With a not real certain economy and possible new regulations etc. Does anyone think, older equipment prices are going to go down from what they are now? Its hard to believe some of the collector car prices on old worn out machines and some of them have been beat pretty hard. I just worry about parting with the $ and then all the prices drop in a few months or so. Gosh a lot of these old 60's and 70's machines were pretty rough back in the days 30 some years ago when I was yanking on levers. And then a person could take possession move the old clunker off the lowboy and have a final lockup, I've seen things like this happen at auctions too. Yeah can check things out real good and still it can happen. If the cost was closer to scrap price an older retired guy could better handle the expense to fix the problem. Sorry for the rant. So is it a good time to jump on something or wait? Prices of junkers is sure inflated, for years now, they aren't made from wood. Ha ha
I think it depends more on your finances and budget at the time you're considering buying. Any time you buy used equipment, that you want to use, you should have a good chunk of extra $$$$ in your budget for unforeseen repairs and maintenance. Too often you read about someone buying a used machine and then finding out it needs a bunch of work done on it they didn't budget for. Even simple things like oil and filters. The thread on the PC60 excavator is an example. Questioning the cost of oil and filters and trying to cheap out looking for alternates would drive some to the rubber room. There can be less expensive options that meet the OEM specs. but for certain things, it's often better/easier to just get the OEM parts. If oil and filters are too expensive, what happens if it needs cylinder seals or a hyd. component repaired... The machine sits because the buyer can't afford to fix it or they keep using it until it has a catastrophic failure? I think the decent older machines that farmers or hobby type users buy will hold their value and maybe even increase in value as they become harder to find. Look at a skid steer. A decent name brand like Bobcat will come down to around $10,000(cad) and still be quite useable and not completely clapped out. Will probably need some repairs such as pins and bushings or cylinder seals but runs good otherwise. There may be some older models a little less but generally under 10K you can expect it is worn out or requires extensive repairs that make it uneconomical. Someone who is experienced with fixing equipment can sometimes do good buying a machine for less and being able to do all or most of the repairs themselves. Others that need to hire a mechanic could spend more on fixing than the machine is worth. I think a smart approach is to buy a machine figuring it needs a lot of work and budget a worst case scenario for repairs. Then if it doesn't need as much work they feel they got a good deal.
Problem is depending on regulations and other unknowns that could devalue any older machine. Yes there is scrap value but it costs time and dollars to turn it into scrap, I know of a few deals where the owner had to pay thousands to get rid of the scrap. That was aircraft related.
The only easy answer is dont go into the business if you dont want the risk Equipment value is one the but the value can also be infinite because what you can perform and charge with said equipment sure there is risk with breakdowns of major components but that happens and brand new iron as well so buying a used piece in good condition at a premium is okay if your getting your investment back used equipment should never be thought of as able to resale that's just a bonus
This X2. Business is all about calculating the risk vs reward.
And most times the reward really doesnt match the risk
Sometimes it does and that's why we're in the business.
'No Risk = No Fun!' Those who risk warrant the possibility of making big returns, but at the expense of stability. Keep the daily 9-5 grind and a paycheck for stability. Risk it all for big returns and the possibility to improve beyond the grind. Sorry, I have been listening to motivational entrepreneur speeches lately. I'll be back at the grind tomorrow morning. I think the high in the economy will continue to rise. I'm questionable what will happen after reality sits in for all the builders/ buyers paying for an inflated realty. It will either create huge inflation and or a collapse in the economy while we rationalize back to a more normal rate of business. $9-$10 priced 2x4's are crack prices! Buy a decent machine with an educated purchase. Scrap machines, why they can be made usable, are just not a good foundation for a business. However, I will buy scrap priced machines all day long largely for nostalgia. If I wanted to base a business on a piece of equipment I would opt for 'newer' more realiable machines. Happy hunting!
Right now its just the machine not a business.
Ah I see....I think good deals can still be had. You just have to look hard and be patient. High scrap steel rates do have some reaching for the big bucks. I noticed all the auction stuff I watched over the last year sold for what I thought was over the top prices too.
Today number 1 scrap steel is $231 a ton, not sure what number 1 is. I just know scrapping takes money just watch those scrapers in the other country's taking ships apart. So 80k scrap is $9240 so any old worn clunker costing more than that is over priced, well if it runs okay then add $5k to it. Most all those old things have paid for themselves many times over. With the coming regulations that will make it so old non compliant machines can not be used for any business, maybe private will be okay for a little while, this is one reason I don't understand such huge $ for almost half a century machines that should be considered antiques. I just don't get it.
I tend to enjoy fixing what others consider junk. Often to no prevail since the parts can quickly surpass the value of the machine. My last scrap adventure yielded $0.095 per pound. That is the general shredder steel pile. I have an old cabover truck out back now. It's scrap yet I have this weird desire to try fixing it. Darn nostalgia kicks in everytime I look at that rusted out frame. I haven't been in the market for equipment, but I have been eyeing a few things. One was an early JD450 dozer none operational it went across the auction block for almost $7K. The other was a 4900 International Tractor/semi it sold for almost $9k with over 13k engine hours. Both way too much for me. The trick is being patient enough to find a good deal and knowing when to stop bidding. I think sometimes the desire to win exceeds common sense at these auctions. Keep looking you'll find that special piece of equipment and or it will find you one day when you're not paying attention.
Well, depending on how much you need done, renting a machine is always a viable option. Several contractors on this forum rent when they don't have the right machine or enough machines for a job. I've personally rented at least 1 machine a year for the past 5 years. I always end up needing something that I don't own, and I just can't quite justify the cost of purchasing. More recently, a high powered stump grinder. They are stupid expensive, and very cost intensive to own new or used. But, I can rent one for under $500/day. So, when I remove trees and the customer wants the stump ground, I inform them that I line up several for one day and they will get a call in the next month of when I am grinding. Then I rent a grinder and do multiple customer's stumps in one day. Same applies to dozers, excavators, skytracks, etc.
What exactly are you talking about? Bob
The inflated prices of well worn and used equipment, with years of metal fatigue, that are painted gold.