I've sold for dealerships for 10+ years before recently going out on my own equipment brokering with a buddy. He had sold and bought some things prior, many times with me consulting him. My first sales manager, and still good buddy, worked for a Deere dealer for 15yrs, did his own thing for 14yrs, and then was sales manager for the Case dealer we worked at for 12+ yrs. He's the most skeptical person in the world at this point. : ) Between my experiences and his I can keep you from ever buying anything. : )
Here are some of my thoughts...take them for what it's worth. I know that contractors know their equipment and you know how to use it. But just like I understand the basics of construction I'm not about to go bid a pipeline job or a dirt job tomorrow because I don't know all the problems that only working in that world every day teaches you.
A. Gov agencies are just as big of liars and nothing is guaranteed as far them taking any better or worse care of things than any other contractor.
- My WORST tractor was a Gov agency Cat mini that was a 900 hour POS. It had never in 8 yrs had oil or air filter changed.
- Recent skid loader had blow by & 2 flat tires when it showed up despite a call to the fleet mgr assuring the machine was nice, clean & ready to work with 40% tires.
- A crack sealer we bought was 'missing' the hose & gun...$2500 worth the parts as they're heated & not readily available from outside sources. : (
- Worst of all most get suckered into over paying for Gov machines with this false idea they are premium machines.
B. There are a lot of not so good folks working in the equipment market. Due to lack of title and high values the market is ripe for fraud.
- Even if you get the machine & it's ok....without doing a lien check you may be buying it twice. Making sure the machine is free & clear isn't something most buyers do...but should do every time.
http://www.ner.net/ironcheck.html My old boss' wholesale buddy bought a D8 from a guy in person after inspection. When they went to pick it up owner stopped them & asked what the hell they were doing. He had 'bought' the D8 from the owners deadbeat, drug addict nephew who lived in the shack next to his biz.
- We've gotten stolen cashiers checks...as in real cashiers checks that were stolen from a bank & made out for purchase.
- We've had a 'buyer' that went through all the right motions on a 5 yard loader for over 30 days...wanting more pics and video...trucking cost...and then invoice for his bank. ONLY to have him take the logo off the invoice and use the wire routing # to make his own checks. Lucky for us we had a 'catch account' with another number that only had a $1 in it to catch wires. I know a Deere dealer that lost hundreds of thousands in this same deal.
- My old boss bought 3 stolen backhoes out of CA. He was suspicious of the deal and called every agency out there to check. None were stolen. The guy took the pics on the job and stole them AFTER he bought them.
- I've got 20 more stories too....
C. You know brands, you don't always know tractors. You know your tractors, people who do what I do know what you know about your tractors and everyone else they deal with's tractors. Give me a mfg and I'll tell you tractors you should NEVER own that they made. I can probably tell you many of the issues with those models and what to look for...and if I don't know I've got 50 people that do what I do I can call to ask.
D. You know who to call for diesel, pipe, materials, and everything else to do a job. I know enough people in the equipment world to know if I trust them or not...and if I don't know them personally I know enough people in this world to call to see if a guy is a lying scumbag. I'll be honest, I've got a few guys I thought were ok only to find out they've done some shitty deals. I check EVERYONE & I'll still ask about people I know if I don't know them all that well.
E. Auctions. IMHO they're all suspect, the smaller they are typically the shadier. Keep in mind, even large 'reputable' auctions like RB aren't looking out of buyers. They'll sell anything regardless of condition. So never assume it's not a POS just because it's at auction.
- In my world auctions only serve one purpose....to ensure that you never have to meet the buyer. As my old boss said 'if you bought a tractor from me at an auction...you got f'd'. His other saying was 'auctions are a great way to learn the value of a dealership'. Keep that in mind.
Final thoughts...
- Without doing background checks hour meters are suspect. I've got contacts with every manufacturer or one of their dealers that let me find out what warranty / work was done to a machine and what hours were on it at those dates. Just did it for a customer on a large Cat loader for a customer. Hours seemed low for the year, but my cat contact showed work done on it 6 moths ago and the #'s match. I was able to find out a Deere 544J had 6k hours...not the 18k that the machine was showing. I could also
find ownership history. Honestly, even a lot of the people in my world don't have those contacts. The 544J is owned by another wholesaler who couldn't get answers from Deere...and he's been doing this for 30 years.
- It's what you don't know that'll kill you. Don't assume what things will cost to fix. Don't assume that something is a good deal without checking first. "One of those must cost way more than that! I should buy this one!" WRONG. : )
- Please don't try to be equipment flippers. I'm so tiered of seeing customers over pay for stupid **** then calling me 'You've got to help get me out of this tractor'. There is a reason it was so cheap. No...no one wants a Terex. No, even I can't get decent money for a 2wd backhoe. Yea, that's because a transmission is $45k. No, you can't get a rebuilt motor for $6k anymore. No, you don't want to know what it's really worth.
- You have accountants, lawyers, engineers, and other professionals that help you with your business. FIND A TRUSTED BUYER / AGENT to help you buy equipment. Even new stuff...right now there are some major price differences out there. Depending on your sales rep and dealership you could be talking tens of thousands of dollars. There are also new tractors that you don't want to own.