New manufacturing equipment comes with all the latest bells and whistles. Those are nice to have and may even help reduce waste, raise efficiency or improve quality, but can you really afford them?
Like shiny new cars, most new manufacturing equipment suffers steep depreciation in its first few years. This means the savings on a used machine may well outweigh the additional savings from having the latest controller or higher-speed drives.
It’s probably obvious that saving money is the biggest reason for buying used manufacturing equipment. It’s not the only reason though. Here, in reverse order, are five (other) reasons manufacturers should explore the benefits of buying used.
Match existing equipment
Whether adding capacity or replacing a worn-out machine that’s served you well, don’t underestimate the benefit of buying the same again. You avoid adding to your inventory of spare parts and you don’t need to buy new tooling. In addition, operators and the maintenance crew already know how to set up, run and maintain it.
Carry less depreciation on your books
Less depreciation lowers the cost of everything you make on that machine. Plus, if you decide to get rid of the machinery before it’s fully depreciated you’ll take a smaller hit.
Take on work that would otherwise be uneconomic
Lower capital investment and less depreciation can make you more competitive when bidding for new business. Plus, you’ll be able to take on smaller quantity/shorter run orders because you’re not looking to recover the higher costs of new equipment.
Get it faster
It’s rare for a machine builder to have the exact new machine you want in stock and ready for delivery. Pre-pandemic, many companies would quote six months or more, and those lead times have only grown longer. When you buy a used machine you can not only take delivery in just a few days or weeks but if it’s a model your people know you’ll have it running in less time too.
This is the benefit everyone looks for – less risk. Fact is, there’s always an element of risk in buying new machinery. This results from uncertainty over the work you’re buying the machine to do. What if the customer disappears? What if the market changes? What if the projected volumes never materialize, (and what if they’re double or triple what was forecast?)
The lower purchase price of a used machine means there’s not as much at stake. Your costs are lower, you’ll be more competitive, and if the worst happens and the machine has to be sold you may come close to breaking even.
The Equipment Hub for New and Used Machinery
When you need additional capacity, you’re expanding into a new area, or just need to replace worn-out equipment, new machinery can look very attractive. The reality is though, you’ll pay a steep premium for what may be marginal improvements over similar but used equipment. There are a lot of benefits to buying used. We’ve shared the top five here but every situation is different. That’s why we encourage you to discuss your equipment needs with us. We deal in both new and used machine tools and can offer buyers a range of affordable solutions. Contact us and let’s talk.
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