Buying New Equipment

denick

What do you use as a measure to buy a brand new piece of equipment over $30,000.00

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Nick

"Every day I remind myself that my inner and outer life are based on the labors of other men, living and dead, and that I must exert myself in order to give in the same measure as I have received and am still receiving" Albert Einstein

Teetorbilt

The first job should pay for it even if you have to lower your profit margin a bit.

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You can't solve you're problems with the same level of thinking that created the problems.

Albert Einstein

PipeGuy

How 'bout expanding on that a little Teetor. Are you saying yu pay cash for everything?

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Fortunately I keep my feathers numbered for...for just such an emergency. -Foghorn Leghorn

dayexco

man, i'm doing something wrong here. don't think i've ever paid for piece of major equipment on one job. in fact, i know i haven't

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someday, i'll be as patient as Nick.

Teetorbilt

I do pay cash for everything. The deposit will cover the price of purchasing the equip. The object is to break even or even make a small profit on the investment.

A mentor taught me this.

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You can't solve you're problems with the same level of thinking that created the problems.

Albert Einstein

Gmads

Depends on the reason we are aquiring new/more equipment and the dollar value in question. Generally, if we are buying equipment it is either because we see a sustained increase in our volume of work, or because we are swapping out an older piece. In the first case, the dollar value of the piece becomes more of an issue. For example, if we were looking at a 30-40 ton excavator, we would look for a low hour used piece of equipment that has taken a depreciation hit vs. new. If we were looking at a plain-jane rubber tired backhoe we would probably buy new (especially if the manufacturer is offering 0% as they've been lately).

If we are swapping out older equipment we prefer to buy new (and again it helps that the manufacturers have been offering 0%). We've found that the trade-in that we get from dealers is higher than the after tax amount from selling a piece ourselves. Plus the trade-in reduces the sales tax which here in Texas is about 10.5% after everyone gets their share. Also, with new equipment, the dealer has room to sweeten the deal w/extended warranties, free/discounted service contracts, etc... that help make that decision.

Last note - I can't imagine paying cash for anything over $30K with the way lenders have been giving away their money the last few years.

jmic

I'd be willing to bet you wouldn't be singing that same tune after I gave you a quote to do work for you, I mean c'mon we're not talking circular saws here.

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___"Remember You Never Get A Second Chance To Make A First Impression"______________________
Joe

rino1494

haha, yeah.......I doubt that a 1,000' sewer job will pay for a $200,000 excavator.

When buying brand new machines, we base it on how much it will get used. No sense on making a $2,000 a month payment for something that will get used 20hrs a month.

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