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It’s no secret that there are cost savings in buying used equipment. However, there are clear obstacles that will prevent a typical manufacturer from coming out net positive on their investment, especially when you take into account opportunity costs. While used equipment may seem more economical, the ramifications of buying more worn-down machinery can come at costs that will slow instead of improve your production.
When considering used vs. new machinery, here are the hidden costs that not every business takes into account when purchasing a used machine:
When you purchase a used machine, it is given that the age of the machine is greater than any used machine. As a result, you can assume the machine’s salvage value will be lower, as both age and previous use play a factor into its valuation.
Running a machine for extended periods, it can be expected that periodical maintenance fixes will be required to keep the machine running. When it comes to industrial & high production machinery, these fixes aren’t just expected, but critical to daily operations. Depending on the product line, new machines are usually covered under warranties, which makes the first few years of ownership stress free.
As for used machines, the older the equipment is, the higher the maintenance costs are expected to be. In fact, in some situations we see that businesses who buy used machinery will have maintenance fees quoted to them that outprice the cost of a new machine. In that case, not only is a new machine worth it – it’ll be cheaper than a used one with its maintenance!
When machines that need to cut sheet metal reliably every day work for several years to a few decades, it wears down on the machine. Depending on the period of time it has been used, your equipment purchase may hinder your operations instead of help it. Production levels can slow substantially, and throughput can become a critical factor to consider. However, with new machines, you always know what you’re going to get.
Not only are they slower, but older machinery may not be as reliable. If something you allocate to run for 30 days straight breaks down after the first day, what do you do? Generally, there aren’t support systems in place for used machinery, on top of the fact that getting service may take weeks out of your manufacturing process.
The costs associated with this can be immeasurable, and in times of peak demand this may destroy your business. With newer machinery, breakdowns are less frequent and can really take this risk factor out of your machinery. With new machinery, you know you’re getting the latest technology, so you can expect better results than their older counterparts.
Especially in older machinery, used machinery will have generally have higher power consumption for standard operations. As a result, their carbon footprints become greater, and so does your business’s utility bill. Who knows, maybe there are even tax incentives in your state for getting closer to carbon-neutrality, too.
In New England (where Direct Machines is situated), many industrial manufacturing companies work in smaller locations that are near other industrial businesses. Although there may no issues with noise levels, workers involved in the operations may experience a worse working environment than if they had never, quieter machinery. When it comes to gas vs. electric too, there are obvious implications for noise levels. It’s a consideration not many small businesses take into account—but needless to say they should.
If you're wondering why buy new equipment, it is so that you can avoid these hidden costs. Yes, we are biased – because, at Direct Machines, we only sell new equipment. However, be sure to consider these factors seriously before you make any big purchasing decision.