Buying Used Equipment

Monday, August 19, 2013

American Laundry News

Questions To Ask When Buying Used Equipment

With the state of the economy in question, many are looking at used and rebuilt equipment for their laundries. But like purchasing a used car, the buyer must perform the due diligence to ensure the savings they seek.

There really are three types of “used” equipment categories one may consider when looking at deciding on a piece of equipment not purchased new from the original equipment manufacturer (OEM).  There are the truly “used” equipment items that are typically purchased as is. Second, there is the equipment purchased from a third party and then “rebuilt”.  Last, there is the equipment purchased from the OEM that is rebuilt to the OEM specifications. 

Using the analogy of purchasing a used car, buying an “as is” piece of equipment equates to purchasing that car from another car owner.  This presents the most risk, and requires the most diligence on the buyer’s part. 

Here are some important questions a buyer in this situation should try to answer:

 How many hours of actual runtime does the machine have on it and/or what year was it manufactured?

  • If the machine has more than 30,000 – 50,000 hours, it is generally approaching the end of its useful life without going through a complete rebuild.

Was the machine purchased new, and why is it being sold?

  • This is why a thorough inspection is important.  Structural issues, evidence of poor maintenance or functional problems present “buyer beware” signals.

 Is the machine running now, and can it be inspected?

  • If the machine isn’t running or the seller declines to allow a prospective buyer to inspect it, there’s cause for concern.

Has the machine been maintained during its life, and are there records to support this?

  • No record of preventative maintenance presents a red flag.

Are parts still available for the machine from the OEM or another source?

  • An inability to source replacement parts, especially control parts for upgrade or retrofit, is another red flag.

 Does the machine carry any certifications (i.e., UL, CSA, ETL) and will they still be valid if the machine is purchased and relocated?

  • Depending on the machine type, certifications may be mandatory by the local municipality in order to run the machine.  Most certifications end when the machine is moved to a new location, and obtaining new certification may be impossible. 

 When looking at a third-party rebuild, here are some questions to ask:

 Does the rebuilder have references on other like equipment that one can check on?

  •  No references could mean poor workmanship, and the machine may have been repainted but not rebuilt.

Does the rebuilder tear the machine down completely and inspect for and replace/repair structural damage? 

  • If the answer is no, or one gets a “yes” but no proof, buyer beware.

Are components and controls upgraded to the latest available?

  • If not, can one obtain parts for what the rebuilder is selling on the machine?  If not, buyer beware.

Does the rebuilder provide a warranty on the rebuilt machine and the components?

  • No warranty puts a prospective buyer back in the “as is” scenario.  If the rebuilder does offer a warranty, qualify what is covered.

 What certifications will a buyer need to allow for operation in his/her plant/municipality?

  • According to CSA and ETL certifying agencies, no rebuilder other than the OEM can recertify a machine to CSA, UL, ETL or similar standards.

Finally, when considering purchasing a rebuilt machine from the OEM, here are some questions to ask:

Does the OEM have references on other like equipment?

  • If the OEM can’t provide references on similar-type rebuilds, this presents a red flag.

Was the machine completely torn down and inspected for structural issues and repaired as necessary?  Does the OEM provide a warranty on the rebuilt machine?

  • If it was not completely torn down and repaired as necessary, then there is a good chance that the warranty, if any, will be limited.

Were all the controls and components upgraded to the latest available?

  • If the components and controls weren’t upgraded, is there a path through either the OEM or another party to obtain replacement parts in the future?  If not, there’s cause for concern.

What certifications does a buyer need to allow for operation in their plant/municipality?  Does the OEM recertify the rebuilt machine to the latest standards?

  • Again, according to CSA and ETL, OEMs are the only ones that can recertify a machine to the latest standards.  To do so, however, means replacing all components and controls so the machine meets standards.  If it doesn’t come with certifications, what’s the reason?

Which purchasing scenario is best comes down to the buyer’s budget.

Typically, a machine built by a third party or OEM is gong to cost more than one bought from an owner.   Also, buying a truly rebuilt machine as opposed to an “as is” machine may lend more confidence to depreciating the asset as one would a new machine.

Take time to do the homework and make sure a bargain is truly a bargain.

                                                                                                                                                         ALN                                                                           

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