Risks and Rewards Used excavator auctions have become a popular procurement option for many construction contractors and equipment owners. By utilizing auctions, buyers can potentially obtain used excavators at lower prices compared to traditional dealer purchases. However, auctions also come with additional risks that buyers should recognize.A main advantage of auctions is the potential for significant cost savings. With multiple bidders competing, prices can be driven lower than market rates.
Auctions also provide convenient access to a variety of late model used equipment from different sellers in one place. This allows buyers to find deals on equipment that meets their specifications.Additionally, auctions provide an efficient means for sellers to liquidate inventories quickly. Sellers can reach many interested buyers in a short period and convert assets to cash rapidly compared to other sales methods. This creates pricing incentives that benefit the buyer.Despite the advantages, risks exist when purchasing at auction. Bidders have limited ability to inspect equipment condition prior to bidding. It is also difficult to access maintenance records and operational history for the machines. This information asymmetry puts bidders at a disadvantage. Post-purchase surprises, such as undocumented damage or faulty components, are not uncommon. Repair costs can potentially erase any discounts received at the auction. Additionally, auction houses provide no warranty support. The risk is entirely on the buyer.In summary, used equipment auctions provide procurement opportunities with unique advantages but also substantial risks. Buyers should do their due diligence, set prudent limits on bidding, and have contingency plans for potential post-purchase repairs and rework. When utilized properly, auctions can be an efficient procurement method for used excavators.