5 tips on what to look for when purchasing used equipment for your business

Published on December 1st, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Know what your budget is

The leading reason why most people will opt for used equipment is because of the decreased price you can get on the equipment. Furthermore, when armed with good negotiating skills you can get it for way less. If you are running or a project that needs to work in the most efficient way without ripping through your finances, then budget is essential. Just because you can afford the equipment at a very cheap price will always have to be weighed against whether you need it. You will also have to take into factor the replacement costs. You can always weigh your equipment options against your budget to make a sound choice. You should also consider whether you need a loan to do so, such as taking out a small business loan to buy your equipment.

Inspect your equipment

Since you know it is used, it’s best to make sure that you are getting the best deal for your money. Ask if the equipment has a warranty and if it is transferred when you buy it. Despite finding the best deal at dodgy Franks, it’s best to buy your used equipment from a reputable seller. Don’t be fooled by its appearance or the smooth talk the seller is giving you. Turn your FBI detective skills and give it a good visual inspection for any rust, leaks, funny things that go bump, or fall off. Prod and poke it. If it is possible, take it out for a test run to see how it fairs. If you still not sure you can take it to an expert who will either give it a thumbs up or down.

Know your equipment’s history

You can always run a background check to check your equipment’s history to ensure that you are not being sold a dud that will cost you more in future. Ask your seller if they can provide you with some documented information about the equipment you consider to be valuable. If it something that has only been used by the seller, ask how it has been maintained over the period that they were in ownership of it. What conditions was it used in, or even how long it has been under their operation. This will be a worthwhile investment so take your time.

Ask for manuals

Even if it seems as a no brainer, it is advisable for you to ask for the manuals and go over how it works. This could be beneficial for both experienced and unexperienced personnel that will be operating the equipment to prevent premature break down’s.

Ask for help from a professional

When taking out something like a $10,000 business loan to purchase your equipment, make sure to always shop around and compare. Whether this is for loans or the actual equipment itself. Sit down with a financial advisor who will help you see holes that you overlooked when looking to finance your used equipment. Your future self will thank you for it.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

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The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

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