Purchasing used commercial equipment can deliver significant savings. Used equipment typically costs less up front, and buying used generally won’t prevent you from taking advantage of tax deductions and flexible financing.
But despite all the advantages, buying used equipment comes with risks and potential downsides, too. Follow our checklist for used equipment to make sure you don’t end up wasting money instead of saving it.
The Used Commercial Equipment Checklist
1. Is the Manufacturer of the Equipment Well-Known and Dependable?
Try to buy equipment designed and manufactured by a company with a history of producing reliable products. Major manufacturers offer warranties even for used equipment, and you’ll have an easier time acquiring replacement parts for equipment created by a major manufacturer. If you haven’t heard of the company that manufactured the equipment, you should research them thoroughly to learn about their reputation and history.
2. Is the Seller of the Equipment Reputable?
You can buy used commercial equipment from a variety of sources, including vendors and private parties. (You can also purchase used equipment directly from Team Financial Group.) When looking to buy used equipment from a company or individual you haven’t worked with before, try to find out how long the seller has been selling commercial equipment. If possible, gather information from their past customers. Don’t be afraid to ask for references or testimonials to help vet the seller and establish their reputation.
3. Does the Owner History Suggest the Equipment Has Been Treated Well?
The buyer and seller history should show how many years the equipment has been in use and how often previous owners used the equipment. The history should also show what type of work previous owners used the equipment for. Make sure to ask for this history and inspect it carefully since some industries and uses may put more wear and tear on equipment than others.
4. Is the Equipment Free of Visible Damage?
It’s always best to see the equipment in person so you can inspect it for common defects and problems. If you don’t have significant experience with the machinery in question, bring someone who does.
You’ll want to look for clear physical damage but take the time to look closer as well. Some less obvious visual signs that might indicate equipment is damaged can include:
- Evidence of oil leaks or other fluid leaks on and under the equipment
- Mixing of coolant and oil
- Foam in fluid reservoirs
- Evidence of significant after-market welding or other repairs
5. Does the Machinery Pass a Test Drive?
Even an expert can’t identify all potential issues just by looking over the equipment. If possible, you should take the equipment for a test drive and confirm that the engine starts smoothly. Make sure the machinery runs for at least a few minutes and watch for unusual smoke, smells, shaking, or noises. Also, don’t forget to check for high system temperatures during operation.
6. Does the Condition Match the Seller’s Description?
If the equipment you see doesn’t seem to match the original description provided by the seller, you should back out of the transaction. If you’ve spent a fair amount of time researching the equipment and finding the right seller, you might feel invested in the transaction, but you should never feel pressured to purchase equipment when it doesn’t match up with what was promised. Most likely, if the seller misrepresented the equipment, they aren’t someone you can trust, and they may be hiding other issues with the equipment as well.
7. Are the Age and Condition of the Equipment Appropriate for Your Needs?
If you only use a piece of equipment occasionally, you might be able to go for an older model or an item that’s been used heavily. On the other hand, you or your employees plan to use a piece of equipment frequently or for long intervals, buying an item that’s too heavily used might lead to early replacement, which could cost you more in the long run. Be realistic about your needs and make sure you’re purchasing equipment that makes sense given your long-term usage patterns.
Team Financial Group Provides Financing for Used Commercial Equipment
At Team Financial Group, we finance both new and used equipment whether you’re buying from a company or an individual. We’ll match your needs with the best financing option and help you acquire the equipment you need.
Ready to get started? Fill out our easy online application and get fast, flexible financing today.
The content provided here is for informational purposes only. For financial advice, please contact our commercial financing experts.