Buying Used Equipment Makes Sense in Any Economic Conditions
“Better save some money for a rainy day.” We’ve all heard it — and, at our best, we try to live it in our business and personal lives. That’s because we’ve all seen a construction industry peer or two (or more) overextend themselves buying brand new equipment while the economic sun is shining, only to pay the price when grey clouds return.
All in all, there are upbeat projections for the construction market this year and beyond. According to the Fails Management Institute’s Construction Forecast (FMI Construction Forecast: Direction for 2018):
- Individual consumer spending on construction (single- and multi-family homes, home improvements and lodging segments) is expected to grow 5 percent in 2018 over 2017 This spending is being aided by a $1.5 trillion U.S. tax overhaul signed in late December, providing tax cuts to individuals and businesses.
- While spending on infrastructure and government-related services remains flat at the moment, President Trump’s promised infrastructure plan, if passed by Congress, could still spur significant construction work on roads, bridges and more this year, and for years to come.
- Around 75 percent of construction firms plan to expand their payrolls in 2018 as contractors are optimistic that economic conditions will remain strong as tax rates and regulatory burdens fall, according to survey results released by the Associated General Contractors of America and Sage Construction and Real Estate.
The flip side: Contractors are also keeping a close watch on what may happen in labor, both in terms of immigration laws and availability of U.S. citizens seeking work, as a shortage of qualified employees continues.
- The only segments expected to decline in 2018 are sewage and waste and water supply.
So, as in all economic predictions, there’s a little bit of a mixed bag of news, albeit with a lot of positives going on now — or expected to come in the near future. That doesn’t necessarily say, “Rush out and buy as much new heavy equipment as you can,” though.
Advantages of Used Equipment — Rain or Shine
Buying used construction equipment is a smart option that will serve you well, even if the economy looks rosier right now. That’s because market activity is always cyclical. There will be slower times ahead at some point.
Working with a trusted dealer like an IEDA member, you can build your fleet for the good times with well-maintained and thoroughly inspected used construction equipment you can count on without breaking the bank, and with monthly payments you can handle in a less robust economy.
Depending on the purchase, you may invest up to 50 percent less on your used equipment purchase versus buying new. And that is saving money for a rainy day. If you can obtain the equipment you need to be productive and profitable — and it’s safety compliant and technologically sound for the tasks at hand — it can easily be your best move. Good times or bad, the investment required for new equipment can leave you with staggering debt. Further, as an economy heats up, inflation is never too far away, and the “cost of money” can grow, too.
If your area IEDA member dealer doesn’t have what you need in stock, they can tap into the IEDA network of dealers, and other resources, to secure the perfect solution for your business. And, as always, IEDA members operate by a code of ethics that ensures you’re dealing with quality people who provide quality used equipment.
For a list of IEDA members near you, visit the IEDA Member Page.
You can read more about the Fails Management Institute’s Construction Forecast here.