Used Equipment: Vetting Value

Bob Spears, who’s in machinery sales for Winston-Salem, N.C.-based Salem Stone, says that leasing companies are usually very good about having accurate paperwork, and someone buying used equipment that’s been repossessed as part of a lease is extremely likely to get something with a clear title.

That isn’t always the case, though.

“If the machine is being sold directly by Joe’s Granite, who knows know much Joe still owes on it and how many liens are on it,” Spears says. “Then you’d have to do the UCC search yourself.”

Leasing companies aren’t the only ones that can provide a reliable title, however. Bill O’Connor of St. Cloud, Minn.-based Granite Machine says buying from a reputable auction house should ensure that there’s proper UCC research.

“They have already done the legwork and can give you clear title because they’ve put a bond up,” he says. “If there’s a problem, they’re liable and you’re not.”

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Another option, although less fool-proof, is to request both a bill of sale and a transfer of ownership, a process which is recognized in at least some states, says Wayne Kruschke of Potter, Wis.-based Stone Equipment Service.

“You put it down on paper, including what you paid for it, the companies involved and the location,” he says. “Everybody signs it, and it’s a legal document, which should give you something to stand on – although, if you end up with a fight on your hands, the legal fees may be more than the machine is worth.

“Buyer Beware is the best you can do,” Kruschke adds.

KNOWLEDGE IS POWER

Assuming the machine’s title is clear and able to be sold, how do you end up getting a diamond in the rough rather than a pig in a poke? The more knowledge you can gather – by whatever means – the better the end result.

The ideal situation is one where the machine is still set up and powered up, and you can hire a knowledgeable technician to go in and do an inspection.

Even before that, Kruschke says it pays to make sure you know – if you’re looking at a foreign-made machine – who represents the manufacturer in this country, and if there’s someone available to work on the equipment.

“A lot of times you can get a machine for quite a deal, but you go to set it up and something breaks, and you’re waiting for weeks and weeks to get a part,” he says. “Do your legwork, so you know what’s available for support and who knows anything about the machine.”