There are 3 reasons why heavy machinery and construction equipment finds its way to auction.
- De-Fleet – Units are no longer required by the company. Usually bought for a specific project that has ended. These units can often be sold at a good price due to the value being paid for by the project and therefore the seller is just looking to recoup some costs.
- Dealer Stock – Units are fixed up by a dealer and are built to a good spec and good condition. Therefore sellers are looking for market value and pricing is usually close to that of going to buy directly off the dealer floor.
- Liquidation – The seller is in financial difficulty and units often have a low reserve price or no reserve and the seller is looking for the best price they can get. Great deals can come from this type of auction
Make sure you understand the type of auction you are looking to participate in and then do the following:
Get to know the auctioneer:
There are many auction houses in South Africa. It is important to get to know the auction house you are looking to bid on. Although auctioneers do not require a licence, a little research can quickly show whether the auction house is reputable.
Do some research on the seller and condition of the machines:
In De-fleet and liquidation auctions, often the seller of the units is public knowledge. Especially with bigger units, do some research on the company, understand where the units have been working. The same equipment can be used for different applications and therefore less wear may be on some.
Also place more value on well-known companies selling their equipment. This is because they usually service their units on time and with quality parts. They also have full service histories that are available to the buyers.
Make sure you view the units prior to the auction and if you do not have the expertise, get a mechanic or engineer to view the units and service histories so you know what you buying.
Understand the costs:
Do some research to understand the value of the unit you are looking to bid on. Take a look at market value of the unit as well as take a look at the units that are on offer at the same time as the auction. a different auctioneer might have a similar unit.
You bid on an auction ex vat and commission. Therefore prior to the auction make sure you understand the full price on your bid price so that you are not shocked when you are invoiced the full price.
Location of the units – check the costs of transporting the units to your yard. Remember to factor in this cost to your bid price.
If you need financing from a bank, get pre-approval prior to the auction. Payment of the unit usually needs to be paid within 24 hours of the auction close, so make sure you have the money to pay. If payment isn’t made, you will forfeit your deposit.
Buying used machines does not need to be a gamble. Knowing the seller and knowing the condition of the machines means auctions give you the opportunity to buy what you looking for at a good price.
WBHO is running a bumper de-fleet auction. Stock includes: including CAT Excavators, Graders, Wheel Loaders & Water Tanks. Merc Tippers, Ategos & Crane Trucks, Batch Plant & More. Take a look at their auction here