Buying new lets you to take advantage of the performance enhancements provided by the latest technology, but a used purchase can significantly reduce the initial capital investment required.
When purchasing a new compact excavator, there are strategies you can use to ensure you get the best deal possible. First, do some research to establish the market value of the base machine and the optional features you may want included. Then, look into the types of financing packages offered by suppliers.
"When purchasing a compact excavator, look for manufacturers that offer low-rate financing – as low as 0% for 48 months and longer," advises Paul Oh, finance manager for Kubota Credit Corp. Finance program offers change routinely with manufacturers, so it's important to check with your local dealer to determine what's available.
"Watch out for low rates and short terms, and monitor your payment levels," Oh adds. "If you have great cash flow, you may wish to consider cash in lieu of financing."
Sizable discounts may be available if you're willing to be flexible. "There are large discounts on certain models (aged inventory, old models being moved to allow room for new models, etc.) as manufacturers look to reduce dealer inventories of those models," Oh points out. "Extended warranty is sometimes included for free, and there may be generous trade-in allowances."
Also consider including attachments in the bargain. Dealers will often sell equipment packages at a discounted rate compared to purchasing the excavator now, then buying the attachment separately at a later date.
"Your favorite or most-needed attachment may have discounts," says Oh. "Consider that purchase of an attachment may open up opportunities through additional services to expand your applications and jobs."
Track Used Equipment Values
Depending on market conditions, a used equipment purchase could get you into a late-model compact excavator at a fraction of the cost of a new machine.
"When a rental company sells a used piece [of equipment] – because it is four or five years old – it's typically 40% less than new," says Steve Michaels, vice president of fleet operations, Neff Rentals. "So instead of having to buy a $50,000 excavator, if you buy a good quality used one, you may only spend $30,000."
However, it's even more important to do your homework to ensure you're getting the best value based on the machine age, hours and condition. You can track used equipment pricing using auction results on established websites such as rbauction.com (Ritchie Bros. Auctioneers) and ironplanet.com, as well as via the Rouse Report (rouseservices.com), a free monthly newsletter.
You may be surprised at what you find. "Used equipment is at a pretty high premium at the moment," says Wes Becker, director of dealer development, Doosan Infracore Construction Equipment. "Compact excavators are performing very similar to all compact equipment, where the used equipment values are remaining high compared with past years. That could remain high for some time based on the coming effects of Tier 4.
"One of the pitfalls is not taking advantage of newer technology," he continues, "and as new technology comes on, you can't hold onto [existing equipment] too long. Some of the older machines will lose value at some point. It's similar to the automobile industry in that manner."