Although the used equipment market has been steady, it doesn’t mean there won’t be softer prices ahead, especially compared with 12 months ago.
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“It’s still a strong market, even though it’s not as good as last year,” says Michael Cole with Cole Equipment, a used equipment dealer in Ada, Oklahoma.
“The low-hour machines will still bring a premium, but there’s a lot of three- to five-year-old tractors out there in rental fleets, especially dealer rental fleets, that weren’t supposed to be around that long,” says Dennis Howard, vice president fleet and remarketing with Deere dealer RDO Equipment. “We’ll see that category start showing up on the market in the next three to six months and getting softer prices.”
Others have a slightly different perspective. Josh Alters, director of remarketing at Komatsu, says he’s seen the used equipment market experience a small increase this year. “It has even exceeded our expectations slightly,” he says.
Thanks to a booming economy, the current demand for used equipment is high and the supply of good machines somewhat limited, Alters says. “The energy sector – oil and gas – is still very strong, and we’re seeing some strengths in segments of the housing market as well,” he says. Availability would be even more constrained and prices for used equipment higher, except that the leasing companies and equipment rental fleets have put a lot of good low-hour used equipment into the market over the last two years, he says.
The used equipment market is a downstream market, and three upstream forces are currently affecting it. They are the continuing difficulty in getting some types of new equipment, the number of machines coming off lease and the impact of the rental market.