It is possible to get bank repo construction equipment for far cheaper than you can get the same equipment through retail channels. This is because when the lease is defaulted upon by the original owner the financial institution must make up the shortfall by repossessing and later selling the equipment that the lease was for. If you are purchasing for yourself or for your construction company then you can use this as a chance to get some great investments. This guide will go through everything you need to know about financing construction equipment, buying repossessed machinery and tools and some extra tips for the auction house.
The Best Commercial Equipment Financing Option – Tool and Heavy Truck Lease Deals
You have a variety of options when it comes to commercial equipment financing such as line of credit, personal and business loans, and leases. However, the best commercial equipment financing is leasing previously used equipment back from the financial institutions. Once a lease has been defaulted on the bank or leasing company will repo the equipment and in order to recoup on their losses they will either sell or lease the same equipment out again. Most of the time quality used gear is just as good as new but equipment lease financing on new products is just too costly for most people or businesses in the current economic climate. As such, it is typically a better idea to simply lease out used equipment to get the same performance at a much lower rate.
The lease companies are more than happy to have you do this as it helps them recover from the default and so they make this one of the most attractive commercial equipment financing options available by offering cheaper rates and shorter contracts. Equipment leasing companies providing this service are very common now due to so many small and large construction companies going out of business in the economic decline. While this is a bad thing in the traditional sense it presents a unique opportunity for new businesses invest in equipment cheaply. In fact, this is one of the only times where you will be able to find trucks for lease at well below retail leasing prices because companies do not often default on these lease trucks under normal conditions. Used commercial truck deals like this might not come along again in the future, a wise investor would take advantage of the situation as best they can.
Bank Owned Heavy Equipment and the Used Construction Equipment Auction
Finding an auction to buy cheap used equipment is getting pretty easy, especially in city areas. There are auctions in more suburban areas but most of the time the equipment is shipped to an auction ground in the nearest city. If you live in or near a major city or in an area that has a large construction industry then you should be able to find the next auction’s details in the local paper or online. Sometimes repo companies will instead hold their auctions completely online either with or without live inspections. Going to live inspections is recommended as you will read in the next tips section but if you can find a good deal at one without an inspection it might be worth bidding on.
Getting a Bargain on Equipment Lease Financing and Used Equipment Auctions – Bonus Tips to Save
There are a few pieces of advice that you should observe when you go to an auction to buy large construction gear. The following are the three main pieces of advice that you should know.
– Keep a list of all of the things that you currently need and might need in the future. Without such a list you are much more likely to over spend on a singular item that you really want. Giving yourself options also gives you room to let some items go.
– Learn everything you can about the equipment on auction before you bid. Nearly all auctions have a strict no returns policy and you cannot simply change your mind. Know exactly whether each item is right for you or you could end up wasting a fortune on something that isn’t right.
– Inspect everything that you intend to bid on. If pre bidding inspections are being held then you should go to them as they can let you know exactly how much you are willing to spend on each thing.
Overall you should take care and make sure that the excitement of buying auctioned bank repo construction equipment doesn’t force you to do something you will regret.