The primary reason to buy used versus new equipment is money. You will save money when you buy good quality, used equipment. But, there is an additional bonus when you buy used equipment, particularly before the end of the year – your business will have the opportunity to rapidly write off the value of the equipment.
The benefits of buying used equipment include:
- Resale Value: Used equipment generally holds its value longer than new equipment, which has a 20 to 40 percent decrease in value in the first two years of ownership. Depending on the used equipment’s condition, maintenance and hours, you may recoup a large percentage of your initial investment if you sell the used equipment within several years after its purchase.
- Operability: Equipment technology remains relatively stable from year to year, providing you with an opportunity to continue using and maintaining the recently purchased used equipment for several years. Thus, the parts used to maintain the used equipment are the same as a late-model unit, but with a lower initial acquisition cost.
- Tax Depreciation: Under IRS Code Section 179, used equipment purchased before Dec. 31 can be completely depreciated up to $500,000 in value. This means that if you purchase three used pieces of equipment with a total value of $500,000, you can depreciate the value of their purchase in 2016. Depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property. It is an annual allowance for the wear and tear, deterioration, or obsolescence of the property. You should consult your tax advisor before making a large purchase and determine how it fits into your business operations.
To follow is a checklist that should be followed when buying used equipment:
- Check operating hours
- Inspect the fluids: Coolant, transmission fluid, engine oil and hydraulic fluid.
- Inspect for evidence of wear, such as cracks in the steel, signs of rust or decay and evidence of repairs.
- Try it before you buy it.
- Inspect the cab to make sure the controls work, the seat is adjustable, the steering works, and it is clean.
Neff Rental offers used equipment for sale throughout the year. Neff Rental equipment is maintained to factory standards and complies with manufacturers’ warranty requirements. For more information about Neff Rental used equipment, visit www.NeffRental.com/equipment/used/ or call 888-709-NEFF.
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