Buying an excavator with resale in mind

[MarkFromWA]

I have so many projects in mind for the next 3-ish years (landscaping, retaining walls/terracing gardens, digging up boulders in the fields, root cellar, trenching for utilities for a few projects, etc) so I'm looking into buying an excavator. The rental options near me are very limited, and I have a long trailer-unfriendly driveway, so just getting an excavator here and back would take up a rental day (plus, the few rentals within an hour drive are 3-ton). Contractors are usually scheduled pretty far out too, and I don't want to wait around to get stuff backfilled so I can move on to the next project. I'm pretty well set on something between 5 and 8 tons. My biggest concern is usability in my rocky soil, so I ran it by a contractor who's had 304, 308 and 312 machines out at my place for various jobs. He thinks even a 4-ton would be fine for most of it, but moving some of the heavier boulders wouldn't be possible on the small end. I'm certainly not going smaller than 4-ton.

I've spent quite a bit of time perusing machinery trader and FB marketplace. Lots of options out there:

• $35-45k for 3500-5000 hour name-brand (Cat/Deere/Kubota/etc) machines usually from the kinda-shady used equipment dealers/lots. I always gotta wonder about the history of these sorts of things. I get especially nervous when they're also selling gray-market machines (and not listed as gray-market, but it's a model number that was never sold in the US). As an example, $35k for a 5000-hour 2006 Kubota KX161-3 that's clearly had a hard life, and despite a new engine needs attention elsewhere.
• $45-55k for nicer off-brand machines that are going to be harder to get service, especially where I live. For example, $45k for a 5000-hour 2014 Hyundai Robex 80cr-9 that looks to be well-maintained (two owner), has a new-ish track, etc.
• $55k+ for low-hour name-brand machines. For example, $65k for a nice-looking 500-hour 2019 Cat 305E2 CR with a few buckets.

I don't want to keep the excavator forever (more precisely, my wife doesn't want me to keep it forever), and I expect I might put a couple hundred hours on it in a few years. Resale after that time is top-of-mind. I'm willing to spend the money to get a nice machine, and the conventional wisdom is that a name-brand excavator holds value well, but then I'm worried about finding a buyer who can purchase it without financing or perhaps taking a bath on resale if the economy tanks. And the more I spend, the more exposed to the possibility that I way overpay due to my lack of knowledge about excavators. I'm also not opposed to getting an older machine that's a bit sloppier around the corners and harder to work with, but still digs holes faster than a shovel, but then I'm worried about all the issues with high-hour machines. Any nuggets of wisdom? My gut instinct is to get a beater and embrace the adventure. Should I get over my fear of investing in a newer machine? I know so little about excavators (how difficult major repairs are, how often they need major repairs) that I'm having trouble evaluating the value proposition.

And I recognize there's a non-zero probability that I'll fall in love and never sell it.

 

[Tomtint]

I bought a 1 owner 7k hour KX121 for something like 17k a number of years ago..did basic maintenance and put another 400 hrs on it over the years.. sold it a couple years ago for 23500.00

 

[Carl_NH]

I would be looking for a 2000-2500 hr machine 8-10 years old like the Takeuchi 260, Bobcat e50, JD 35 or 50G, Cat 303.5 or 304/305 size. Out this way, the 4-5 ton units sell for $35-45K with 2-3K hours. Usually the original owner has depreciated at 8 years, and with 2K hours you can expect minor repairs but not major issues or need to replace costly stuff.

The older machines - 15+ yrs and higher hours, things like hoses, tracks, wheel motors, etc. are going to fail eventually so if you do go for an older machine expect to have some downtime eventually.

I would look for one with maintenance records, dates on filters and such, with decent tracks, drive sprockets good and relatively tight pins and not much slop in the boom and bucket. If you stay in the 10K Lb class these are easier to transport, and ultimately resale if or when you decide to sell. As TomTint pointed out you won't lose money on these, its a matter of finding the right one.

Good luck in your quest!

 

[Hay Dude]

I just bought a Wacker Neuson 9 ton machine with 2700 hours for 28K. I wanted a Tak, Kubota, etc., but after 6 months of looking, I couldn’t find one that suited me. Steadily building up a fall/winter work load for it after farming slows down.
Can’t wait to get going with it and make some money.

 

[MattB4]

Might want to explore leasing. Sure some folks will have great stories of how they bought a used machine, worked it hard with no equipment breakage costs, than turned around and sold it for as much as they bought it for but those are the lottery winners.

More typical is, unless you are very careful, you buy someone else's problem when you buy used. When you go to sell no one will buy unless it is a really great deal. The; "If I am selling it is the greatest thing ever, you should pay me top dollar and when I am buying it is trash that you should pay for me to take it from you", comes into play.

 

[paulsharvey]

Municipal auctions. Cat/Deere/Kubota/Case/Takeuchi/Bobcat/Wacker/Sany/Kebelco/Komatsu/Veermer/Volvo all should have parts availability. If you're really going to resell; i would look for around 1500 hours, and decent tracks/undercarriage. Don't expect AC/closed cab on 35 class machines. Anything that used a hydralic hammer; Run.

 

[paulsharvey]

Might want to explore leasing. Sure some folks will have great stories of how they bought a used machine, worked it hard with no equipment breakage costs, than turned around and sold it for as much as they bought it for but those are the lottery winners.

More typical is, unless you are very careful, you buy someone else's problem when you buy used. When you go to sell no one will buy unless it is a really great deal. The; "If I am selling it is the greatest thing ever, you should pay me top dollar and when I am buying it is trash that you should pay for me to take it from you", comes into play.

Cat and Deere, and maybe others, have at times offered some very creative lease to purchase programs. Such as, you make a slightly inflated payment for 3-5 years; lease, with the option to purchase at basically scrap value at the end of lease;

 

[Topzide]

Check out purplewave.com.

 

[paulsharvey]

Well, let's back up just a bit. What machine will do what you need, and what limitations are there? Do you need it to bit X deep, or lift Y ammount, or do you need it to fit in an area that's only xx feet wide? Is a JD35 the size class that best fits you, or can you use something like a PC85 Komatsu? Would a JD120 be too big? Is a track hoe even the right tool? Will you ever need to transport it once it's dropped off? Do you have a tow company around that does contract low-boy moves?

Heck, are steel tracks a good or bad thing for you?

Point being; sometimes something like a JD-120 with like 5000 hours can be cheaper than a JD-50 with 1500 hours. They are very different tools, though.

There are only a few things that a small-medium machine can't do with more time; that also larger machine can do; over come gravity (lift weight), and deal with wet holes. So, ground water, rocks, fat gumbo clays, ect; as well as trees/stumps; really change the whole nature of the question.

 

[Tomtint]

I'll add to my last post.. after selling the KX121 and not having a minix for about 2 years, I bought .. actually leased a bobcat E35 with a long stick.. it's not near as strong as the KX was but for my needs it's fine. 4 year lease and by that time I bet I won't have 500 hrs on it so it should still have decent value. .. I'm 2 years in the lease now and have less than 100 hrs.

 

[M59]

I have so many projects in mind for the next 3-ish years (landscaping, retaining walls/terracing gardens, digging up boulders in the fields, root cellar, trenching for utilities for a few projects, etc) so I'm looking into buying an excavator.

I've spent quite a bit of time perusing machinery trader and FB marketplace. Lots of options out there:

• $35-45k for 3500-5000 hour name-brand (Cat/Deere/Kubota/etc) machines usually from the kinda-shady used equipment dealers/lots. I always gotta wonder about the history of these sorts of things. I get especially nervous when they're also selling gray-market machines (and not listed as gray-market, but it's a model number that was never sold in the US). As an example, $35k for a 5000-hour 2006 Kubota KX161-3 that's clearly had a hard life, and despite a new engine needs attention elsewhere.
• $45-55k for nicer off-brand machines that are going to be harder to get service, especially where I live. For example, $45k for a 5000-hour 2014 Hyundai Robex 80cr-9 that looks to be well-maintained (two owner), has a new-ish track, etc.
• $55k+ for low-hour name-brand machines. For example, $65k for a nice-looking 500-hour 2019 Cat 305E2 CR with a few buckets.

Based on machine never staying in your possession due to partners position, I'd being looking at negotiating a long term rental
or 3 year lease of 8-20K lb machine and compare that to buying used. Benefits of never owning are: You don't have to worry about resale. You don't have to worry about maintenance. You don't have an up front sunk cost of paying for a machine unless you carry a loan to buy the used equipment and then finding bank willing to finance used equipment is tricky.

I suggest you rent a machine and gain some experience so you can make better buying, rental, or lease decision.

You may learn your first choice for machine was insufficient for the job and you just return the rental and move elsewhere.

ps. If machine never leaving your property and not used on paved surfaces, as mine is, go with steel tracks as they are more tolerant of abuse and last much longer.

 

[MarkFromWA]

Thanks for all the good advice, everyone.

CarlNH, it seems like 2k hours is hard to find. It seems to be 80% 3500+ hours and 20% 500- hours, with not much in between. I'll keep my eyes peeled.

paulsharvey, Tpozide, I'm pretty far out there. It's 4-5 hours to the nearest place an auction might be, and I'd be hesitant to invest that kind of time not knowing if I'd even go home with something.

paulsharvey, I need something with a hoe. A backhoe would be less ergonomic, but I'm sure I could make it work. Our soil is too rocky for tractor-mounted backhoes. I've looked at full-size backhoes, and they don't seem to carry their value as well, but I really want a thumb for moving boulders, logs and such, and most backhoes don't have a thumb (and quite a few are the extend-a-hoe type that can't easily take a thumb). I don't want anything larger than 8 tons because then it really starts to get tight in terms of working area around the house (in particular the main front yard between the driveway turnaround and the front door is in the neighborhood of 40x40 feet, and I want to do a lot of landscaping there). I'd also be sacrificing a lot on price and/or condition to buy such a large machine. I don't think there's a perfect size. A larger machine means I'll get to play with bigger boulders. And during a big excavation project last year my contractor was going deep and reaching the limits of a 312 and though he might need to bring in a hammer (which he's done before for other projects). If I get unlucky with a smaller machine, I might need to spend a lot of time on a particular rock, or make adjustments to the game plan based on the rock, or hire a contractor with the right equipment. Or maybe I get lucky. On the list of projects is a couple tree stumps (biggest was a 24" dbh ponderosa) and removing a defunct underground 1000 gallon diesel tank.

Steel tracks would be fine, great even, but there aren't many of those for sale.

 

[paulsharvey]

Thanks for all the good advice, everyone.

CarlNH, it seems like 2k hours is hard to find. It seems to be 80% 3500+ hours and 20% 500- hours, with not much in between. I'll keep my eyes peeled.

paulsharvey, Tpozide, I'm pretty far out there. It's 4-5 hours to the nearest place an auction might be, and I'd be hesitant to invest that kind of time not knowing if I'd even go home with something.

paulsharvey, I need something with a hoe. A backhoe would be less ergonomic, but I'm sure I could make it work. Our soil is too rocky for tractor-mounted backhoes. I've looked at full-size backhoes, and they don't seem to carry their value as well, but I really want a thumb for moving boulders, logs and such, and most backhoes don't have a thumb (and quite a few are the extend-a-hoe type that can't easily take a thumb). I don't want anything larger than 8 tons because then it really starts to get tight in terms of working area around the house (in particular the main front yard between the driveway turnaround and the front door is in the neighborhood of 40x40 feet, and I want to do a lot of landscaping there). I'd also be sacrificing a lot on price and/or condition to buy such a large machine. I don't think there's a perfect size. A larger machine means I'll get to play with bigger boulders. And during a big excavation project last year my contractor was going deep and reaching the limits of a 312 and though he might need to bring in a hammer (which he's done before for other projects). If I get unlucky with a smaller machine, I might need to spend a lot of time on a particular rock, or make adjustments to the game plan based on the rock, or hire a contractor with the right equipment. Or maybe I get lucky. On the list of projects is a couple tree stumps (biggest was a 24" dbh ponderosa) and removing a defunct underground 1000 gallon diesel tank.

Steel tracks would be fine, great even, but there aren't many of those for sale.

Ok, it does sound like your on the right track. One brand that might be worth researching, that i had never heard of until recently; Grizzly. Apparently they are manufactured by Hyundai, so its a made by a big brand, but pretty cheap, as far as machines go.

Correction, Doosan, not Hyundai

Mind you, I'm not actually recommending it, just something that might be worth looking into.

 

[Carl_NH]

Here's a couple of machines in WA that look close to your specs

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[paulsharvey]

So, some food for thought... If you see yourself using this machine something like 500 hours total; some of the 3 ton, diesel, import hoes are in the $20-25k range; and should so everything you need. It likely would resell for atleast $10k, after 3-5 years, assuming you dont actually destroy it. If you see yourself running up towards 1500 hours; I would probably go name brand.

So, there does seem to be a pretty big jump in price from the 2/2.5/3/3.5T to the 5-8T class imports.

 

[JohnTexas]

I had a similar rationale and situation where I needed to purchased a 100hp skid steer (not excavator) and was also concerned about machines sold by general equipment resellers and their history. I wound up purchasing a Caterpillar unit from the used equipment department of the large regional dealer. Mostly ex-rentals but were maintained by Caterpillar and it came with a warranty for a reasonable period. Note a lot of their equipment is under long term rentals rather than numerous short term jobs. I kept a couple of years and later sold it through Iron Planet which is part of Richie Borthers. Iron Planet is a viable avenue to sell used equipment as it gives you a national market exposure and they offer financing for buyers and shipping options. The process was professional and their agent came and took a lot of pictures and did some basic tests and operations which is all put in the sales documentation for prospective buyers. While it can be a bit costly it beats using FB Marketplace in my opinion as too many time wasters when you have a costly item which in my case was also located on a property away from where I reside. Just offering some food for thought from my experience in acquiring and subsequently disposing of equipment.

I share your view of buying to use at your own pace and then selling versus renting or leasing when you do not have a full time need or plan to work on projects off and on over a longer period. Although equipment ages the value is mostly driven by useage hours so sitting idle for longer periods between jobs does not tend to harm your investment.

 

[kenhar]

Unless you are just sold on a small track hoe, I would seriously consider a small track loader. With a 4 in 1 bucket it will do anything a track hoe will do and more. The only thing it won't do is dig a narrow ditch because the bucket will be wider than one on a small track hoe. Try to level ground after you have dug up your boulders and trees with a track hoe, no matter the size. Comparable size machines, the loader will should cost less.

 

[4570Man]

Unless you are just sold on a small track hoe, I would seriously consider a small track loader. With a 4 in 1 bucket it will do anything a track hoe will do and more. The only thing it won't do is dig a narrow ditch because the bucket will be wider than one on a small track hoe. Try to level ground after you have dug up your boulders and trees with a track hoe, no matter the size. Comparable size machines, the loader will should cost less.

You’re wrong on both accounts. The mini x does tons of work the skid steer can’t do and the mini x retail price was cheaper.

 

[kenhar]

I didn't say skid steer, I said track loader. Cat 963, Dresser 125, John Deere 650. These are not skid steers. These machines have steel tracks and are excavation machines. They're small, 18 to 24 thousand pounds but with the right operator will bury comparable size track hoes.

 

[sreeb]

Once you have owned an excavator, you would sooner part with your wife than the excavator.