A new report in the Wall Street Journal details the rapidly growing second-hand market for heavy equipment machinery, happening all around the world. As it turns out, that news might be great for buyers (not to mention companies that sell heavy equipment parts), but worrisome for manufacturers like Caterpillar, Volvo, and Deere.
Many construction firms and other heavy equipment users are realizing just how much money they can save by purchasing, renting, or leasing used CAT parts and machines instead of buying brand new ones. Since most types of construction equipment have a life expectancy of 15 years, and some can get up to 25 years of use or more, many look to the used market when they need to expand their fleets or upgrade outdated equipment.
Higher numbers of leases and rentals have in turn led to a glut of used heavy equipment parts in the second-hand market. Often, heavy equipment breaks down with plenty of life left in them, and all that's needed is replacement hydraulic cylinders.
"There's a lot of machinery sitting around," said Bill Yurkovic, a used Caterpillar dealer in Pennsylvania and West Virginia. "It's as bad as it's been in my 30 years. A lot of renting. Not a lot of buying."
The good news is that, for buyers, prices for heavy equipment components are down 10% from this time last year. But those prices also make it difficult for the manufacturers to make appealing offers on their new models. So the used-equipment leasing and renting cycle continues.
"When the economy is down, that's a good time to update equipment," said Mike Jeffries, general manager of United Contractors, a highway-bridge builder in Iowa. "We're trying to get rid of our older equipment and then buy newer stuff."
Even better deals can likely be found on used equipment that might simply require a little bit of maintenance. Servicing or replacing commercial engine cylinders or Hardox plates, for example, can increase the payload and extend the service life of used heavy equipment.
While manufacturers continue to look for new ways to make their new models bigger and better, the used market offers more opportunities than ever for quality equipment to get the job done.
If you're looking for the most reliable used Caterpillar parts, Komatsu engine rebuilders, or heavy equipment parts Long Island has to offer, contact us or browse our inventory today.