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Getting the most out of the used equipment market

Getting the most out of the used equipment market

We asked industry expert Tim Slattery, Director of Slattery Asset Advisory, how businesses can maximise returns when it’s time to sell and upgrade equipment.

What is currently driving equipment sales?

Mid-sized yellow goods, machines and equipment that can be used in construction are highly valued. Government projects, particularly in NSW, are driving heavy demand for mid-sized machinery. The bulk of buyers in Perth are from NSW and are shipping equipment back.

What are the potential drivers for truck sales in the future?

Transportation of freight will continue to grow over the next decade driving sales, as technologies change and trucks become safer and more efficient.

The average age of trucks in Australia is higher than in Europe and the USA1 and in the future the Government could consider introducing requirements that seek to reduce pollution output. This could increase demand for newer trucks.

What specific assets re-market well?

Mid-sized equipment, flat-bed trucks and tautliners (used for road freight) are achieving good values and clearance rates. Top-tier branded, mid-sized yellow goods with good service histories are also selling well in areas with strong construction, such as NSW and QLD.

And not so well?

Bulk haulage equipment such as side tippers, large dump trucks, bulldozers and wheel loaders for the resource sector are fetching lower market values than 12-18 months ago. An increasing amount of equipment is being re-marketed due to insolvency and lack of growth.

What’s your view on emerging technologies like hybrids and electric?

Technology evolves at a high rate and by the time new equipment hits the secondary market, it’s no longer the latest technology, making it hard to form a view on future values of hybrid models. If hybrid models are built correctly and save measurably on operating costs they may be worth considering.

And recent brand entrants from China and India?

Many newer brands from India or China sell on an up-front price point, but we aren’t seeing the same quality, and we don’t see a demand for them in the secondary market.1

Five considerations to effectively re-market equipment.

1. The quality of the equipment will determine future resale value and market demand.

2. Well serviced equipment with full records resell quickly, for a higher price.

3. Know your target market – you may need to re-locate your equipment to achieve top value.

4. If finance agreements allow, offload equipment when the secondary market is strong.

5. Get a valuation and assistance from a reputable re-marketing agent.

View the Equip Winter issue here.

For more information or to get a quote for equipment finance visit here

1Truck Industry Council Fleet Report 2015 All other views expressed in this article are sourced from Slattery Asset Advisory 2nd Quarter Report for FY15/16. Things you should know: As this information has been prepared without considering your objectives, financial situation or needs, you should, before acting on the advice, consider its appropriateness to your circumstances