Equipment Appraisal Blog | Understanding Machinery Appraisals

What exactly is machinery valuation and how does it benefit your business?

Posted by Equipment Appraisal Services on Tue, Oct 09, 2018 @ 04:48 PM

After you've been in business a bit, you may have heard the term machinery valuation tossed about on occasion. If you've wondered what it's all about and why you might want to consider getting one on your own business, you're not alone. Here's a quick look at what exactly an equipment appraisal is and the many benefits it can bring to your company.

What exactly is machinery valuation and how does it benefit your business?

Most people have been through or are somewhat familiar with the process of having a home appraised or a vehicle valued when considering selling it or trading it in. Someone who seems to maybe know what they're doing will look it over, hem and haw and finally tell you what it's worth. This process tends to be a good bit more reliable in real estate than cars or trucks, but either process can be up to some level of interpretation. 

Now imagine this process but with machinery. You may be dealing with an equipment dealer, but much like the process of trading in a car, you'll often end up getting the value they want you to get - high if they need sales or low if they don't want to deal with selling your used equipment. Fortunately, there's a much better way to have your equipment assets appraised - by using a certified equipment appraiser.

When equipment appraisers work through the process, they are an independent third party. They don't have any reason to push for you to trade now or keep your current equipment. They simply analyze what is. Instead of worrying about what their commission will be, they can get into the nuts and bolts of your equipment, the industry and what it's actually worth. They use this information to create an equipment valuation report that provides you with a number of benefits:

  • The appraisal itself tells you something about the condition of the machinery. Is there a particular part that you missed a recall on? Perhaps there's some wear that isn't that interesting in and of itself, but it could point to wear and failures elsewhere in the machine that could lead to expensive repairs.
  • Because appraisers are familiar with your industry, they may know that though the region you're located in is currently in a slump, the market in another area may still be rather hot. They may even have some connections there, giving you the opportunity to make a profit off of machinery that would otherwise sit around or lose value.
  • Certified appraisers use tested methodologies to calculate the value of your equipment. Because these methodologies have been around for a long time, they've been tested in court, tax agencies, financial institutions and insurance companies. That means they stand up to strong scrutiny, allowing you to save time when dealing with these organizations.

Now that you know what a machinery valuation is and the many benefits of having one performed on your equipment assets, it's time to act. By having an equipment appraisal performed on your assets now, you can help avoid a lot of hassles no matter what life throws your way. Make sure you work with a certified equipment appraiser to ensure that they're familiar with the many factors that can come into play when you have your machinery appraised.

Tags: machinery valuation