Looking into purchasing used equipment and machinery?
There is a wide range of choices of heavy equipment and trucks being sold, and there are a lot of economic benefits you can expect to get from buying used. Despite these benefits, there are many business owners continue to shy away from choosing this option, enabling them and many other businesses a lot of money.
They usually assume that the risks outweigh the reward. But by putting in a little effort into the process, you will be able to avoid most of the pitfalls of buying.
Below are the five ways you can minimize the risks that tend to be associated with buying used equipment and trucks through live actions, via online auction marketplaces, through a dealer, or even privately.
1. Choose a reputable seller to buy from
Take some time to go through online reviews, business reports, and testimonials to get a rough idea of whether the seller you want to buy from is reputable and legitimate.
Here are some of the things to check;
Public company records
Choose a company that is well-established and has a large customer base and long history. Companies that are publicly-traded are required by law to publish their financial statements, making it easier for you to find out whether a given is stable and likely to be around for long or not.
Facebook and Google can be the perfect places to start because they have unbiased customer reviews. The good thing about Facebook and Google reviews is that they cannot be removed or edited by the page owner once they have been posted.
Testimonials come in handy because it shows that previous buyers are willing to endorse the seller. If there aren’t any on the website of the company, call them up and ask them whether they can provide you with information and contracts of some of their recent clients.
Better Business Bureau
Go to the website of Better Business Bureau in your area (bbb.org for both US and Canada) and search for the seller that you are currently considering to buy the equipment from. The Better Business Bureau has a list of business along with their contact information and any consumer complaints that have been reported.
If you need more help here is an Industrial auctioneer guide.
2. Carry Out a Background Check
Before you can purchase used equipment or truck, you should make sure that the seller is the legal owner or has the legal authority to sell it on behalf of the owner. The two things you should be beware of are liens and stolen equipment.
When buying the equipment from the seller, ask them whether they own it; if they are not able to confirm, then you should do your check. When buying from a private seller, ask for the original invoice for that equipment and see if the name on the invoice matches with that of the seller.
You can also confirm the ownership of equipment using its serial number, or VIN number if it is a truck.
Go to the local police department so they can run it and check whether the item has been reported stolen. You can get it checked by an organization dealing with tracking of stolen equipment, but this will be done for a fee.
If you’re planning on financing your purchase, many of the financing companies will first do a thorough check on the history of that equipment, and this will involve checking if that machine has been reported as stolen.
3. Ensure there is a clear title on equipment
If you buy the equipment that doesn’t have a clear title or there is a lien applied (i.e., this is where the seller hasn’t paid back the money he borrowed to buy the equipment), you might be forced to forfeit the ownership of the machine to the lending institution.
4. Inspect the equipment before buying it
Many of the equipment is usually sold where-is, as-is. Inspect and test the equipment before buying if possible. If you don’t know the heavy stuff, consider getting an experienced operator or qualified mechanic so that they can do the functional and physical inspection on your behalf.
If buying online, visit a website that has detailed information and photos of the equipment. Carefully scrutinize the pictures and also don’t be afraid to ask any questions you might be having. You can ask the seller if they can send you photos of the equipment taken from different angles. It’d also behoove you to ask the seller to provide the service or maintenance records.
If you buy equipment you’ve inspected, then when collecting it, ensure that the description advertised matches the equipment or truck.
5. Leave a payment trail
When you’re buying from a private seller or online, you should ensure there is some recourse if you get the equipment and it is in a condition that is different from what was presented online, or if the machine does not arrive at all.
Go through the terms of the online transaction before buying, and choose sites that provide a secure escrow process.
For every purchase, you make, ask for an invoice, receipt, or any other document showing that you are the owner of that equipment. Try avoiding paying cash if you are buying from a private seller. Instead, do it using a certified check and ensure there is a paper trail that proves you paid.