Buying wheel loaders, excavators and other construction machines at auction provides an opportunity to get the best value on quality equipment. This is the reason auctions, can attract huge crowds. Undoubtedly, there is some risk that comes with buying at auction. With my years of experience handling heavy equipment, especially used equipment, I’ve put together three tips that I think are essential when it comes to purchasing equipment at auction.
1. Do in-depth research of the equipment
After consulting Surplus Database speak with your auction rep or the auction yard to find out whether your mechanic can inspect the machine prior to the auction. And, of course, a fresh of paint can hide a lot beneath it. Although I won’t provide a comprehensive list here, these tips include hiring a mechanic to identify signs of wear – such as fluid leaks, rust and cracks – and signs of great maintenance – such as proper track tension.
Whenever possible, ensure to test the machine and focus on any strange noises or exhaust. In case you cannot get an early look at the equipment, ensure that you and your mechanic test it at the auction.
You should never overlook a piece of equipment because of its fresh coat of paint. Most consignors are undoubtedly proud of their machine and have thought to give it a good paint job to do away with the hassle before it actually moves on to its new life. Yet again, it is prudent to have your mechanic test the piece, and you shouldn’t ever judge a book by its cover.
Furthermore, get as much documentation as you can on the equipment, such as maintenance records and the number of hours. For those who are seeing the same service carried out a couple of times on a machine, that could be a sign of a chronic problem.
For those who want to bid on Volvo equipment, I recommend getting a Machine Tracking Information System (MARTIS) download on the machine from your auction rep or dealer. With the unique report from Volvo MARTIS, you can have a close look at operation data and operator behavior all through the life of the machine.
2. Do in-depth research of the seller
Find as much information regarding the seller so that you have a clear sense of how they applied the machine. It could provide you with more knowledge beyond what you discover in inspection, as well as the auction’s report on the equipment.
For instance, let’s assume you have these two excavators with similar size classes, features, and hours. If one was owned by someone doing earthmoving and the other one by a quarry contractor, the one owned by the earthmoving contractor might experience less wear and tear even if it has similar hours with the other one.
Besides, different rental companies have different standards of fleet maintenance. So, do your homework.
3. Do in-depth research of the cost
Learn what similar types of the machine have been selling for at past auction. You should also understand what factors play a role in those prices – hours, condition, age, and so on. Do your homework on pricing outliers.
It is not difficult to find the sales prices of heavy and compact machines at recent auctions.
You should also remember that the winning bid’s dollar amount isn’t the only cost of purchasing at an auction. If any buyers’ fees are included, find out in advance. Then, get an estimate on the amount it will cost to move the equipment from the auction site to your specific location. For those who are transporting it across an international border, e.g., to Latin America or Canada, think about the export implications as well.
And lastly, get financing before that auction. Usually, auctions might need payments to be made in full in a couple of days.