Buyer beware – or how to reduce the risk when you buy used equipment.
Despite the massive choice of used heavy equipment and trucks for sale, and the economic advantages of buying used, some business owners shy away from this money-saving option. They fear the risk may outweigh the reward. But with a little extra effort on a buyer's part, the most common used equipment buying pitfalls can be avoided.
Here are 5 ways you can take the risk out of buying used equipment and trucks at live auctions, via online auction marketplaces, privately, or through a dealer.
1. Buy equipment from a reputable seller
Spend a few minutes reading online reviews, testimonials and business reports to get a good sense of whether you're buying from a legitimate and reputable seller. Check the following:
- Public company records
Choose well-established companies with a long history and large customer base. Publicly-traded companies are required to publish their financial statements, so you can easily find out if the company is stable and likely to be in business in the long term.
- Online reviews
Google and Facebook are good places to find unbiased customer reviews. Once published, Google and Facebook reviews can't be removed or edited by the page owner.
- Customer testimonials
Testimonials show that other equipment buyers are more than willing to endorse the seller. If none are available on a company's website, call the company and ask if they can provide you with the contact information for a few recent customers.
- Better Business Bureau
Visit the Better Business Bureau in your area (bbb.org in the US and Canada) and search for the business you're considering buying used equipment from. The Better Business Bureau maintains a list of businesses with contact information and reported consumer complaints.
2. Do a background check
Before purchasing used equipment or trucks, ensure the seller is the legal owner or has the legal authority to sell on the owner's behalf. Two things to beware of: stolen equipment and liens.
If you're buying from a business, ask if the equipment is owned outright by the seller; if they can't confirm, do your own check. If you're buying from a private seller, ask them to provide the original sales invoice for the equipment and check that the name on the sales invoice matches the seller’s name.
You can also check ownership using the equipment's serial number, or the truck's VIN. Ask your local police department or a private service to run the serial number or VIN to see if the item has been reported stolen. For a fee, you can request an equipment check from an organization in your area that tracks stolen equipment (for example, the National Equipment Register's IRONcheck: ner.net/ironcheck).
If you plan to finance your purchase, most financing companies will do a thorough check on the equipment's background history, which includes checking if the item has been reported stolen.
3. Ensure clear title on equipment
If you mistakenly purchase equipment that is not clear title or has a lien applied (i.e. the seller has not paid in full money borrowed from a finance company or bank to purchase the item), you may have to forfeit ownership to the lending institution.
4. Inspect equipment before you buy
Most used equipment is sold as-is, where-is. If possible, test and inspect used equipment before you buy. If you don't have considerable heavy equipment knowledge, have a qualified mechanic or experienced operator carry out both a physical and functional inspection on your behalf.
If you're buying online, look for websites that provide detailed equipment information and photos. Scrutinize pictures carefully and don't be afraid to email any questions you have to the seller or to ask for photos of the equipment from different viewpoints; for example, a photo of the undercarriage, engine compartments or hours meter. Ask to see service or maintenance records.
And if you’re buying sight unseen, confirm that the item you collect matches the description that was advertised—before you drive away.
5. Leave a payment trail
If you are making a purchase online or from a private seller, make sure you have some kind of recourse if the equipment arrives in a condition that differs from the image presented online, or if the equipment doesn't arrive at all.
Check the terms of any online transaction before you buy, and look for websites that have a secure escrow process.
With each purchase you make, ask for a receipt, invoice or other documentation naming you as the owner of the equipment. If you are buying from a private seller, try to avoid paying in cash. Pay by certified check and leave a paper trail that can help prove you paid for the item.
About Ritchie Bros.
Ritchie Bros. is the world’s largest industrial auctioneer. Learn more about buying equipment at Ritchie Bros. live unreserved auctions or about buying equipment at EquipmentOne online auctions.
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