Advantages of leasing used construction equipment

By: Murray Derraugh, Vice-president, Credit

Whether you are shopping at a reputable construction equipment dealer, participating in a Ritchie Bros. Auction or shopping for a great deal privately, leasing used construction equipment can be a great alternative to buying new.

Here are six reasons you should see value in leasing used construction equipment:

1. Someone else has paid the depreciation

Construction equipment can depreciate as much as 20 to 40 per cent in the first 12 months but retains value in years two, three and so forth providing it is properly maintained. That means if you buy a $500,000 new Caterpillar Grader, approximately $150,000 value is lost in the first year. By leasing used, you avoid that initial depreciation cost.

2. Holds value as long as it is maintained

Reputable dealers like Headwater Equipment, will track the maintenance history on equipment and know how many hours various parts can go before they need to be maintained or rebuilt. Keeping equipment well maintained will help guarantee the value of the equipment remains high.

3. Complete rebuilds should come with a warranty

Speaking of maintenance, complete rebuilds often come with a warranty of some sort. This also ensures the value of a used piece of equipment stays as high as possible.

4. Technology is slow to change, so you’re not missing out on the latest gadgets

Technology in big construction equipment does not change rapidly, so you’re not at a disadvantage using a five year old wheel loader for example, versus a new one.

5. Low cost of ownership

Many construction projects require specific equipment on a short term basis and need the flexibility to unload it at the end of a contract. Because the depreciation is so slow after the first 12 months you can sell the equipment a year later for close to your purchase price, keeping your overall cost of ownership relatively low compared to buying new.

6. Long order times with new

Certain types of construction equipment can have a long waiting list when buying new and we all know time is money in the construction industry. Through finding and leasing used, you get access to the equipment you need right away.

Still have leasing questions? Check out our Complete Guide to Equipment Leasing.

And remember, no matter where you find construction equipment to purchase, CWB National Leasing can provide financing packages to suit your cash flow. Hear from Headwater Equipment on how we’re working with them to deliver quality, used yellow iron to our customers all across Canada.