Due to an equipment supply deficit and rising demand, many contractors are turning to auctions as a source of equipment they require. Equipment World spoke with Raffi Aharonian of Rouse Appraisals about how best to prepare for construction equipment auctions.
Before bidding, conduct an inspection yourself or by proxy and arrange financing so you can focus on purchasing without worrying about cashflow issues.
Buying at an Auction
Preparation is key to successfully purchasing at auction. The first step should be arranging financing if necessary – either through signing up on an auction company’s mailing list, browsing the Internet, speaking with equipment dealers or building relationships with experts in construction equipment financing.
Know exactly what you want before searching. Identifying your equipment requires is crucial in order to accurately appraise its condition; this can be accomplished with professional appraisers, auction company websites, or conversations with equipment dealers and contractors.
Once you’ve identified the equipment you require, it is vitally important to research its history. Many auction companies provide detailed inspection reports and maintenance records prior to an auction event that should be reviewed carefully prior to bidding on it. This information can also help assess its overall condition such as mechanical integrity and ability to function as intended as well as title status that could impede financing applications.
Buying at a Live Auction
Auctions offer an excellent way to acquire heavy construction equipment at competitive prices, but it is crucial that buyers understand the process and policies of their auctioneer before participating. Depending on who runs it, registration may require providing proof of financial status as well as possibly paying a buyer’s premium fee.
If you plan to make purchases at live auctions, it is advisable to attend as a spectator first in order to become familiar with the language and process of an auction. Once familiarized, bids can start being placed. Be mindful not to exceed your maximum budget.
At auctions of heavy equipment, it is advisable to bring along a mechanic in order to inspect the equipment. Most heavy equipment auctions offer online inspection reports that can be reviewed. Also make sure the auctioneer offers warranties for their equipment.
Buying at an Online Auction
If the nearest auction site is too far away for you to comfortably travel to, online auctions provide an easier and less time-consuming alternative way of finding used equipment at competitive prices. But these events do come with their own set of challenges.
When purchasing from an online auction, it’s essential that you comply with its rules and bid strategically. Many auction sites require deposits or proof of pre-approval from financing sources in order to complete purchases smoothly and ensure a seamless purchasing experience.
Another consideration when bidding at auctions is that many properties may contain liens that become your responsibility if you win the bid. To protect yourself in case a problem arises, title insurance should always be obtained prior to purchasing property. Furthermore, many auction websites provide financing solutions so buyers can pay off larger purchases in installments – this can be particularly helpful when purchasing more costly equipment or vehicles.
Buying at a Consignment Auction
Purchases at consignment auctions can be an ideal solution for contractors seeking to fill gaps in their fleets, though, like any purchase, it is essential to conduct thorough research. This should include reviewing company records, customer testimonials and checking with the auction house to make sure the equipment has clear title without existing liens attached to its sale.
Before bidding at auctions, familiarizing yourself with current auction prices can also help prevent overbidding at actual events. Pricing guides provide invaluable assistance when identifying which pieces represent good investments versus which may be overpriced.
Once a buyer identifies equipment they are interested in purchasing, bidding begins in earnest. Auctions generally require either a credit card or cash deposit to hold onto the piece of equipment until its sale; buyers can attend in person or through an online portal.
