Our customers often ask us about buying new vs. used recycling equipment, so we thought we’d share some considerations to help make your decision easier.
Of course, the purchase price of used recycling equipment is less than buying new equipment. However, it’s important to look at the total cost of ownership of used equipment – the total cost of buying and operating the equipment over its expected useful life.
A lot of used waste recycling equipment that’s on the market is very used – it’s not unusual to see equipment for sale that’s over 20 years old. If you can’t see it in action and don’t know the previous owner or the service history, are you taking a risk on your investment? We believe there are good opportunities out there but it’s important to make sure you’re looking at the right factors when you make your decision.
Consider your total cost of ownership when purchasing used recycling equipment
To make a good decision about new vs. used, you need to look at more than just the purchase price. The right equipment is equipment that will contribute the most profit to your recycling operations over its useful life. The question to ask with used equipment compared to new equipment is: “Can I save enough money with the lower purchase price to offset any increased costs from operating used equipment over its useful life?” The answer lies in figuring out the total cost of ownership.
Let’s take a look at some of the operating costs of recycling equipment apart from the purchase price.
The operating costs of new and used waste recycling equipment will be easier to predict during the warranty period. However, new equipment will have at least a year’s warranty, but used equipment might have none, or perhaps 90 days at best.
Some costs will be about the same for new or used equipment, such as:
- start up
- operator training.
Many operating costs may be more for used equipment. For example:
- Higher electricity costs due to worn parts and older, less efficient electrical system design.
- Power supply modification. A lot of used recycling equipment was originally built for US customers and is set up to operate at 460V. If your facility has a 600V supply, you’ll need to modify the equipment or run a transformer. This may increase your electricity costs and could lower the equipment’s performance.
- Availability of parts. Parts may require fabrication if they’re no longer available. Or the parts may have been superseded, so that you’re now required to buy a whole upgrade kit instead of just the part you need.
- More regular maintenance to keep your equipment running at a good level of productivity.
- More unplanned downtime.
Keep in mind if you’re financing the purchase with a lease, the interest rates may be higher on used equipment.
Used recycling equipment opportunities
Many reputable equipment dealers offer used recycling equipment that has been refurbished properly. They may offer a 90-day warranty on some items.
If equipment has been refurbished, it’s important to look carefully at what work has been done. For example, a used baler may have new shear blades, wear pads and cylinder seals. But if it was really close to needing a re-line, it won’t last long before a major overhaul is required.
Here are some situations where good-quality used recycling equipment may be available:
- Factory approved dealers and distributors offer used equipment that’s been taken in trade for a larger machine. If the dealer sold the equipment new originally, and has serviced it regularly since then, chances are it’s in good shape. A refurbishment by an authorized dealer means that properly trained staff used approved parts to bring the equipment close to new condition.
- Rapidly growing businesses that have outgrown their equipment and need to “trade up.” If the equipment has supported rapid growth it’s likely been well maintained to minimize downtime.
- A company that recently bought equipment but needs to sell it due to acquisition, relocation or consolidation, or maybe had to cease trading for some reason.
If you’re deciding whether to buy new or used recycling equipment, we can help you. Please contact us to learn more.