Auction equipment.................discuss.

Well, I think most here know how I feel about it! LOL

It would probably be a good idea to post some pointers for those that just cant resist the appeal of auction equipment. I have a lot of customers that ask me constantly about these machines, some listen and some don't. Those that don't are calling me as soon as the auction machine hits their yard because something has already failed, or is not working properly. I see a TON of threads here that mention a machine that was purchased at an auction, and know that customer feels like they got screwed. I had someone just last week call me about a motor grader they had bought at an auction 4 months ago, and it hasn't run 2 hours since. Nice looking machine for sure, but has major electrical issues keeping it shut down.

So, here is a few things I know and have learned about auction equipment. Please add your .02 and just maybe...……..someone may learn something.

1. Know what you are looking and have some experience with that machine. If your looking for a dozer, at least know how it works and know the basics of checking it out. If you buy something you know nothing about, your just ASKING for it.
2. Don't buy into inspection reports being accurate. Let me tell you how that inspection report came about.
A. The guy inspecting the machine knows how to do 2 things...…..1. start the machine and 2. pull levers. He walks around the machine and may make notes of leaks that are leaving a pond on the ground. He starts the machine then starts pulling levers or moving shift levers and such. If the machine has ANY reaction to said lever pulling, then it is noted as working, whether it works like it should or not.
B. Don't be fooled in how a machine may look (visually). Too many times machines are cleaned up, repainted and decaled, or even sheet metal replaced because auctions KNOW that is what will sell a machine quick. Just because it looks really nice doesn't mean it will operate that way for you.
C. If you are not allowed to actually check the equipment out or run it....PASS! Usually there is a major fault hiding in the shadows.
D. Don't fool yourself thinking the machine looks good and the engine starts right up and sounds wonderful! The engine is only 15% of the operating systems of that equipment on average. It says NOTHING about the electrical, hydraulic, and the rest of the powertrain.
E. If there is a "BUY NOW" price on a machine, is it more than likely a wreck. Most auction places know there is a MAJOR problem and they don't want the machine breaking down during the auction. If they throw a cheap buy now price on it, there is always some sucker that thinks he is stealing it, only to be miserable afterwards.
F. Inspect the equipment YOURSELF. Don't rely On your buddy that only knows lawnmowers. If you have no one, then HIRE someone that does know, it will save you in the long run. Its your money, spend it wisely.

Is there always a diamond in the rough...…….rarely, but it does happen. Auctions I compare to pulling the lever on a slot machine...…….90% of the time, YOUR A LOSER. If you don't do your homework and buy sight unseen (like a lot I know do) then you are just bending yourself over a barrel and trying to hand lube to everyone that passes by.

Please add your advise or experiences!

For certain much of what I see at RB auctions and other auction yards is basic junk iron with a spray can overhaul. I do find that some of the more obscure attachments and parts can be a decent deal if you know what you are getting into. For example I got a decent trench bucket for the excavator at way less than I found anywhere. It is used but gets limited work and with a little hard face will last for all I ever need.

Auctions of actual companies at their yard/business can be very good. Liquidation auctions often have many good deals. Much of our major shop equipment came this way.

People also forget how much the buyers premium can add to cost.

Then they see sticker shock when a lowboy runs $300 per hour with a 4 hour min.

It all really comes down to knowing what you are looking at and what you have the ability to fix or put up with.

We have purchased a fair amount at auction. Overall i have had pretty good luck. We always inspect the equipment and set a price that we will not go higher. I bought 1 machine for 13k about 6 years ago. It alone has made more than 1 million and the lifetime maintenance has been about 15k total.
Dont get me wrong we have gotten some gems. Mostly didnt inspect and they went cheap enough...
If the price is right and its not a front line machine...

Well said man. When I used to manage an excavating fleet I’d cringe when something showed up with an auction sticker on it....

I always felt that much of the equipment being sold at an auction were from companies that were going out of business and that the first thing cut back on when a company is starting to loose money is maintenance.

And like I said in another thread on auction equipment the so called "inspectors" hardly ever do much more that noting it started and ran and he didn't need hipboots to wade through the oil around the machine. And just remember the company knows when the inspector is going to show up so machine probably was started and run shortly before he got there and the cans of either were tossed in dumpster.

Assuming he has the discipline to evaluate machinery and pay no more than it's worth or leave without buying, a guy with a lot of spare time and smarts can find decent deals at auctions sometimes. It's a pastime for old retired mechanics and operators. A guy with a business to run usually doesn't have time to travel to all the auctions, spending countless hours going to auctions and leaving disgusted. You can spend a lot of time spinning your wheels. I know a guy who buys and sells equipment for a living and he buys most of the equipment at auctions, but most of the profit goes to the auctioneers and transport.
The problem is that people get sucked into the excitement and confusion, and Ritchie goes out of their way to generate confusion.

I worked for an outfit that would only buy used equipment. Lots of auction stuff in the fleet.
When they bought at the auction, they would always buy with the assumption that it was a wreck. They had a big shop FULL of tradesmen.

The wrecks would come in to the shop and we would have at them.

Most needed lots of work, some not so much.

They bought three Deere 450D excavators at one auction. The idea was to have one decent runner, hopefully the second one could be a pit machine and the 3rd would be a parts machine. The first 2 were in fairly decent shape, were able to get them out working with fairly minor work. The third one that was supposed to be the parts machine, the owner of the company decided that he wanted it running too. This one took considerably more but it went out the door too.

Like I said, big shop, lots of people in it.

Auctions are a crap shoot. You pays your moneys, you takes your chances.
If you haven't got the time, resources and skills to resurrect the dead, best plan on skipping.

My $0.02.

I think the most important thing is to have someone knowledgeable inspect the equipment. The RB site here (Nisku) is one of the largest and can run the full gamut from scrap to brand new. Sometimes owners retire or a big operation sells off equipment after a large job is completed. The smart sellers will have the complete service history/other info available and it is listed in the auction catalogue to check at the office. That's a good way to bring a higher price and demonstrate how the machine was cared for. There was a company owner that decided to retire due to the poor economy. He sold all the equipment but had complete service records and receipts for all parts and repairs bought including tires for the dump trucks. A couple dump trucks were older and didn't sell for much more than the cost of repairs. If I recall one had a 3406B with odd suspension and sold for under $3000. It was Neway or Reyco, can't remember but it ran great and the engine was really clean. I thought someone might have paid more just for the engine.

Many moons ago a large site/road contractor in Flint closed, RB did the auction. 99% of the equipment was cat.
FWIW, it was CJ Rodgers.

I went to look at a Bobcat, long before the scheduled inspection times, just walked into the yard like I owned the place, lol...

Holy crap, what an eye opener.

EVERY machine got the "treatment". Blasted, painted, decaled, fluids changed, new seat and dozers got an undercarrage.

100% cosmetic, no repairs.

I found the Bobcat, poor thing looked like they used it for a cushion between 2 scrapers.

Ed

I always assume that if equipment is being sold at auction, there is something wrong with it, and I won’t buy It unless it’s a steal.

Even if it’s a liquidation or estate sale. Unless I personally knew the owner and the history of the machine, I’d plan on spending a whole lot less than what a reputable dealer would ask for the machine.

Some used equipment dealers have lots full of garbage that they picked up at auction.

I recently looked at a machine at one of these used equipment dealerships. They picked it up at an RB auction, and it looked good in the pictures with the spray-paint paint job. In person it looked like junk and it had a contaminated hydraulic system full of shavings.

Not something I want to end up with.

Everything has been way high at the recent auctions I’ve been to lately. From little stuff to big. Some stuff has sold for more than what you could buy new with warranty.

I will take exception on the comments about inspectors. I did Iron Planet inspections for awhile and the process was pretty time consuming and what they were asking for was what needed to be known. I've done a lot of inspections for other people as well and not had too many complaints about what was received. The problem for many is there is no such thing as Xray eyes so a certain amount of risk is always there on any auction.
I wouldn't say that an auction was any worse than buying used from any dealer. The auction people don't lie about what the piece is, they just don't say anything about it. I can't say the same about many dealer operations. The big truism is that an auction is not a place to go to buy your first piece.

John C. said:

I wouldn't say that an auction was any worse than buying used from any dealer.

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The only difference is that a small percentage of dealers value their reputation in hopes of getting repeat business. But most are focused on the "instant gratification" of making an immediate and profitable sale.
The ones I usually run into are into marketing talk. They tell me a machine or vehicle is "awesome" and "clean" none of which tells me anything.
Salesman: "This unit is really clean"
Me: "That doesn't matter to me, I have a pressure washer"
Salesman: "It runs out good."
Me: "Out of fuel or hydraulic?"
Then he starts in with all the questions:
Salesman: "What exactly are you hoping to find?"....."What price range are you thinking of?"...."You're not going to find a _____ at that price."
Me: "I didn't contact you for questions, I'm looking for answers."
Salesmen always seem to think they are bringing a lot to the table in exchange for their fee/commission. I'd rather avoid them and pocket the difference. I never liked them. They insult my intelligence so I verbally abuse them.

About 6 years ago, I had a Bidadoo rep call me about some electrical service trucks they had bought in Bartlesville. I have no idea how they got my name, but he wanted me to go there and write up an inspection report on 6 trucks and a Kubota tractor. I went up there for him and started on the tractor. It was a bit rough, and when started the engine oil pressure light stayed on. Moved to each truck and wrote up everything I could find, which on 3 of them was a pretty long list. When I turned in the report, I was asked to make estimates of repairs for each truck and the tractor which I did and turned in. He called me about a week later and said all he wanted was the trucks and tractor to start. Everything but 1 truck would start when I inspected them, the one that didn't needed batteries. I asked about the other issues and was told they were too expensive to repair. 1 truck wouldn't even move in gear, and another the hydraulic pump was spewing oil, and yet another the electrical was so hacked that nothing in the cab worked. I put batteries in the one truck so it would start and that was it.

I sent them a bill for my time and they paid it. They elected to not repair anything else.

John C. said:

I will take exception on the comments about inspectors. I did Iron Planet inspections for awhile and the process was pretty time consuming and what they were asking for was what needed to be known. I've done a lot of inspections for other people as well and not had too many complaints about what was received. The problem for many is there is no such thing as Xray eyes so a certain amount of risk is always there on any auction..

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John C, I have to apologize if I was too negative about the inspectors.

Anyone looking to purchase something from an auction really needs to read and understand the information that at least Iron Planet provides. It is spelled out pretty simple what is done on an inspection and what is not done. Also from what I see, at least with Iron Planet, there are two different levels of machines being offered. There are machines that have "Inspection Reports" and then there are machines with "IronClad Assurances". One would do well to read carefully what and how any of these machines have been inspected.

The Romans had a Latin phrase for it - "Caveat Emptor" - it means "buyer beware".

There are some very good salespeople too that will know which machines to consider and which to avoid. Lumping them all together as bad and deceitful is like saying all mechanics try to rip you off and do repairs that aren't necessary. Some have integrity and care about their reputation and their customers, some are greasy and you can't trust a word they say.

Some people prefer to sell at auction because they get their money and don't have the hassle of trying to sell their machines privately. It's no different than selling a vehicle. Two serious buyers to a dozen tire kickers, buyers negotiating a lower price without actually going to look at the item, multiple phone calls or texts back and forth at all times of the day, saying they'll come to look at a specific time and showing up 6 hours later or not at all, being told a price is firm and then trying to get a better deal, etc., etc. With several items for sale could make you want to pull your hair out.

Welder Dave said:

There are some very good salespeople too that will know which machines to consider and which to avoid. Lumping them all together as bad and deceitful is like saying all mechanics try to rip you off and do repairs that aren't necessary. Some have integrity and care about their reputation and their customers, some are greasy and you can't trust a word they say.

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I agree. I just never seem to encounter those.

Auctions are one way to avoid salesmen. Do you know why big box stores kicked off so successfully? People who were jaded by "may I help you?" hasslers could go and evaluate merchandise without someone talking them onto a corner.

The outfit I work for has bought several machines at Ritchie Bros with good results that I have done the inspections on. I got a copy of John C's book on inspecting used equipment and that has helped me to remember everything I need to check when 3 other people are trying to do the same thing on the same item. I recommend it. The worst piece of junk I wish I would have never recommended buying was a Cat 563 roller from an extremely reputable dealer and good salesman who I trusted.

JPV said:

The outfit I work for has bought several machines at Ritchie Bros with good results that I have done the inspections on. I got a copy of John C's book on inspecting used equipment and that has helped me to remember everything I need to check when 3 other people are trying to do the same thing on the same item. I recommend it.

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That is much of what I was trying to say. Having a detailed in-person inspection by someone who knows what to look for is very important.
Where the real problems come is someone who has never run or worked on a machine is tasked by themselves or a boss with picking out a machine.
"Gee I never sat in a D4 or any other dozer, but there is this auction five hours away next week, bet it would be handy on the farm. Hey I can bid online, sounds like a neat idea!"

I went to a few site auctions for Mississippi lime quarries, most of the time were Other quarries closing shop and much of the machinery run to destruction. Initially they seemed not too concerned buying the trash piles and running them out a little more, one old fleet of Euc haul trucks was so bad I had a full legal pad of faults besides the rest of the loaders and site maintenance machines, took six days in July heat (Three full weekends) to make the report sheets, others inspected crushers and conveyors. The auction went off, they did not win as bid to my warnings, another quarry mid state did buy it all they were out of business in three years with none of the purchased machinery ever used, SOME never moved. Scrappers cleaned up off them.

Been to a couple RB auctions, early on were not so bad, now its not so good. See a great deal of noted Krylon or DuPont overhauls, new rails or at least shoes on 40% rails or less than 10% support structure under those new rails, MULTIPLE wash carts blasting away removing built up sludge and debris, those machines they do not want to be seen shipped away.