Question

"Under what conditions might a company prefer to invest in used equipment rather than new equipment?"

Answer 1

Under following conditions a company prefer to invest in used equipment than new equipment:

• Cost Saving : - A used equipment costs half the new one even less depending upon the usage.
• Flexibility: - Buying used equipment offers a high degree of flexibility for your business. If you have short term contracts that require a specific type of machine, you can acquire it relatively quickly and then easily sell it after the job wraps up—with little depreciation

• Avoid initial depreciation:- New heavy equipment and trucks are no different than new cars in that the minute you drive them off the lot, they depreciate in value – as much as 20 to 40 per cent in the first 12 months!1 Buy used equipment and you’re avoiding that initial depreciation.

• Used equipment holds its value : - Although used equipment has depreciated, it can hold its value if it’s well-maintained. When it’s time to sell, it’s actually possible to get close to what you paid if you sell at the right time, to a market where your equipment is in demand.

• More choice :- The global used equipment market is massive, to say the least. And that’s good news for buyers. That means more choice of equipment than any one brand could ever offer.