Ever stood in front of a machine & wondered about its value before selling, or if it’s a good deal before buying? Selling & buying equipment feels like a maze for buyers and sellers. That’s where dealers use their valuation checklist for machinery used in construction, leveraging processes like machine depreciation rate, age, brand value & many other factors.

Accurate machine pricing isn’t just about numbers; it’s an intricate process & getting the best price can be beneficial when selling or buying used machinery. In this blog, we will unearth the used equipment valuation method & factors playing a key role in pricing, plus how sellers determine the market price of used construction equipment.

JKIPL is one of India’s best platforms for buying & selling used construction equipment. We provide transparency, fair values, detailed machine inspection & bevvy of brands for buyers to choose from.

Used Equipment Valuation Method Applied By Sellers

Market Demand & Machine Type

The value of used machines is directly related to the condition of the construction & infrastructure industry. When government spending & private sector investments are more, the demand for reliable & used machinery rises. This creates spikes in machine demand, which influences the market price of used construction equipment.

Dealers also regularly monitor market dynamics, including technological advancements, demand for specific machines, overall liquidity & rental trends to set machine depreciation rate & price machines accordingly. Additionally, specific machines like backhoe loaders, compactors, & excavators, etc., are often priced higher for their demand & versatility.

Machine Condition & Maintenance History

When it comes to practising the used equipment valuation method, a machine’s condition is the first thing sellers look for. Therefore, the condition of your machine is critical. For a buyer, a machine’s overall condition tells a tale about its performance & reliability. This is a reason why machines with low operational hours & detailed maintenance history always get a higher price.

When you’re selling your equipment, dealers often run a mental valuation checklist for machinery. They look for signs of wear, damage & poor maintenance, all of which reduce a machine’s resale value. A well-documented service history acts as proof to show a machine’s proper maintenance & justifies the premium asked by the seller.

Brand, Model & Features

When you’re selling a used construction machine, the brand is the first thing asked by the buyer or a used equipment dealer. Brand reputation carries a massive weight & plays a key role in determining machine depreciation rate. Reputed brands like JCB, Caterpillar, Komatsu & Tata Hitachi are widely popular for their durability, performance, & after-sales support, demanding a high market price of used construction equipment.

Additionally, certain models, especially ones that are best-sellers for companies, offer better fuel efficiency, & heavy-duty machines retain value more & cost more. Models with advanced features like telematics, safety technologies, fuel monitoring & multiple modes are preferred by many, thereby demanding higher prices.

Machine Age & Depreciation Rate

Machine depreciation brings a painful reality. From the moment you buy a construction machine, its machine depreciation rate (which depends on various factors) starts eating into its value. A dealer’s used equipment valuation method often includes assessing the machine’s age & operational hours to accurately estimate the rate of machine depreciation.

While older machines often have lower selling values, ones maintained well can defy age & get a better resale value. The machine depreciation rate isn’t fixed; it depends on machine to machine, assessing factors like brand, condition, & demand. BS6 machines & ones with modern features trade for a higher price than older ones, marching towards being obsolete.

Geographical & Economic Factors

Geographical & economic limitations play a crucial role in determining machine depreciation rate & form a key part of the used equipment valuation method. The location of the machine is crucial. Factors like economic condition or growth & the place’s construction industry can influence a machine’s demand, which can ultimately increase demand & market price for used construction equipment.

Dealers also take transportation & taxes into consideration, as both can take a significant chunk of the equipment’s value. Places where demand is high & availability is low help to set prices higher for certain equipment. Macro factors like inflation impact & interest rates also influence a buyer’s purchasing decision & shape the used equipment market of the region.

How To Determine A Machine’s Fair Market Value

  • Search for the type of equipment online & check prices to compare the average market price.
  • Used a comprehensive valuation checklist for machinery to inspect the physical condition.
  • Evaluate maintenance & service records carefully to predict future performance.
  • Get quotes from multiple dealers.
  • Consider the brand, condition & hour meter of the equipment.
  • Look for attachments as they can significantly add value.

Importance Of Knowing Machine Depreciation Rate & Valuation

  • Helps you get accurate, fair & unbiased prices.
  • Enables you to know the average price range & negotiate accordingly.
  • Assists you in forecasting a machine’s future value.
  • Provides a clear idea about the condition & age.
  • Offers clarity regarding the total cost of ownership & whether it’s a good decision.
  • Helps you prevent overpaying as a buyer & underselling as a seller.
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