Ways to Buy

 TIPS FOR PURCHASING EQUIPMENT 01Here are some tips for purchasing equipment.   

By Ryne DeBoer and Willy Schlacks

Construction fleets don’t come cheap. With a compound annual growth rate of nearly 8 percent, the global construction machinery market is expected to surpass $270 billion by 2023. You can stretch your budget as equipment prices rise by considering how new technology can keep equipment up and running. 

Better yet, browse the used construction machinery market and take jobsite conditions into account before finalizing a purchase. Additionally, telematics technology gathers utilization data that should push you in one direction or the other when it comes time to purchase. 

The past informs the decisions that we make in the future, especially costly decisions. If you don’t understand how your previous purchasing decisions affected your ROI, your equipment utilization, service costs and uptime, then you’re just guessing when it comes to your equipment-buying decisions.

How do you understand and gather this type of information to guide your future decisions? When telematics technology is implemented across your fleet, you can understand at a granular level what type and brand of machines perform best and help you achieve the highest ROI. This type of information helps you make future choices about which equipment you need and which equipment is not worth your investment.

Try New Technology

The global commercial telematics market could reach $69.3 billion by 2022 – a significant spike from its $18.9 billion valuation in 2015. What’s fueling telematics’ growth? Look no further than the benefits telematics technology brings to the table. Instead of assuming where each piece of equipment is located, telematics helps you keep tabs on your fleet from a single screen. Alerts that notify you when a machine exits a jobsite shorten the time it takes to halt unauthorized use and theft.

Telematics also opens the door for less costly repairs over the course of a vehicle’s lifecycle. From the rate at which fuel is being burned to the average engine temperature, real-time data gauges each machine’s utilization. A heavy workload could highlight the need for preventative maintenance. Schedule repairs sooner rather than later to avoid problems that will eat into your budget.

Beyond slashing maintenance costs, telematics improves driver behavior. Monitor incoming data, such as a vehicle’s average speed, to determine which operators need to take their feet off the gas pedal. Since telematics tracks your fleet at all times, it’s easy to see which drivers act on your suggestions.

Additionally, telematics records equipment usage rates, and utilization is directly linked to ROIC. This helps owners understand if they need to purchase more equipment for the job or, conversely, if they’re not using the equipment enough to get a solid return on their investment. 

Buy Used

New isn’t necessarily better. You can get more bang for your buck by browsing online marketplaces or auctions for used equipment. Although some machines may be on their last legs, others will have enough life left to get the job done. If your search doesn’t yield results, reach out to colleagues who are looking to sell. From an upcoming relocation to clearing space for more advanced equipment, there are many reasons why fleet managers might want to unload a piece of equipment. Save a few bucks by contacting potential sellers before they open up the bidding process.

Once you find used equipment that’s worth considering, assess its durability with a test drive. A five-minute trip to inspect the vehicle in person will shed more light on the condition of the vehicle than pictures or a written description. Keep your phone on hand to check for replacement parts because new issues might pop up during the test drive. By ensuring spare parts are readily available, you’ll avoid purchasing equipment that’s one breakdown away from being rendered useless.

Consider All Your Options 

It’s important to understand where the break is in your choice to rent versus buy. This specific decision has proved to be a tough one for contractors year after year: spend high dollar amounts on renting equipment; or shell out a large amount upfront to purchase equipment that sees a lot of downtime. 

Fortunately, some industry players are changing the way contractors make this choice. Programs such as EquipmentShare Own simplify this decision by maximizing the benefits of ownership and renting. You can purchase equipment and rent it to other users, thus monetizing your owned equipment and creating opportunities to earn rental income — all the while maintaining access to the equipment you need. These options make the decision to purchase far less daunting. 

More information improves your ability to buy equipment for what it’s worth. Track down a machine’s average selling price to ensure you’re not spending too much – or too little. If a deal seems too good to be true, it probably is. Double check that the piece of equipment has everything you need prior to completing a purchase.

Vehicles that work in freezing temperatures, for example, may require AGM batteries. In addition to increasing vehicle lifespans and ultimately improving fleet efficiency, AGM batteries can make your jobsite safer. Too often, frozen batteries combust while charging. But with AGM batteries that are designed to handle even the coldest temperatures, issues that pop up during charging could become a thing of the past.

In the same way that weather conditions can influence what’s included in a vehicle, terrain plays an important part in determining the final purchase price. If heavy rains are common across your job sites, opt for tracked machinery instead of wheeled. Although the price of vehicles could increase, an extra feature like tracked machinery is necessary to get the most out of your fleet.

Given the rising cost of construction vehicles, there’s not much margin for error when putting together a fleet. Make every dollar count by taking precautions: doing research prior to purchasing and reviewing all of your options before writing any checks. From the benefits telematics technology delivers to jobsite conditions and opportunities to monetize your own purchased equipment, consideration of several factors can increase your chances of making the right purchase. 

Ryne DeBoer is the vice president at electronics manufacturing services provider Morey. His primary role is to lead strategic growth for Morey as the company continues to innovate and expand its services and customer base. 

Willy Schlacks is the president and co-founder of EquipmentShare, a contractor solutions platform. He has over 20 years of experience in commercial construction, building, and leading businesses and developing technology solutions. 

 

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