Buying New Equipment

Hey folks, been a while since I've posted. I come to y'all with some questions about buying equipment.

My dad is a builder/developer/landlord (my brother and I work for him) and with the economy starting to take off again we are considering purchasing our own equipment to do our site work. I am working on getting my septic license and got my Class A. I have an old D6 a friend and I bought in the fall that will probably see regular use. We are looking to purchase a 160-210 ton size excavator with thumb and quick coupler and a tracked skid steer in the 70-80 hp range. A small dozer will probably come after a while. I have been doing my research and inquiring with friends and associates about different brands, dealer and aftermarket support, etc. I have started visiting local dealers and gathering info and quotes. The excavator, we may buy used, but most likely we will buy at least the skid new.

We have never purchased a new piece of heavy equipment, heck my D6 is my first piece of equipment. Is negotiating new equipment like negotiating for a new car? If it is, what percentage off the asking price is considered a good deal? Looking forward to hearing your thoughts

I think it would help if you were possibly buying 2 or more machines at the same time. Just make sure to get all your quotes in writing and a guarantee the machine will be there. Try to get a feel for the salesman/dealer. A guy that did some work on my land made a package deal on a used 850K dozer and low hour 210 excavator from a Case dealer. The excavator was at another branch and the dealer was supposed to bring it to the local branch so he could finalize the deal and pick it up. Everything was written up and all he had to do was make the final payment and take delivery. They hadn't hauled it for the agreed day so he inquired why it wasn't there. They assured him it was on the way. A couple more days still not there. Apparently some manager at the other branch thought the excavator was worth more and sold it out from under him to one of his customers. Pretty shady. Shop around and just like buying a truck, don't be afraid to walk away. Look for dealer reviews online too.

One thing to think about if you are in a medium to high production business is machine down time. What brand dealers are close to you and who stocks parts on hand. Who has a good service department. I have owned some not so popular brands in my area. If you have to wait a week or more for parts, it can really mess up a build schedule.
I don't really have a favorite brand of machine. I own a little of everything. Cat, Deere, Volvo, Hyundai, Bobcat. The one machine I would buy over and over again is a H or J series Deere dozer. I have had a 650H and a 700J and have loved both of them.

Buying new is all about financing and money games. The asking price is just that and only that. That number is flexible and can be negotiated down depending on your leverage and how hungry the sales rep is that you are dealing with. Leverage is the ability to force a price one way or the other depending on company age, size, financial stability and future prospects. A hungry sales rep is one who is paid on some kind of commission and hasn't made many if any sales for a specified time period. You can recognize them by how hard they try to push you or how many times they say yes to every outlandish suggestion you make.

If you want to make the best deal check out your financing strength before you go in. Generally a franchised dealership can do pretty well on getting you a package but check with other sources first. Play up your work load and abilities to the rep. Go to more than one manufacture of equipment and play that against all the sales reps you meet. Check out all sales and finance terms on your own without a sales rep or closing agent looking over your shoulder. Confirm all warranty terms that come with the sales contract and ask for clarification on everything that you don't understand.

The process is stressful but from the buyers side can probably be a little bit fun if a rep is very hungry they will likely whine and dine as part of the process of getting the sale. The sale side is more stressful because the potential sale can grow wings at any moment leaving a hopeful rep with an empty feeling that won't go away until a sale is made somewhere else. Use that leverage as best you can.

Good Luck!

do you have enough work to justify a new machine right out of the gate?
maybe a lightly used 1 from a dealer, that way if you don't like it you can sale or trade it for a different size or brand and you wont have a large payment to deal with or rent to own

Based on work I've done on them and part availability, I'd go with a Gehl RT250 skid. My boss owns 3 and they are tough as nails. Until you run a fence post through the radiator.

Mustang makes great skids as well though. I use a 1900r nearly daily. Very comfortable, though not tracked.

Thanks for the responses so far everyone. Keep them coming!

Catman, between our developments and rental properties we definitely have enough work for a new skid steer. We're open to our options in the excavator market and am keeping my eye out for a decent deal used or new.

Where we are in central-east CT we are lucky to have Cat, Bobcat, Komatsu/Kubota, Hyundai/Kubota/New Holland, Deere/Hitachi, and Volvo dealers within a 30-45 minute drive. The Cat dealer gave us a price on a new and used 259D and were supposed to give us one on a 318 but never heard back. Supposedly they aren't too receptive to small customers. Hyundai/Kubota gave us decent quotes on a HX160 and SVL75. Komatsu/Kubota dealer is setting up a demo for the 75 and working on quotes for a new PC170 and a PC160 out of the rental fleet.

I'll keep y'all updated.

Another question. On a new vehicle I've heard that 10% off asking price is a decent deal. Same apply to equipment?

There is a lot of room for negotiation on new equipment. Most start negotiating with 5% off before you start talking. If you have leverage 15% might be easy to get. You might be able to get that now being a new customer with a couple of years of work and growth potential. Start working the dealers against each other and I would say 10% below initial asking price should be a minimum.

I don’t know your cash flow.
But I bought my first new backhoe 40 yrs ago lease with option to buy 90% of my lease payment went toward my down payment if the agreed purchase price if I decided to buy