helped him. This happens a lot and hurts the value of everyone's machine on here. If you do the research the asking prices are from a year ago or so, thus the high value. Just because the market dropped doesn't mean the invested money in a machine goes away. This applies to owners and dealers. Machines will be a good 401k alternative for a while buy them cheap now and sell them in a year or two for double! There will be a shortage of equipment in the next few years so buy them cheap now if you've got the money!
Before you can obtain a bid number at auction you have to supply your identification. Win a bid and don't pay and you could end up in jail here. As for $100 auction fees, it sounds like your local auctioneer doesn't do much business. Large auctioneers usually run no reserve auctions. Small time players hungry for business play the reserve game. I have found their realized sales are as small as their auctions. As far a items being over priced it is my experience that if someone pays it, then it isn't over priced.
Classic example of something fishy a 07 850j sells at auction for $190,000. Meanwhile there are a lot of the same model advertised for sale at well below this price. Why on earth would someone go to an auction to pay more?
Just my two cents. Auctions tend to increase the price of an item over its value if there is unskilled bidders for the item. How many folks have a grasp of reasonable value? Reasonable value to purchase at Wholesale is completely different than purchase at Retail. Auctions that are of a Local persons stuff may get you a bargain if someone needs to sell desperately. Or you might pay way to much. As for knowing any particular piece of equipments value, that takes expertise and a good idea of what the Market will bare. To get any kind of a good deal Wholesale you need to buy things in lots and be able to take the good with the bad. That is what the Gray market Dealers did was to buy from Auctions of rental/lease return equipment in Japan several machines in a lot. They than pay the shipping. The responsible ones put some time in going through the machine before sale to a individual. Though I would trust a used equipment dealer as much as I trust a used car dealer. Most do not have your best interest in mind. The majority of the Large Auctions you see advertised in the States are not suitable for individual buyers since they lack the expertise in buying from Auctions. If you want to get a good idea of values see what individuals/Dealers are offering a machine for sale. I frequent Machinery Trader as a good resource in valuing equipment. Just like I frequent Real estate adds if I want to get a idea of Local Real Estate value. Research is key.
Well said FurakawaMatt. kmfcap, I'm not sure if this applies to the 850J you speak of but another reason prices for a certain model can be so spread is because of the serial # breaks. For example, back in May, a 769C (Serial # 1X745) sold for $21,000 while another 769C (Serial # 01X04958) in the same auction on the same day sold for $58,000. On the surface, one may suspect "shill" activity but people that know the machines will know that the later serial number has a better engine, an electronic transmission, and i'm sure many more upgrades that thorough research would unveil. Just something to think about.
Yes I do agree that serial nos etc will make some difference. Still the solution to the issues I have is to post whether sales are completed (the money is paid) and who the buyer is. A similar system to housing...considering some of these prices are more than a lot of houses. That way "comparables" are for real.
Did the research. A Deere 750J sold in Illinois in July for $160,000. It was an LGP model with cab and all the bells and whistles. It could be a misprint or someone badly needed that machine soon. We don't know who bought it or where it went. However if you do the rest of your home work you will see the markets for the last 365 days on Machinery Trader. High/Low/Average North America Listings You Searched For: Manufacturer = DEERE; Model = 750J; Year From = 2007; Year To = 2007; Country = USA; Listed Since = 12/20/2008 Auction Prices Equipment For Sale Prices Total number of listings found: 5 9 Highest price found: US $160,000 US $230,000 Lowest price found: US $67,500 US $69,500 Average price: US $111,000 US $136,111 Average w/out High & Low: US $109,167 US $132,214 The average dealer asking price for the same machine without the high and low is just 17% higher than the average auction price without the high and low. Dealers are in business to make a profit. Since we don't know what people of paid for a machine at a dealer, then that is not the market. The confirmed market is the auctions. Individual machines with other than average condition for that year model can be anywhere in those ranges that are presented. kmfcap, you seem to be wanting to pick a fight about your perceptions of markets. In your first post you ask "is it me". From my point of view I think it is.
Absolutely not picking a fight John C. Just trying to find any reasons that explain the large spread in pricing.
Went to an auction that had a floor jack, one you could pickup at the time at sams for 50 bucks. Watched a city boy ( no disrespect) buy it for 100 bucks and proud as a peacock, he was happy paying double retail. I was at a house hold auction with friends bidding on some small item just for fun. The fun really started when my friends realized I was bidding against myself. The auctioneer would just look the other direction and raise the bid. So a good laugh was had at my expense for not paying attention. Bottom line is he could only get what I was willing to pay and if I jumped out he'd be stuck with a stalled bid. Went to a local art auction (fundraiser for the local art group, my sister paints) and bought what I liked, seemed cheap, all the local " well to do" ,of which I am not one, were sitting on there hands. None of the out of towners were there and they mostly support the pricing, so the crowd was wrong. One of the paintings I bought for 80.00 my sister told me at a show would go for 600.00+ For me to sell equipment at an auction would be the last resort for an fast sale and get less than I could sell it for in the paper and to buy it at auction is to check it over best I can and gamble, hope it goes cheap enough to fix whatever is the reason for it being there in the first place. Oh one more story. bought a snow blower at a springtime auction, got it cheap, no body else wanted it. A fellow smirked and said " what you gonna do with that? I said; Not really sure I just got this feelin' winter might come back someday.
The variances in prices is also because of hours differences, which leads me to ask how easy is it to "adjust " hours on a new dozer? I seem to have seen quite a few JD's with very low hours but look like they've done at least 10,000. Can you "adjust" Cats as easily? Would appreciate input from anyone with real knowledge on this.
Pricing Update I looked up some of the auction pricing for the beginning of the year....seems to be some real bargains out there. 07 D6t lgp $75000 ( under 2000hrs). Also saw a 07 D6N go for $111,000 on Ironplanet(to a foreign buyer......). It looks like there are a ton of D6t's coming up at auction in the next couple of months, are there any problems with CAT's newest design?....Can't understand why it went so cheap. Maybe its just the buildup of inventory...kinda like housing.
Auctions low I think there are 2 huge factors going with auctions right now. One with the economy in the shapes it is in, people don't have the money to spend. Going down that road the credit markets are tight, so people who want to spend are having problems getting money. The 2nd is the CA problem.California is not allowing Diesels to be grandfathered with the tighter emission laws. From what I have read starting about 2 years ago this forced a large number of smaller contractors out of buisness and largers ones to get newer machines. One article I read about a year ago was a guy who was a 3rd generation contractor who was going out of business. His fleet average was less than 5 years old, yet only 1 machine was compliant and he could not afford to retrofit or buy all new. This has caused machines to fall in value, in some cases to scrap prices. Now you can buy a machine in CA and ship it anywhere cheaper than to buy local. Dealers some machine may have been setting on the lot for a year or more, and they have money in that machine. They gave someone a trade in at some point probably higher than current auction pricing. What really makes me mad about the CA thing is. The guy who did the study that drove this no grandfather thing was a fraud. He did not have the degree he claimed to have. CARB or ARB knew this before the study came out and did not make in pubilc. It is now just coming to light 2-3 years later. http://www.landlinemag.com/todays_news/Daily/2009/Dec09/113009/120309-02.htm