Auctions have long been an integral part of the construction equipment industry for good reason. By purchasing construction equipment auctions rather than through a dealership, buyers gain insight that a dealer would miss, such as service and maintenance records.
Contractors can arrange financing ahead of time, which helps manage cash flow when equipment purchases need to happen quickly. Equipment World spoke with Raffi Aharonian of Rouse Appraisals about these helpful strategies.
Online-Based Live Auctions
As the pandemic has increased people’s desire and need for quality equipment online, it has pushed auction markets from being one of “buyer beware” mentality to offering transparency, efficiency and more positive outcomes for buyers and sellers alike. Trusted sellers have emerged; detailed machine information has become more easily accessible; safe payment systems have developed; buying resolution processes established.
Buyers can search online auction events ahead of live or timed auction events in order to view equipment that will be on offer and then participate in live bidding during its time period – saving themselves the transportation costs associated with transporting their equipment directly to an auction site.
Heavy equipment dealers are increasingly turning to online auction websites as an efficient and cost-cutting way of offering their inventory for sale, providing greater exposure. Furthermore, these auction sites can reduce transportation costs associated with traditional on-site auctions.
In-Person Live Auctions
Live auctions provide you with the opportunity to inspect, test and compare equipment in person. Most heavy equipment auction houses provide both on-site and online bidding; many also feature auction calendars and email alerts for their sale events.
Larger auctions often utilize multiple ‘rings’ (e.g., inside the main auction theater and outdoors). Each ring hosts its own group of lots introduced by an auctioneer who calls for bids before raising or lowering asking prices depending on demand. Electronic signboards will often display the lot number and ask price.
As soon as you win an auction piece of equipment, payment of its final bid amount must be submitted immediately in order to take ownership of it. Payment can be made with cash, wire transfer, credit card or an approved lender financing arrangement. After payment has been received by an auction company they typically arrange transport of it.
Equipment buyers rely on auctions as an essential means of expanding or supplementing their fleet, with domestic and international auction houses providing exceptional deals on late-model construction, agricultural, and heavy equipment.
Auction buyers have various financing options available to them at auctions, from purchasing equipment with an unsecured business loan to leasing equipment with the option to buy at the end of its lease term or even obtaining an equipment finance loan.
To take advantage of financing options like these, businesses need to determine how much capital they have available and present this amount along with a business plan illustrating the intended uses for the equipment purchased to a reputable equipment finance company, along with any necessary business plans detailing intended uses for it. A lender will quickly approve or decline financing requests on the spot; for lease agreements this process usually happens within two business days while purchasing equipment at auctions can save construction teams money by bypassing lengthy lead times required to acquire new machinery.
Many equipment buyers believe it is best to purchase new, but auctions provide smart equipment buyers with an opportunity to acquire tools without spending exorbitant sums of money. Contractors know that used equipment can still provide productive results while saving themselves significant capital by investing in previously-used machines.
Buyers can save valuable time when they shop auction, since machinery is readily available for immediate purchase. As opposed to new equipment that requires a lengthy lead-time and rapidly depreciates upon taking ownership, auctioned pieces often retain value for a longer period.
Due to their size and weight, shipping tractors, cranes, forklifts and other heavy equipment requires special considerations. Employing a transporter experienced in importing foreign equipment into a country can greatly lower freight costs while offering peace of mind. With uShip’s free quotes from pre-qualified truckers to quickly compare options and book freight quickly online or with our estimate tool on item details pages quickly booking freight can become easier than ever!