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  • Direct Capital


When should you replace instead of repair your construction equipment?

When should you replace instead of repair your construction equipment?Knowing when is the right time to replace instead of repairing equipment is a balancing act that every contractor faces. At some point in the life of machinery, there comes a time where you need to retire a machine and invest in a late model machine. After all, you don’t need to buy new to get something more reliable. Quality used equipment can save you thousands of dollars while still delivering the dependability you need every day.

To determine when it’s time to replace or repair a machine, you need to look at the cost of downtime, maintenance expenses, utilization, company needs and resale value.

Costs of Downtime
When you work in the construction industry, you know the reality is that your machines will break down. Downtime from equipment failure delays jobs from being completed, costs you money in repairs and causes your crew to sit idle. It’s going to happen no matter how new your equipment is, but it is likely to happen more often with mature equipment that has been worked hard or is not well cared for.

Determining how much downtime is too much can be difficult. That’s why it’s important to build time in between jobs to inspect the condition of your equipment fleet. You want to look for potential machine wear that could cause issues on the next job and address those needs beforehand.

By performing routine inspections before a machine goes down, you give yourself more options. You can do a better job of estimating how much a repair will cost, or you can begin looking around for a more reliable machine that you can trade for or add to your fleet. You’ll receive more in trade-in for a machine that is working than for a machine that requires major repairs before it can be resold.

Maintenance Costs
Beyond the price to repair a machine, you need to also factor in how much an older machine will cost, versus a newer unit, in maintenance expenses. Machines with higher hours will likely have more frequent day-to-day maintenance issues.

Utilization Considerations
You need to also look at how much a machine is being utilized. For equipment that is running all week, every week, you can’t afford to take chances with downtime — you rely on it too much. However, if the machine spends days or weeks sitting idle, making needed repairs may be a better solution.

Jobsite Needs
Your equipment needs have most likely changed over time, and that can often mean doing work with equipment that is no longer the best fit for your current workload. Perhaps it’s bigger or smaller than your current needs but, since the unit is already in your fleet, you’re determined to make it work anyway. That’s a short-term solution to a long-term issue. If you practice this approach too long, you may wind up investing in major repairs instead of using that money to buy equipment that is better suited for your current needs.

Residual Value
How much is the machine worth if you were to trade it in on another machine or sell it outright? Once you determine how much you can get for the machine, you have to decide if it’s worth that or more to you. Keep in mind — used equipment pricing can vary a lot based on market conditions. Your used machine may be worth more in another part of the world than in your backyard, so you’d be wise to seek the professional opinion of a member of the Independent Equipment Dealers Association.

Machine Performance
Finally, you need to evaluate if a newer machine will increase your crew’s productivity, and if it can reduce your fuel costs. Newer machines have more advanced technology and are more fuel efficient. You don’t have to buy brand new equipment to take advantage of those improvements either. There is a lot of great used equipment available with all of the latest features, which means you can get what you want and save thousands of dollars in the process.

There is a lot to consider when deciding between repairing and replacing a machine. Just remember, every machine will need to be replaced someday. It’s up to you to decide when the time is right to repair versus replace.


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