When you have used machinery, how do you figure out what it's worth? You have a few different options available, but only one really solid one. Used equipment values can vary widely, with a number of different sources, but how do you make sure that your equipment value is as accurate as possible? Here's a quick look at different ways you can have your equipment valued, along with the benefits and drawbacks of each method.
How do you accurately determine used equipment values?
So what are the different ways you can have your equipment valued? You could take a good look through online or live auctions, classified ads, magazines or similar markets to see if you could find the same or similar equipment. You could talk to your local dealer and find out how much they would give you for the equipment on trade. You could pay to an equipment appraiser to determine the value of your equipment. Though each of these approaches would give you a value for your equipment, only one of these would be accurate.
Equipment that is being offered for sale is priced based on how quickly the seller wants to move the equipment. If they're going for a quick sale, they may try to low ball the price or put on a fast paint job to hide years of abuse. If they're really not that enthused about trying to get rid of the equipment, they may price it high so that they're only getting rid of it for the price they want.
A dealer may offer you a price based on whether they need to sell new equipment or want to deal with the hassle of trading in used equipment. If they need to make a sale to improve their commissions for the month, they may offer you a much higher value than your equipment is really worth. If, on the other hand, they have a decent paycheck coming up and don't want to deal with the hassle of handling your used equipment, they may offer you significantly lower than it's actually worth.
Though you need to pay for an equipment appraisal, it actually provides you with the most value. An equipment appraiser deals with similar machinery every day can tell what kind of condition your machinery is in, and may even be able to recommend repairs to help improve the value. They take into account your industry's current condition, helping you determine whether you should sell your equipment outside of your region due to a localized slump. The valuation report they produce uses standardized methodologies to determine the value of your machinery, which means it will stand up well to very strong scrutiny if you're getting a loan or facing an insurance loss, incorrect tax assessment or a lawsuit.
Though there are a number of different ways you can calculate used equipment values, getting the accuracy you need for most purposes can only be found when you work with a certified equipment appraiser. Because of their level of training, expertise and experience, certified appraisers are able to calculate values and produce valuation reports that stand up well to the strongest of scrutiny, including legal, financial, insurance and tax agency circles. Working with a certified appraiser is the best way to ensure you're getting your money's worth out of your equipment valuation.