---
title: What is effective age and why does it matter for your business?
description: When you have equipment, knowing the effective age can help you plan when you need to buy replacement machinery or get equity back out of it. Learn more here.
image: https://www.equipmentappraisal.com/hubfs/effective%20age.jpg
---
[](https://www.equipmentappraisal.com)
# Equipment Appraisal Blog | Understanding Machinery Appraisals
## [What is effective age and why does it matter for your business?](https://www.equipmentappraisal.com/blog/what-is-effective-age)
Posted by [Equipment Appraisal Services](https://www.equipmentappraisal.com/blog/author/equipment-appraisal-services) on Tue, Jan 16, 2018 @ 10:56 AM
- [Tweet](https://twitter.com/share)
Effective age is defined as the difference between the overall economic life and the remaining economic life of a piece of equipment, a structure or similar asset. Though that provides you with a basic overview of the concept, it can often seem much more complicated than that. How is it determined? How will it impact your company's bottom line? Do you really need to know this detail for your machinery? Here's a quick look at those questions and more.
## What is effective age and why does it matter for your business?
Though the above definition of effective age seems rather dry, it does cover the basics. Imagine that you've purchased a cargo van for your company. Purchased new, the expected lifespan is about five years with your expected annual mileage. But what if you found a great deal on another vehicle after a couple years of ownership? By spreading the work between the two vehicles, you may then expect the cargo van to last longer, but exactly how long? That's where effective age comes into play.
If machinery is abused or used in a harsh environment, it may age at a rate faster than would otherwise be considered normal. Salt water, moisture, humidity, sand, grit, dirt, acids: all of these factors can make a piece of machinery age at a much faster rate than would normally be expected, often because they cause excessive wear and tear on the machine's components. If you were considering using machinery like this as collateral in a bank loan, you may find it isn't considered to be worth as much as you might expect.
In both of these cases, the machine itself can be expected to last a longer or shorter time period than may have been originally expected based on the appraiser's prior knowledge of the equipment. Because a machine appraiser spends all day looking at equipment, they have a good eye for when a machine is in exceptional condition and will last significantly longer than expected. For example, a well-maintained piece of equipment that is kept in an ideal environment and worked well below its top specifications can be expected to last much longer than a piece of machinery that is poorly maintained in a bad environment and regularly worked at the very top of its expected performance will.
When you have a machinery appraisal performed on your equipment, you're able to discover about how much longer it can be expected to perform economically for your company. Having this information available makes it much easier to determine when you'll need to purchase replacement equipment. You'll have more time to shop around, learn about the best new features and decide exactly what type of machinery you need and what budget you can afford to spend on the right equipment. That's always a much better option than being forced to quickly replace failing equipment with machinery that won't meet your needs.
By knowing your machinery's effective age, you can better plan for your company's financial needs in the future. This allows you to spread any equipment purchases out over time without having to worry about your equipment failing before it's paid off. By knowing this figure, you can ensure that your company has the means in line to replace the equipment when the time comes without exposing the business to excessive risk.
Tags: [Asset Depreciation](https://www.equipmentappraisal.com/blog/topic/asset-depreciation), [effective age](https://www.equipmentappraisal.com/blog/topic/effective-age)
### Subscribe by Email
### Most Popular Posts
### Posts by Month
- [July 2026 (1)](https://www.equipmentappraisal.com/blog/archive/2026/07)
- [June 2026 (2)](https://www.equipmentappraisal.com/blog/archive/2026/06)
- [May 2026 (2)](https://www.equipmentappraisal.com/blog/archive/2026/05)
- [April 2026 (2)](https://www.equipmentappraisal.com/blog/archive/2026/04)
- [March 2026 (3)](https://www.equipmentappraisal.com/blog/archive/2026/03)
- [February 2026 (2)](https://www.equipmentappraisal.com/blog/archive/2026/02)
- [January 2026 (2)](https://www.equipmentappraisal.com/blog/archive/2026/01)
- [December 2025 (2)](https://www.equipmentappraisal.com/blog/archive/2025/12)
- [November 2025 (2)](https://www.equipmentappraisal.com/blog/archive/2025/11)
- [October 2025 (2)](https://www.equipmentappraisal.com/blog/archive/2025/10)
- [September 2025 (3)](https://www.equipmentappraisal.com/blog/archive/2025/09)
- [August 2025 (2)](https://www.equipmentappraisal.com/blog/archive/2025/08)
- [July 2025 (2)](https://www.equipmentappraisal.com/blog/archive/2025/07)
- [June 2025 (2)](https://www.equipmentappraisal.com/blog/archive/2025/06)
- [May 2025 (2)](https://www.equipmentappraisal.com/blog/archive/2025/05)
- [April 2025 (2)](https://www.equipmentappraisal.com/blog/archive/2025/04)
- [March 2025 (3)](https://www.equipmentappraisal.com/blog/archive/2025/03)
- [February 2025 (2)](https://www.equipmentappraisal.com/blog/archive/2025/02)
- [January 2025 (2)](https://www.equipmentappraisal.com/blog/archive/2025/01)
- [December 2024 (2)](https://www.equipmentappraisal.com/blog/archive/2024/12)
- [November 2024 (2)](https://www.equipmentappraisal.com/blog/archive/2024/11)
- [October 2024 (2)](https://www.equipmentappraisal.com/blog/archive/2024/10)
- [September 2024 (3)](https://www.equipmentappraisal.com/blog/archive/2024/09)
- [August 2024 (2)](https://www.equipmentappraisal.com/blog/archive/2024/08)
- [July 2024 (2)](https://www.equipmentappraisal.com/blog/archive/2024/07)
- [June 2024 (2)](https://www.equipmentappraisal.com/blog/archive/2024/06)
- [May 2024 (2)](https://www.equipmentappraisal.com/blog/archive/2024/05)
- [April 2024 (3)](https://www.equipmentappraisal.com/blog/archive/2024/04)
- [March 2024 (2)](https://www.equipmentappraisal.com/blog/archive/2024/03)
- [February 2024 (2)](https://www.equipmentappraisal.com/blog/archive/2024/02)
- [January 2024 (2)](https://www.equipmentappraisal.com/blog/archive/2024/01)
- [December 2023 (2)](https://www.equipmentappraisal.com/blog/archive/2023/12)
- [November 2023 (2)](https://www.equipmentappraisal.com/blog/archive/2023/11)
- [October 2023 (3)](https://www.equipmentappraisal.com/blog/archive/2023/10)
- [September 2023 (2)](https://www.equipmentappraisal.com/blog/archive/2023/09)
- [August 2023 (2)](https://www.equipmentappraisal.com/blog/archive/2023/08)
- [July 2023 (2)](https://www.equipmentappraisal.com/blog/archive/2023/07)
- [June 2023 (2)](https://www.equipmentappraisal.com/blog/archive/2023/06)
- [May 2023 (3)](https://www.equipmentappraisal.com/blog/archive/2023/05)
- [April 2023 (2)](https://www.equipmentappraisal.com/blog/archive/2023/04)
- [March 2023 (2)](https://www.equipmentappraisal.com/blog/archive/2023/03)
- [February 2023 (2)](https://www.equipmentappraisal.com/blog/archive/2023/02)
- [January 2023 (2)](https://www.equipmentappraisal.com/blog/archive/2023/01)
- [December 2022 (2)](https://www.equipmentappraisal.com/blog/archive/2022/12)
- [November 2022 (2)](https://www.equipmentappraisal.com/blog/archive/2022/11)
- [October 2022 (3)](https://www.equipmentappraisal.com/blog/archive/2022/10)
- [September 2022 (2)](https://www.equipmentappraisal.com/blog/archive/2022/09)
- [August 2022 (2)](https://www.equipmentappraisal.com/blog/archive/2022/08)
- [July 2022 (2)](https://www.equipmentappraisal.com/blog/archive/2022/07)
- [June 2022 (2)](https://www.equipmentappraisal.com/blog/archive/2022/06)
- [May 2022 (3)](https://www.equipmentappraisal.com/blog/archive/2022/05)
- [April 2022 (2)](https://www.equipmentappraisal.com/blog/archive/2022/04)
- [March 2022 (2)](https://www.equipmentappraisal.com/blog/archive/2022/03)
- [February 2022 (2)](https://www.equipmentappraisal.com/blog/archive/2022/02)
- [January 2022 (2)](https://www.equipmentappraisal.com/blog/archive/2022/01)
- [December 2021 (2)](https://www.equipmentappraisal.com/blog/archive/2021/12)
- [November 2021 (3)](https://www.equipmentappraisal.com/blog/archive/2021/11)
- [October 2021 (2)](https://www.equipmentappraisal.com/blog/archive/2021/10)
- [September 2021 (2)](https://www.equipmentappraisal.com/blog/archive/2021/09)
- [August 2021 (2)](https://www.equipmentappraisal.com/blog/archive/2021/08)
- [July 2021 (2)](https://www.equipmentappraisal.com/blog/archive/2021/07)
- [June 2021 (2)](https://www.equipmentappraisal.com/blog/archive/2021/06)
- [May 2021 (3)](https://www.equipmentappraisal.com/blog/archive/2021/05)
- [April 2021 (2)](https://www.equipmentappraisal.com/blog/archive/2021/04)
- [March 2021 (2)](https://www.equipmentappraisal.com/blog/archive/2021/03)
- [February 2021 (2)](https://www.equipmentappraisal.com/blog/archive/2021/02)
- [January 2021 (2)](https://www.equipmentappraisal.com/blog/archive/2021/01)
- [December 2020 (2)](https://www.equipmentappraisal.com/blog/archive/2020/12)
- [November 2020 (3)](https://www.equipmentappraisal.com/blog/archive/2020/11)
- [October 2020 (2)](https://www.equipmentappraisal.com/blog/archive/2020/10)
- [September 2020 (2)](https://www.equipmentappraisal.com/blog/archive/2020/09)
- [August 2020 (2)](https://www.equipmentappraisal.com/blog/archive/2020/08)
- [July 2020 (2)](https://www.equipmentappraisal.com/blog/archive/2020/07)
- [June 2020 (3)](https://www.equipmentappraisal.com/blog/archive/2020/06)
- [May 2020 (2)](https://www.equipmentappraisal.com/blog/archive/2020/05)
- [April 2020 (2)](https://www.equipmentappraisal.com/blog/archive/2020/04)
- [March 2020 (3)](https://www.equipmentappraisal.com/blog/archive/2020/03)
- [February 2020 (2)](https://www.equipmentappraisal.com/blog/archive/2020/02)
- [January 2020 (2)](https://www.equipmentappraisal.com/blog/archive/2020/01)
- [December 2019 (2)](https://www.equipmentappraisal.com/blog/archive/2019/12)
- [November 2019 (2)](https://www.equipmentappraisal.com/blog/archive/2019/11)
- [October 2019 (2)](https://www.equipmentappraisal.com/blog/archive/2019/10)
- [September 2019 (3)](https://www.equipmentappraisal.com/blog/archive/2019/09)
- [August 2019 (2)](https://www.equipmentappraisal.com/blog/archive/2019/08)
- [July 2019 (2)](https://www.equipmentappraisal.com/blog/archive/2019/07)
- [June 2019 (2)](https://www.equipmentappraisal.com/blog/archive/2019/06)
- [May 2019 (2)](https://www.equipmentappraisal.com/blog/archive/2019/05)
- [April 2019 (3)](https://www.equipmentappraisal.com/blog/archive/2019/04)
- [March 2019 (2)](https://www.equipmentappraisal.com/blog/archive/2019/03)
- [February 2019 (3)](https://www.equipmentappraisal.com/blog/archive/2019/02)
- [January 2019 (1)](https://www.equipmentappraisal.com/blog/archive/2019/01)
- [December 2018 (4)](https://www.equipmentappraisal.com/blog/archive/2018/12)
- [November 2018 (4)](https://www.equipmentappraisal.com/blog/archive/2018/11)
- [October 2018 (5)](https://www.equipmentappraisal.com/blog/archive/2018/10)
- [September 2018 (4)](https://www.equipmentappraisal.com/blog/archive/2018/09)
- [July 2018 (5)](https://www.equipmentappraisal.com/blog/archive/2018/07)
- [June 2018 (4)](https://www.equipmentappraisal.com/blog/archive/2018/06)
- [May 2018 (2)](https://www.equipmentappraisal.com/blog/archive/2018/05)
- [April 2018 (4)](https://www.equipmentappraisal.com/blog/archive/2018/04)
- [March 2018 (4)](https://www.equipmentappraisal.com/blog/archive/2018/03)
- [February 2018 (3)](https://www.equipmentappraisal.com/blog/archive/2018/02)
- [January 2018 (4)](https://www.equipmentappraisal.com/blog/archive/2018/01)
- [December 2017 (4)](https://www.equipmentappraisal.com/blog/archive/2017/12)
- [October 2017 (3)](https://www.equipmentappraisal.com/blog/archive/2017/10)
- [September 2017 (3)](https://www.equipmentappraisal.com/blog/archive/2017/09)
- [August 2017 (4)](https://www.equipmentappraisal.com/blog/archive/2017/08)
- [July 2017 (3)](https://www.equipmentappraisal.com/blog/archive/2017/07)
- [June 2017 (4)](https://www.equipmentappraisal.com/blog/archive/2017/06)
- [May 2017 (5)](https://www.equipmentappraisal.com/blog/archive/2017/05)
- [April 2017 (1)](https://www.equipmentappraisal.com/blog/archive/2017/04)
- [March 2017 (4)](https://www.equipmentappraisal.com/blog/archive/2017/03)
- [February 2017 (4)](https://www.equipmentappraisal.com/blog/archive/2017/02)
- [January 2017 (5)](https://www.equipmentappraisal.com/blog/archive/2017/01)
[See more](https://www.equipmentappraisal.com/blog/what-is-effective-age#)
© 2026 Equipment Appraisal Services
```json
{
"@context" : "https://schema.org",
"@type" : "BlogPosting",
"author" : {
"@type" : "Person",
"name" : "Equipment Appraisal Services",
"url" : "https://www.equipmentappraisal.com/blog/author/equipment-appraisal-services"
},
"datePublished" : "2018-01-16T15:56:00.000Z",
"headline" : "What is effective age and why does it matter for your business?",
"image" : [ "https://www.equipmentappraisal.com/hubfs/effective%20age.jpg" ],
"mainEntityOfPage" : {
"@id" : "https://www.equipmentappraisal.com/blog/what-is-effective-age",
"@type" : "WebPage"
},
"publisher" : {
"@type" : "Organization",
"logo" : {
"@type" : "ImageObject",
"url" : "https://www.equipmentappraisal.com/hubfs/Images%202020/equipment_appraisal_services_header_logo.svg"
},
"name" : "Equipment Appraisal Services"
}
}
```