New or Used Construction Equipment - The Return on Investment Decision

It has always been a debate whether to buy new or used construction equipment. Smaller fleets prefer to buy used construction equipment as they attract less capital investments. Another reason for people to opt for used construction equipment is that they are sometimes as good as new and come at a very heavy discounted price as compared to that offered at the showrooms.

Moreover, Associated Equipment Distributors (AED) and TradeYard, Inc, have jointly announced an alliance that shall provide certified inspection of used construction equipment that can also be sold online. This has been done to boost the business-to-business sales via online medium. It gives better promotion to the sale of used construction equipment and buyers to be confident about their purchase. Usually buyers buy the used construction equipment only upon the preliminary inspection done by the technical agent from either the buyer or the seller side. Since a neutral and unbiased inspection report shall be available it would lead to increased sales and more profitable bargains to small investors. Small fleet owners usually opt for used construction equipment sold from earlier projects. Large construction companies that carry huge fleet of construction equipment can also strike a good bargain at onsite purchase of such certified used construction equipment.

There had always been a skeptical attitude towards the economies in the Indian sub-continent, Russia or Latin America. But over the past years these economies have shown a constant and steady growth. The demand to construct new projects or to renew the old ones has been always in demand. Since these countries are not as cash rich and affluent, they usually have constructors who have smaller fleet. Moreover, they also do not have enough capital to be invested in developing a large fleet. They are always on a look out for used construction equipments. Along with this these constructors take on projects in the neighboring countries and shifting heavy and used construction equipment is also not feasible. Thus sales of such equipments is constantly in demand

Apart from the projects in these countries, bigger companies take up their projects in the continent of Africa and also the Gulf countries. Thus they opt to buy used construction equipments available locally from the companies or constructors who wish dispose off their fleet. The used construction equipments are also on the sale due to the feasibility reasons that lie on the seller’s side as well. The construction companies who have finished off their projects in foreign lands and take up projects in other countries, for such large companies it is more feasible to dispose off their used construction equipment and assemble a new fleet at the onsite location rather than carry them to the new land. This is due to the reason that various countries have different rules for export and import of heavy equipment required for infrastructure development.

Some countries impose heavy taxes and import duties to restrict import of used construction equipment. This is done to prevent the domestic markets and small construction companies with limited resources. Further, export of such used construction equipment requires various documentation procedure, inspections and other legal formalities. All such activities are not only tedious but also time consuming. These formalities also require lot of duty fulfillment at both the ends. Moreover clearance at the ports and damage caused in handling and shifiting these equipments is also very tedious job.

Thus construction companies prefer to buy new or used construction equipment locally. Only Large construction companies or companies who have strategic partnerships in the local market for a company prefer to import a part of their used construction equipment for their ongoing projects.

Chris Warren, Construction Equipment engineer - focusing on Heavy Equipment Auctions and Heavy Equipment.

Estimating the Market for Construction Equipment Sales

Heavy construction equipments are required in all parts of the world. Their demand has increased all the more after the growing economy in the Indian sub-continent, Middle East, Far East and Oriental nations as well.

Countries like China, Singapore, etc. are developing at an exponential rate in the area of infrastructure development. Chinese infrastructure has become so strong in the recent past that even the interior cities and remote areas are also well laid with clean broad roads, buildings, shopping malls, bridges, etc. All this growth has let to increase in the construction equipment sales.

Construction equipment sales had been most in the western regions in the decades of sixties to mid-eighties. But in past twenty years the economical growth in the eastern part of the globe had been exponential. The rise in the middle class and better earning resources has led to the growth of the economy. This growth has called for more development of residential and commercial outlets, etc. The increase in the development of such outlets has led to increase in the construction job works. These job works have adapted to the changing developmental pattern thus construction equipment sales have gathered pace equivocally.

More and more builders and architects have come together and large construction companies have built boulders all along the economical growth. Huge towers, shopping malls, big broad roads, expressways, highways, bridges, flyovers, etc. have led to the increase in construction equipment sales. Since all this development work calls for larger companies to shoulder all kinds of job works, many companies have made strategic partnerships, joint ventures, governmental bodings and alliances with the domestic counterpart for better growth. All these large companies have built up their own construction fleet along with the construction specific manpower.

These construction equipment sales are usually related to the iron and steel prices. Since there have been more excavations for the iron ores and new outlets, iron and steel market has grown at a healthy pace in these developmental decades. The large projects require heavy capital investments. In developing countries the cyclic rotation of capital is more regulated and strategic. Thus the investors are able to opt for large borrowings and generate their own capital for purchase of heavy construction equipments. Thus the heavy equipment sales in these countries are more properly funded and less prone to financial risks.

In case of construction equipment sales pricing is also an important factor. It determines the extent of sales or whether the constructor would prefer to go in for rental equipment. Pricing also acts as a determinant of demand in the market. Demand is led as per the specific country, availability of these equipments in the region, prices of iron and steel, etc. moreover, for the construction equipment sales financing of the purchase of the construction equipment acts as an added advantage and gives a competitive edge in selling the equipments. Financing the purchase leads to increase in the construction equipment sales of the manufacturers.

Thus construction equipment sales are more or less directly dependent on the pricing structure and financing available, as it gets included in the project cost. These sales are more prevalent in the growing economies where more infrastructure developments regularly take place.

Chris Warren, Construction Equipment Sale engineer - focusing on Construction Equipment and Heavy Equipment Auctions

Making Capital Investments in Heavy Construction Equipment

Heavy construction equipment requires a lot of capital investments. When the companies opt to buy these types of heavy construction equipments then they look out for the used equipments that may be on sale in the local market. This helps them in various manners. Companies sometime get used heavy construction equipment which are as good as new but the cost is much lesser than that offered in the showroom. Moreover, buying heavy construction equipment from the local market reduces the transportation cost as well. These overheads not look good in the balance sheet as they lead to increase in the project costs.

Financing is a major concern while buying heavy construction equipment. Most of the companies look out for times when the interest rates are low and they can strike a good bargain. In developing countries the rate of economic growth determines the external investments. A healthy growing economy attracts heavy foreign investments. Thus since the financial inflows are more the interest rates are much low. Thus buying heavy construction equipments or taking them as rentals is much more economical.

After the opening up to the markets and signing of the GATT agreement by most of the countries there has been increase in the competition and reduction in cost of equipments. Moreover, the heavy construction equipments have been manufactured at more locations than before. This trend has been on increase to serve the global market and cross-country support for infrastructure development. Moreover, there has also been increase in the duty-free import structure in the economies. But in case of the growing economies, increase in exports and development of local markets is still required to support the imports in the countries.

Demand for heavy construction equipment is more region-specific. In US markets and Western Europe, requirement for up-gradation of the locations is more required rather than developing new projects. These countries require maintenance and upgrading of the existing projects, which is more crucial for the existing infrastructure for long time sustenance.

In case of developing countries, building up of rail, roads, flyovers, high-rise, airports, and urban development is more crucial. All this requires lot of construction work, which requires use of heavy construction equipment. The largest producers of heavy construction equipment are located in the U.S., Japan, Germany, the U.K. and France, followed by Italy, South Korea, Canada, Sweden and Belgium. There are manufacturing units located at other locations also like China, Russia and Latin America. More manufacturing units for heavy construction equipments are expected to crop up at locations, which offer low material costs and cheap labor.

Heavy construction equipment is also available on rent. These can be leased out easily from the domestic market. It is much more beneficial to take the heavy construction equipment on rent or on least for a day or few days rather than purchase them and then sell them at lower cost or carry overheads like transportation, maintenance, etc. Buying heavy construction equipment is not much preferred option. Mostly in the US, long-term leasing is much more preferred over purchasing due to tax structure.

Chris Warren, Heavy Equipment Auctions engineer - focusing on Heavy Equipment Sales and Used Heavy Construction Equipment

Acquiring Construction Equipment

Many companies and contractors in need of acquiring new or used construction equipment often don't have the financial resources needed to buy the construction equipment outright, unless it is a large corporation or some branch of the government. This is when the option of renting or leasing construction equipment comes into play. Deciding to rent or lease often depends on what the contractor or business manager feels most comfortable doing from a financial perspective after evaluating the many possibilities and deciding what suits their need from long term leasing to short term renting. The side of construction equipment rentals has met a positive growth since 2004, where nearly 50% of construction equipment dealers' are offering heavy equipment rentals as part of their operation.

There are two ways most companies acquire their construction equipment, renting or leasing. Many contractors or business managers viewed renting or leasing as an opportunity to test out construction equipment at no extra cost and with no strings attached with the possibility of buying. Most often the rental would be converted into a purchase to avoid losing the invested equity. Most buyers would also take into account whether their business is flourishing or floundering, before committing to buying any construction equipment. In a case where a business has an uncertain future, the potential buyers may deem renting as the best way economically and then return the construction equipment to its owner when the job is done.

The Association of Equipment Manufacturers (AEM) is the international trade and business development resource for companies that manufacture equipment, products and services used worldwide in the construction, agricultural, mining, forestry, and utility fields. The AEM has conducted a survey that predicted that in the near future, more construction equipment buyers will turn to the Internet for product purchases; as construction equipment buyers increasingly turn to the Internet for transactions, information and support.

Consequently, the rise of on-line auctions, sales, renting and leasing are made available by a variety of merchants who cater to the needs of companies and contractors worldwide. On-line merchants such as: Machine Mart, Rock & Dirt, Machinery Trader, Iron Planet, Contractors Hotline, etc. are only a few of the leading markets where companies and contractors alike can find nearly every piece of construction equipment they are looking for, from the top manufacturers such as Caterpillar and John Deere to many more. Many of these merchants offer the options of buying, selling, renting and leasing of new and used construction equipment to parts service and repair and machine maintenance. It's always wise to investigate the background of any merchant before you place a bid or purchase any construction equipment, to ensure a good reputable stand point before entering into a contract with any dealer or merchant. It's always wise to shop around and compare deals on construction equipment to other offers before committing to any deal.

Chris Warren, Construction Equipment Sales engineer - focusing on Heavy Equipment and Heavy Equipment Sales

The Parallels of Economic Growth and Construction Equipment Growth

With the rise in the growing economy there has been increase in the development of the infrastructure. For this construction work has been on rise, which have led to the demand of construction equipment. Construction equipments are of various types and serve different purposes.

Heavy construction equipment include bulldozers & track loaders, rubber tire loaders, cable cranes, hydraulic cranes, stationary cranes, graders scrapers & rollers, paving equipment, rock crushers, screeners & washers, trenching equipment, etc. There has been technical advancement also in the attachments and part required for the construction equipment. Three are various types of buckets, blades, couplers cutters, forks, grips, hammers and shovels.

There has been a growth in companies opting for rental construction equipment or leasing them. The main reason behind this is lower capital investment and lower maintenance. Moreover, good construction equipment is available at great bargain prices. This construction equipment give good productivity paralleled to new equipment. Also the smaller fleet ar able to squeeze out construction equipment.

Apart from purchase, leasing and rental of the construction equipment, there are also security issues attached to them. These days companies and constructors are much worried about securing their construction equipment. Since construction equipment do not have any tracking number on them thus recovery of any stolen construction equipment is very difficult. Most of the time the construction equipment is recovered several kilometers away from the construction site. But recovery of equipment is very difficult. Thus a new system of putting the tracking number has been put into effect. Earlier, for security purposes companies used to tie up the construction equipment with chains and padlocks but of late these have been proved to be inefficient.

Now-a-days construction companies are asking the manufacturers to instill laser-cut identification labels with key identification numbers. These key numbers would prove to be the tracking number just like engine number and chassis numbers in automobiles. A proposition of seventeen-digit global numbering system has been put forward in the construction industry to prevent stealing of construction equipment. This would ensure recapturing of stolen construction as well prevention of shipment of stolen construction equipment to other neighboring countries.

Advancement in the construction industry has led to development of operator comfort--air-conditioned cabs, steering wheels that can be tilted and devices to prevent noise pollution. Producers are featuring global positioning satellite technology for improved surveying and for use in driver-less trucks operating on a fixed route.

Increase or decrease in the construction sector directly affects the sale or purchase of the construction equipment. If the economy of the country is growing at a healthy pace, it leads to development of new projects as well as upgrading the older ones. All this requires construction equipment either to be purchased or leased by the construction companies. Further, an association for the inspection and certification of used construction equipment has been formed. This has been done to promote online sales of used heavy construction equipment. This is required by the companies taking up projects at various locations in the foreign land.

Chris Warren, Used Concrete Equipment engineer - focusing on Construction Equipment Sales and Construction Equipment Sale

Save Money by Renting Construction Equipment for Your Renovation Project!

If it is time to renovate your home, consider becoming your own contractor and save yourself hundreds or thousands of dollars! If you are capable of completing the work yourself, bypass the costly contractors and finish the project on your own and under budget. For a larger project, hire individuals directly to work on each specific part of the renovation. Hiring sub contractors directly will still save you a great deal of money and allow you to better apply your budget to quality materials.

One major problem individuals have when beginning their renovation project is their lack of construction equipment in their stable. Renting this equipment is an excellent choice for anyone who needs the items on a limited basis and does not have the funding to purchase the often costly equipment for themselves.

Construction equipment can be rented at a variety of places. Look in your local yellow pages to find a specialized construction equipment rental business in your area. These businesses are usually prevalent and are capable of renting everything under the sun, from small tools to tractors or caterpillars. You may need to call or visit different rental companies to find out their rules, costs, and the equipment available before you make your choice.

In order to limit hassle and aggravation, choose a company that has all requested tools and equipment instead of renting from a variety of shops around town. Usually, shops will strive to work with you regarding renting equipment for a large job, often providing bulk pricing and long term renting contracts.

For smaller jobs, consider visiting your local home supply store. These ever popular equipment laden depots regularly rent a variety of tools and other construction equipment on a daily basis. Stores such as Lowes and Home Depot regularly rent a host of power tools and even vehicles for hauling materials, but may have a more limited selection than a firm that specializes in renting construction equipment. Furthermore, these stores generally have a shorter rental time, making them perfect for smaller projects, but inappropriate for larger endeavors.

Before you agree to rent everything, be sure you fully understand the rental contract. You do not want to be penalized at the end of the day and forced to pay expensive fees because you did not completely understand the rental conditions before you signed on the dotted light. Ask for a deal in either the price or longevity of the contract. Often if you are renting a great deal of equipment from a specific store, they will work with you on either of these items.

Also, speak with your subcontractors and be absolutely aware of their timeline. No one wants to rent construction equipment before it is actually needed and having the tools sit unused for a period of time. This can be a costly mistake and should be avoided at all costs.

Renting construction equipment is an excellent way to have the tools you need on hand for your home renovation project. Do not purchase expensive and bulky tools that you may never use again! Find a reliable rental agency and rent the right equipment to get the job done.

For more information on Construction Equipment, visit http://www.constructionheavyequipment.info.

Types of Construction Equipment and Their Uses

Construction equipment range from the very heavy equipment to the portable and mobile lighter equipment, some of them with a precise description of their functions are detailed below.

Engineering equipment with a front bucket/shovel and a small backhoe in the rear combined with a tractor is known as backhoe loader. It is mostly used in small construction sites and in urban engineering such as fixing city roads.

A crawler, which is very powerful and attached with a blade, is called a bulldozer. Even though any heavy engineering vehicle is known as bulldozer, it is actually a tractor with a dozer blade.

Combat engineering vehicles are used for engineering work in the battlefield and for transporting sappers. They are mostly armoured vehicles.

A compact excavator is a wheeled or tracked vehicle with a backfill blade and swing boom. It is also known as mini excavator. The functions and movements of the machines are carried out by transferring hydraulic fluid. This makes a compact hydraulic excavator different from other construction equipment. Find more info at www.construction-equipment4u.info

To compact gravel, dirt, asphalt and concrete in construction work and road laying a road roller which is also known as roller-compactor would be used.

A motorized cultivator with a rotating blade to work in the soil is known as rotary tiller. They are either drawn behind a tractor or self-propelled.

A crane is a derrick or tower equipped with pulleys and cables for lowering and lifting materials. The cranes used in construction industry are mostly temporary structures.

Dragline excavation systems are heavy equipment mostly used in surface mining and civil engineering. The smaller type of dragline excavator is used for port and road construction. The larger type dragline excavator is used in strip-mining operations for coal extraction.

In the building industry, to make foundations, a drilling machine is used. It is also used in oil wells and water wells.

An excavator commonly known as a digger is an engineering vehicle, with a cab mounted on a rotating platform or pivot, and a backhoe on top of an undercarriage with wheels or tracks. In untamed regions which are being reclaimed for construction, a feller buncher, a machine having an attachment, which fells trees, is used.

A forklift, lift truck or forklift truck is an industrial truck used to pick up and transport heavy material using steel forks under the material to be lifted. The most common usage of a forklift is to move materials stored on pallets.

A loader also known as a bucket loader, front-end loader, scoop loader, shovel, or front loader is a type of tractor using buckets, which can be tilted to lift and move material. A paver is used to spread asphalt on roadways.

Lucy Bartlett is a proud contributing author. For more info visit Construction Equipment or Construction Equipment Sales