Some business owners will turn to construction equipment financing in order to purchase pre-owned heavy machinery. There are also thousands of used heavy equipment and trucks that you can choose from.
However, despite the cost savings incurred by buying used, many people are hesitant to do so. They fear that used products will break down quickly, and that they will need a lot of money to maintain.
Here, we will discuss some tips that can help protect you when you are shopping around for pre-owned heavy machinery for your construction business.
Buy From a Reputable Seller
Begin with public company records. The company needs to have a proven track record of success. They need to be well established with a long history and a substantial client base.
Companies that trade publicly are required by law to publish their financial statements. As a result, you can go over their financial records in order to gauge their stability and whether or not they are here to stay.
You can also study online reviews to determine if the company is right for you. Read unbiased reviews from customers via Facebook and Google, as comments there cannot be removed or even edited by the proprietor of the page once they have been submitted. Customer testimonials are also important. If you are unable to find any on the company website, then call them and request some information so that you can contact their recent customers.
The Better Business Bureau may also help. The BBB provides the contact information of thousands of different businesses. You can also visit their site to go over customer complaints.
Perform a Background Check
Before you begin buying used heavy machinery, you need to ensure that the seller is the actual legal owner of the machinery. At the very least, they should have the legal authority to sell the item on the seller’s behalf.
Liens and stolen equipment are more common than you may think. If you are buying the item from a business, then you should ask them if the machinery is owned by the seller. If they are unable to confirm, then you must perform a background check of your own.
Or, if you are buying from a private seller, then ask them to provide the sales invoice for the machinery. Then, cross-reference the sale’s invoice name with the seller’s name to ensure that they match.
Ownership can also be verified via the truck’s VIN or the serial number on the machinery. A private service or the police department can run a VIN or serial number check for you to determine if an item has been reported missing or stolen.
Also, if you wish to finance your purchase, ask a financing company to perform a background check on the item’s history. They can determine if the equipment has been reported stolen as well.
Ensure there is a Clear Title
The heavy machinery that you purchase must be clearly titled. Otherwise, you may have to forfeit ownership of your equipment. In some cases, the seller may not have paid for the item entirely.
Failure to pay back the full amount owed to a financial institution is known as a lien, which you must avoid at all costs. A lien may also force you to forfeit ownership to the institution that lent you the money in order to buy the machinery.
Perform a Thorough Inspection
The majority of heavy machinery in the second-hand market is sold as is. We would recommend that you inspect and test the machinery before deciding if it is right for you. An experienced operator or qualified mechanic can be hired in order to inspect and test the vehicle if you want the advice of an expert.
Also, if you are thinking of buying the equipment online, then make sure that you have obtained detailed photos and information on the equipment beforehand. Consider, as well, contacting the seller via email. Ask them to send you pictures from many vantage points. Do not hesitate to ask any questions about the machinery to better gauge its worth. They should also be willing to provide you with detailed maintenance and service records upon request.
Leave a Payment Trail
If you are buying the machinery from a private seller or online, then you need to have some form of recourse in the event that the equipment does not arrive. The machinery may also be in a condition that is quite different from that described in the ad and/or images.
When buying online, only do so from websites that have a secure escrow process. Do not forget to go over the terms and conditions of every online transaction before you commit to buy. The seller must provide you with an invoice or receipt upon purchase, and with documentation that names you as the proprietor of the item.
Also, if you decide to buy the heavy equipment from a private seller, then we recommend that you avoid paying in cash. Instead, we suggest that you leave a paper trail in order to have proof that you paid for the item in case the transaction is not completed. For example, you can pay with a certified check instead of cash.
Buying pre-owned heavy machinery for your construction business can save you thousands of dollars over the long term, but there are some risks involved. However, by erring on the side of caution and performing the necessary due diligence, you can obtain great deals that can help your business thrive and expand.
Truck Loan Center
If you would like to learn more about or even obtain construction equipment financing, then please visit our website. We specialize in equipment loans, account receivable factoring, small business loans, and construction financing. We can also be reached at 1-866-230-0094.
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