Equipment Appraisal Blog | Understanding Machinery Appraisals

How is an Aggregate Equipment Appraisal Handled?

Posted by Equipment Appraisal Services on Mon, May 18, 2020 @ 08:00 AM

Cement Plant and power sation during sunset

You've got a lot of equipment tied up in your aggregate, grading or earthmoving operation, but what's the value of that machinery? When you have an aggregate equipment appraisal performed on your machinery, you can find out a lot about its estimated value, expected remaining lifespan and similar information that makes it much easier to make smart decisions for your aggregate business. But what exactly is involved in the overall process? Here's a quick look at how this type of appraisal is handled and what you can expect from the results.

How is an Aggregate Equipment Appraisal Handled?

 When you need to have your aggregate equipment appraised, this can cover a larger range of machinery than you might expect. Your large dump trucks, earthmoving equipment such as loaders and backhoes, crushing and screening equipment, conveyor belts and similar equipment can all be appraised by the same professional in most cases. The appraiser will need to know a range of different information, such as manufacturers, model numbers, year of manufacture, the number of hours on the equipment, the availability of any maintenance and repair records, the type of environment it's been used in and similar information.

But why is all of this information necessary for the appraisal process? Much like with used cars and trucks, some manufacturers and models have a better reputation than others with regards to quality and longevity. This reputation and the performance that has built it will impact the future overall useful life of the equipment, which in turn has a strong impact on the equipment's market value.

Similarly, from a condition viewpoint, a piece of equipment that has obvious signs of abuse or neglect is going to have a lower resale value than one that has been well-cared for over the years. If the assets have been well maintained, including taking the time for necessary component rebuilds and replacements completed over its lifespan, the effective age of the machine as a whole will be less than the chronological age, which can play a significant role in appraised value. All of these factors can impact your equipment's current fair market value.

Once that information has been gathered, the appraiser will work through the available market data and analysis to estimate your equipment's value. This information is carefully condensed into an appraisal report, which provides you with the sources and data that has gone into the overall work product. The report can then be utilized for re-financing, potential sale, insurance claims, legal settlement or any other ongoing business activity.

By having an aggregate equipment appraisal performed on your machinery, you can quickly determine the estimated value of your equipment as well as a lot of other useful information that can help you make smarter business decisions. However, this information is most accurate when you have the appraisal performed by an accredited third-party equipment appraisal specialist who doesn't have any interest in the outcome of the calculated value of your equipment the way that an equipment dealer may. Make sure to ask your prospective appraiser about their background and accreditation to ensure the best results.

Tags: Aggregate Equipment Appraisal

How Does Metal Fabricating Asset Valuation Work?

Posted by Equipment Appraisal Services on Mon, May 04, 2020 @ 08:00 AM

Industrial worker cutting and welding metal with many sharp sparks

When you work with metals, you've got plenty to keep on top of. Metals futures, commodity trading and market changes that impact your business' profitability can quickly take up a lot of your daily focus. But that doesn't mean that you should forget about the value of your equipment! Many business owners don't understand how a metal fabricating asset valuation works, which causes them to wait until specific circumstances to have one performed. However, by understanding how the process works, you can get a better grip on how to use this valuable tool to help manage your business' metal fabrication equipment assets.


How Does Metal Fabricating Asset Valuation Work?

There are a number of areas that are considered during a metal fabrication asset appraisal:

  • What condition is the equipment in? Generally speaking, the equipment's condition in terms of hours, whether it's being used heavily or lightly, if it appears to be in good condition and similar details will help the appraiser determine how high demand will be for a piece of equipment.
  • Is the equipment in demand in the market? As an example, welding robots that can be set up for machine learning are a hot commodity with the popularity of IoT and AI, which can dramatically increase the estimated value of the equipment. Machinery that does not have this capability may see lower values.
  • Does the equipment have any special features, options or kits that have been added that impact its value? When your equipment does more, it often increases the estimated value, provided that it is able to truly deliver value. A feature that was tossed on at the last minute may not perform well, actually lowering value.
  • How well has the equipment been maintained? If you can provide logs of maintenance and repairs, this documentation serves as proof that the equipment has been well cared for over the years and will continue to function long after poorly-maintained equipment will begin to fail. The appraiser also looks for signs of abuse, such as dents, unrepaired issues and similar problems that shorten lifespan.
  • Are there changes in the market that are increasing or decreasing demand for that type of equipment? As with the AI-capable welding robots mentioned above, changes in the market can rapidly change the demand for your equipment. Stay on top of changes that are coming down the road by buying new machinery at the right time.
  • What is the equipment's expected remaining useful lifespan? Knowing how long the equipment will last provides a data point for the appraiser to estimate its value. Equipment that is on the verge of failing has a lower estimated value than equipment that is expected to last a long time.

Metal fabricating asset valuation can be a powerful tool, making it easier to negotiate a fair market price when it's time to buy or sell used equipment, deal with insurance adjusters who don't have a solid grasp of your equipment's value, fight an incorrect property tax assessment or leverage the estimated value of that equipment to help secure financing to grow your business and take it to the next level. However, you can only realize these benefits if your equipment appraisal has been performed by an accredited equipment appraiser, who has been educated in the right way to estimate your equipment's value. An accredited appraiser will never have any problem providing you with verification of their training and background.

Tags: Metal Fabricating Equipment Appraisal