Used Equipment: Vetting Value
Now, meet the new dealers on the street: the repo man and online sales.
While traditional sources for used equipment remain strong – at least according to some in the industry – the recent economy also brought in machines from repossessions, foreclosures and bankruptcies. Technology also provided new sales outlets, including eBay®, Craigslist and online auctions.
The end result is a marketplace where equipment buyers can save a bundle or lose their shirts, depending on what they’re buying and how they approach the sale. It’s definitely a case of caveat emptor, but buyers doing their homework have a better chance of winding up in the black.
SAFE FILING
The nice thing about buying new equipment – besides that it’s, well, new – are all the things included, such as warranties, documentation and operating software.
Buy a used machine from some of these sources, and it could come with nothing. It might not run, and the seller might not even have clear title to sell it.
“The first thing you need to do is make sure there’s a clear title,” says John Kremer, installation coordinator with St. Cloud, Minn.-based Park Industries. “Somebody may own that equipment other than the person who’s trying to sell it. If a bank leased that piece of equipment, it owns the equipment, and not the person using it.”
Fortunately, there are a couple of ways to attempt to learn the true ownership of a machine. One, says Jeff Walerius, Park’s sales support manager, is to contact the equipment manufacturer directly. Another is to check if there’s a UCC filing on it.
UCC refers to the Uniform Commercial Code, a harmonized set of laws governing sales that the 50 states subscribe to in the interests of fostering commerce. One of the things the UCC provides is a financing statement that can be filed with a state or local jurisdiction, showing the names and addresses of the parties involved, along with a description of the collateral.
(Finding a UCC filing, however, isn’t necessarily a simple point-and-click Internet search. Individual states dictate how the documents are recorded, so finding the filing may take some time at the local courthouse.)