In a previous article, we looked at how you can get the latest pricing and valuation data for free to help guide your decisions when it comes time to sell heavy equipment. But it’s also important – and useful – to know what affects used equipment prices.
A look at factors that affect equipment selling prices
The selling price is whatever the highest bidder is willing to pay for it, right? Ultimately yes, but there are several critical factors and conditions that can affect the value of used equipment. Here’s an overview:
1. Supply and Demand
On a macro level, the laws of supply and demand affect equipment values, similar to the stock market, oil, or real estate – not only on an item-specific basis, but also on a larger scale. When manufacturers decrease their production volumes, it can draw more buyers to the used equipment market, competing for items they can put to work immediately.
2. Brand preference
There is no denying it; all machinery owners and operators have brand preferences. Popular brands generally retain more value throughout their lifecycle. Interestingly, brand preference can vary between particular buyer demographics. In short, there may be more demand for your machine across the border, overseas, or even in another industry.
3. Model and Features
Standard models fluctuate less in price and are often easier to sell than specialized pieces of equipment. Having a specialized machine to sell, it’s essential to not only market your equipment to the biggest audience possible, but the right audience. Features and attachments can also significantly affect the selling price of equipment.
4. Age and condition
One of the first things used equipment buyers look for is the manufacture year and indications of the condition. An older piece of equipment still has value, especially if it’s in good condition. Any piece of equipment, regardless of age, won’t fetch a reasonable price if it’s in poor condition. Getting equipment painted, repaired, or just cleaned often results in a higher price. Also, providing detailed information such as maintenance & repair records, history, and proof of ownership gives buyers more confidence in your equipment which can lead to higher selling prices.
5. Ability to inspect and test equipment
The ability to inspect and test equipment in-person can make a difference in what buyers are willing to pay. Alternately, detailed reports by certified professional inspectors give online buyers confidence in equipment, and help bolster selling prices.
6. Urgency
When a buyer needs the equipment for an upcoming project, it can impact the selling price, especially in an environment where buyers compete for items. Although it’s hard to find out which buyers need your equipment more urgently than others, your best chance is to maximize the international exposure of your items. More bidders mean more competition and better selling results.
Interested in the market value of your equipment? Talk to your Ritchie Bros. representative and find out how we can help you make the best decisions to sell.