Taking Advantage of Equipment Trades

Upgrading your equipment is an essential component of a successful business, and equipment trades are one of the best ways of doing just that.

However, there are some who fear equipment trades don’t provide the same value for their equipment as selling does. We’re here to say that’s just not true. In this article we will break down the benefits of equipment trades and how they can put your business on the fast track to exciting places.

What You Get From Equipment Trades

Simplicity: 

Selling your equipment outright can be a big hassle. You’ll have to post ads, respond to countless calls and emails, and take precious time out of your day to meet with prospective buyers only to be told, “Thanks, but no thanks.” With an equipment trade, almost all the work is done by your trade-in partner. They’ll come to you, thoroughly inspect your equipment, take pictures, do the research, and come to you with a price.

Speed:

Selling your equipment can be a long, arduous task that can leave your machine unused and digging into your bottom line for months or even years. By comparison, trading in your equipment with the help of a trusted and experienced partner can take a matter of days. This also considerably reduces the transition time by allowing you to liquidate and acquire new equipment simultaneously, optimizing your time and maximizing your profits.

Extended Warranties:

Equipment trade-ins can also be a strategic way of extending machine warranties. Most equipment comes with a limited five-year or 5000-hour warranty, after which you’re on the hook for any repairs and replacements. Unfortunately, there’s no way to extend these warranties except through a trade-in. Since you’re getting a new machine in an equipment trade, you essentially restart that five-year/5000-hour warranty before the old one expires. While this may seem like a hefty price tag for a warranty, it is a savvy business move. First, you reap the rewards of a fully protected machine enhanced with the latest tech and attachments. Second, it insulates your bottom line. If, for example, you lose a hydraulic pump on an excavator without a warranty, that could easily cost $40,000 to repair—on top of all the money you’re losing in downtime.

Cost-Effective Machine Acquisition:

Another way equipment trades can benefit your business is by saving you on capital gains tax. If you sell your equipment for $100,000, you’ll have to pay capital gains on the total amount, which could be as high as 15%, depending on where you live. However, if you trade in your equipment for $50,000, you won’t have to pay any capital gains since the profits are absorbed into the price of a new machine.

Trading in equipment is also a great way of saving yourself come tax time if you discover you’re taking in more than you’re spending. Purchasing a new piece of equipment can help you avoid additional fees, and machine trades allow you to do that while still saving money. After five or six years, most equipment has fully depreciated anyway and can no longer be written off. So, not only can you use equipment trades to work the system and save money, but you can also offload old equipment before they become money pits.

Staying Ahead of the Curve:

Every successful business wants to be on the cutting edge, and equipment trades are a quick and easy way to stay ahead of the curve and ensure that the future doesn’t leave you behind. You gain unfiltered access to the latest performance-enhancing technology like intelligent automation and performance tracking, which eliminates guesswork; innovative upgrades like tiltrotators, which increase machine versatility; and smarter, more fuel-efficient engines, which reduce costs.

But that’s not all. Environmental and safety standards are also constantly changing and having machines that don’t meet these requirements makes you vulnerable to hefty fines and disastrous shutdown orders. Since new equipment is built to meet new standards, equipment trades are a cost-effective way to ensure you meet all legal and environmental requirements. Plus, staying ahead of the curve makes you and your business look good. It presents you as someone with their finger on the pulse of their industry and a trustworthy partner who takes their job and their client’s time and money seriously.

 

How To Get The Most For Your Equipment Trade:

Appearance:

Would you buy a used car that looks like it’s about to fall apart? Even if you were told that the engine is great and the frame is strong? Now you know what a dealer thinks when they see a worn-out piece of equipment. Keeping up your machine’s appearance is one of the quickest and easiest ways to increase your equipment value and get the most from your equipment trade. It doesn’t have to be extensive, either. Conducting regular cleanings and inspections, replacing worn-out parts, proper winterization, and taking a few other routine maintenance steps are all it takes. First impressions matter, and a machine that looks well-maintained is an excellent sign that we’re dealing with someone who takes good care of their equipment.

Keeping Detailed Equipment Records:

Another way to increase your equipment value and get the most out of your equipment trade is to keep comprehensive records. These should include the date the machine was purchased, detailed inspection schedules, maintenance and repair logs, diagnostics, and, if available, telematic data. The unknown may cause some dealers to be conservative with their construction equipment valuation. Detailed records provide irrefutable proof that your machine has been well taken care of, is up to date, and doesn’t hide any potential issues. Full transparency is also the fastest way to build confidence and trust, which can make or break an equipment trade. It’s important to note that equipment records are not essential or considered a replacement for an on-site inspection. But it can cut through the humming and hawing and ensure you’re not getting the short end of your equipment trade.

Knowing When Is The Right Time to Trade:

There’s a sweet spot in every machine’s life when it’s been well-used but still retains a large part of its original value. This is the spot you want to be in to get the best deal for your equipment trade. While the life of every machine is unique, there are a few ways to determine when your equipment value is about to peak.

• 4,000-8,000 Hours: This is considered the operational sweet spot for used equipment. After this, wear and tear starts leaving a serious mark, and the money you invest in repairs and maintenance will begin to outweigh what you’ll get back.
• 50% Left in Your Tires: This is the tipping point for most buyers, as anything less means the tires will need to be replaced. New tires are expensive, and if you’re trading in a piece of equipment that needs new ones, you could end up knocking up to $25,000 off your offer.
• 50% Left in Your Undercarriage: Like tires, buyers aren’t going to spend a lot of money on an undercarriage that needs a lot of work. You may have a machine with less than 3000 hours on it, but if the undercarriage has less than 50% of its life, it won’t matter. Undercarriages also deteriorate quickly, so if you’re planning on an equipment trade, you’ll want to do so before investing a lot of capital in repairs and replacements.

Why Trade In With Chadwick-BaRoss

Consolidated Equipment Care:

At Chadwick-BaRoss, we strive to be not just your equipment provider, but your partner. From comprehensive preventive maintenance and repairs to fleet management and optimization, we can provide you with everything you need to be unstoppable. Having that kind of partner can be a huge advantage when it comes time to trade equipment.

So, if your machine was purchased from Chadwick-BaRoss, we have all of the required information, including what it’s been used for, how often it’s been serviced, and if any repairs have been done. With that knowledge and the fact that all repairs were done to the highest standard by us, it allows for a streamlined trade and a better chance at a good price.

And if you don’t already have a machine from Chadwick-BaRoss, consider making your next purchase from us. This way we can help you with your machine from purchase through all the services to an eventual trade-in.

Better Financing Options:

Unlike a bank, we can provide you with options directly from the manufacturer when you trade in equipment with us. These options are often geared toward business owners in our industries and are designed to meet their unique needs and demands. Having a direct line to the manufacturer also grants us access to low-rate options you’ll never find at a bank. You may find yourself paying up to 7% a month there, but at Chadwick-BaRoss, we can get you the best deals, like , depending on the brand, machine, and time of year.

You also don’t have to jump through all those annoying and time-consuming hoops. If you’ve purchased with us in the past, we simply re-enter your information and send it off. If not, that’s no problem either. All we need to do is conduct a credit check, and you’ll be ready to roll.

A Partner You Can Trust To Give You Peace of Mind:

Equipment trades can be a stressful process. You’re constantly afraid you’re getting taken advantage of or that there’s a better deal out there somewhere. Finding a trade-in partner you trust and have a history with alleviates all these fears. A trade-in partner who’s willing to go the extra mile for your business. A trade-in partner you know you can rely on to transform your equipment into innovative business solutions. A partner like Chadwick-BaRoss.

From valuation and machine trades to financing, we can help you optimize your fleet, maximize your profits, and stay on the cutting edge of your industry. Contact us today for all your equipment trade needs.