Buying an excavator with resale in mind

[Fxfymn413]

You might check out Sunbelt or United to see how they dispose of their machines. I have a friend who has purchased a crane and a telehandler from Sunbelt at a reasonable price for machines that did not have a ton of hours and was well maintained.

 

[mikester]

True, but when you look at a week long rent, even 4 times per year, that's getting to pretty close to equal with a years payments on a purchase or long term lease.

On long term lease; often You are responsible for maintenance. Think leasing a car vs renting a car. You dont do tires/PM service or repairs on a rental, but a lease, you do.

around here I can rent a newish machine (with 100 hours on the clock not some worn out POS) for CDN$2200/wk or CDN$5500/mo for a 10 ton machine, CDN$2600/wk for a 16 tonne (works out to about $100/hr with fuel and I'm in the seat)

I can get a guy with a late model 35 tonne machine for CDN$250/hr including operator and fuel.

If I finance a new 8 Ton KX080-5 I'm looking at CDN$3K-4K per month for 60 months at 0% and I'm in the seat, on the hook for R&M. I'm spending CDN$1K every 200 hours to service my TLB, a mini-ex will cost even more. In my case I can rent for 2 weeks what I would spend in one month on finance with a 60 month obligation.

I've had good luck in the past buying old equipment and selling 3-5 years later for what I've paid. These days I'd rather operate a new machine and get the job done quickly and not have to worry about maintenance and breakdowns.

 

[paulsharvey]

around here I can rent a newish machine (with 100 hours on the clock not some worn out POS) for CDN$2200/wk or CDN$5500/mo for a 10 ton machine, CDN$2600/wk for a 16 tonne (works out to about $100/hr with fuel and I'm in the seat)

I can get a guy with a late model 35 tonne machine for CDN$250/hr including operator and fuel.

If I finance a new 8 Ton KX080-5 I'm looking at CDN$3K-4K per month for 60 months at 0% and I'm in the seat, on the hook for R&M. I'm spending CDN$1K every 200 hours to service my TLB, a mini-ex will cost even more. In my case I can rent for 2 weeks what I would spend in one month on finance with a 60 month obligation.

I've had good luck in the past buying old equipment and selling 3-5 years later for what I've paid. These days I'd rather operate a new machine and get the job done quickly and not have to worry about maintenance and breakdowns.

Depends completely on your rental market and need. Also, and this is kinda Key, if week you need a Cat-315, but 4 other weeks you need a Cat-305; and maybe next year something different; 100% Rent. If you consistently need a Cat-305, many times, or you need it available at all times; purchase.

Seems a brand new, JD-50G is $92,600; financed that's about $1750/month. A Sany SY50U is $72,000 or around $1350/month. if you are looking at $9,000 per year in renting the same/similar machine; and figure resale; purchase starts looking real good.

Again, look into creative lease to purchase programs. CAT in the equipment world, and Deere in AG, are really banks first, and equipment dealers 2nd. Honda in the ATV/SxS market is similar. They can get real creative. Doesn't Kubota include insurance as part of the fiancing package? Honda waves insurance if you fiance through Honda of Amercia. CAT used to do a 3 or 5 year lease with purchase option. Deere has things in big ag, with a price per month + a price per hour; for like a 3 or 5 year period.

 

[paulsharvey]

One thing that I have left out of the conversation; as many others do... OP, are you any good on a hoe? If you have never ran one, its very simple, and intuitive, But, a guy that has 10,000 hours on one, will get more done in 2 days then you will in 2 weeks. The flip side, many of the small owner operators aren't really very good either. They watch Dirtperfect too much, and get a business loan, and charge you to learn how to do the job.

Hiring out is not cheap, but depending on skill, time, finances, its not always a bad choice. Thing is, $40,000 worth of budget just doesn't go far in earth moving. I would expect a small contractor, who is pretty decent, maybe with a helper (or not), to be roughly $2000-2500/day.

On used equipment, fiancing can be hard/expensive; eating up the cost savings pretty fast. Banks dont like used equipment loans, and charge a premium for them. If it comes down to fiancing a 1200 hour CAT-305 for $50,000 @ 12%; vs a new Sany for $72,000 @ 5%; I'm pretty sure I'd go Sany (or Takekuchyi, or Case).

 

[Hay Dude]

One thing that I have left out of the conversation; as many others do... OP, are you any good on a hoe? If you have never ran one, its very simple, and intuitive, But, a guy that has 10,000 hours on one, will get more done in 2 days then you will in 2 weeks. The flip side, many of the small owner operators aren't really very good either. They watch Dirtperfect too much, and get a business loan, and charge you to learn how to do the job.

Hiring out is not cheap, but depending on skill, time, finances, its not always a bad choice. Thing is, $40,000 worth of budget just doesn't go far in earth moving. I would expect a small contractor, who is pretty decent, maybe with a helper (or not), to be roughly $2000-2500/day.

On used equipment, fiancing can be hard/expensive; eating up the cost savings pretty fast. Banks dont like used equipment loans, and charge a premium for them. If it comes down to fiancing a 1200 hour CAT-305 for $50,000 @ 12%; vs a new Sany for $72,000 @ 5%; I'm pretty sure I'd go Sany (or Takekuchyi, or Case).

That might be a little extreme.
I financed my used excavator at 7% (which is way too high, but interest rates remain high). Nobody needs to pay 12%, unless they have junky credit.
4 years ago it would have been 4%.

 

[paulsharvey]

That might be a little extreme.
I financed my used excavator at 7%. Nobody needs to pay 12%, unless they have junky credit.
4 years ago it would have been 4%.

On that specific topic; Farm Credit looks like used equipment loans can be as low as 6.75%. They do a ask for more info than some banks; such as a assets vs debts; not just a simple income and credit. Seems like going rate is about 9.99% of used equipment; but shop that as well.

Just saw a Case CX57C, 1300 hours, good condition, 2019, for $47,000. One the flip side; a new Kubota KX080-5, monthly, wac, $2425/month; no idea terms . Another approach is an older Samsung SE130; heavily "loved" but working, tracks missing some rubber pads, ect; $15k. I would expect to put around money into that Samsung to keep it running; and it's probably a work and just park when done kinda machine. Maybe a bit of a mid ground, Takekuchyi TB240 (4.5 ton, ish), open cab, 1020 hours, $38k

 

[Hay Dude]

Love the “ready for work”, “ready for the field”, or “drive it home” bullsheet they put in the ads.

 

[Ideehoan]

I’m very happy with my grey market hitachi ex100. 3500 hours. Bought for 26.5 K. Had worn bucket pin/bushings that I repaired for under 1K.

Owner was known by a friend and an experienced mechanic had recently gone through the machine.

Using it on 20 acres for land prep to build, removes 30” trunk trees easily. Will lift around 7K pounds. It’s my mistress now, not selling.

 

[Tomtint]

FB Marketplace near me in Mass has a nice looking KX33 with a cab and thumb.. About 3k hours and they are asking something like 27K... That's a decent buy around here.

 

[panamaguy]

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.

I know you set on a heavier machine but being the owner if a IHI NX15, a 4000 lb machine i could do everything you ask unless the boulders are the size of a car. Plus you could move it in a car trailer as i do pulling it behind a Montero. Thus you have the option to to do some small work for locals without hiring a equipment mover. It came with a 12 inch bucket, i made a 8 inch tooth bucket for water and power lines. Then made a 36 inch non tooth bucket for cutting swale ditches, back filling and also for leveling along with the front blade.. I personally think once you own one you will not sell it and if you do i believe the smaller machine would be a easier sell.. But best of luck on whatever machine you decide on