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Should Contractors Buy New, Used or Refurbished Equipment?

Construction workers in red and blue helmets holding a level
Ask yourself: is this new piece of equipment necessary, or is there a more affordable option?

Staying competitive as a contractor can become difficult, especially when your budget is frequently stretched thin. From your first bid to the last day of work, you should always keep an eye on your bottom line.

So when it comes to deciding how to prepare for your projects – with new, used or refurbished equipment – you should consider several factors before you make a final decision.


Reasons to buy new equipment:


  • If owning your own equipment would make it easier to ensure it’s available when you need it, then it could be a good way to become more efficient and reliable as a contractor.
  • Is the piece of machinery new to the market? And if so, does it provide significant advantage over older, used models? Then buying new could be a good idea.
  • You want to present a polished, professional foot forward to clients and others that might see your company in action. New equipment sends a certain signal that you’re doing great.
  • Your budget is open to making big purchases like new equipment.
  • The cost of buying new is worth it, to trust that the equipment is going to be reliable and will operate without surprises.


Reasons to stick with used:

  • Tried and true, this piece of equipment is worth having but not buying new off the lot. If it’s a reliable workhorse that tends to drop in value, then look for it used.
  • You might be able to rent “used” equipment in order to try it out on a project and see if it’s something you could stand to add to your owned gear.
  • Single-duty equipment (items that can’t be used across multiple projects or for many different activities) can be costly to buy new.
  • Your budget is squeezed or you’re not sure exactly which tools to invest in.


Reasons to use refurbished gear:

  • You have a great team of trusted refurbished retailers you can tap who guarantee the quality of their work.
  • You know the standards of quality that the refurbishing centers are using to work on the equipment, and they are brand-certified centers.
  • You are willing to take on extra time, in the case of back ordered or difficult-to-obtain parts for refurbished machines and equipment.
  • Your operators are more comfortable using their old equipment, so refurbishing something they’re already trained on will save you the learning curve that could slow down using a new or used piece that’s new to them.


Other factors to consider:


  • Bidding: Does owning your equipment make you more competitive when it comes to bidding out a project? If you’re losing jobs only because of this issue, you may want to consider owning, rather than other options like renting.
  • Location: Having equipment onsite and ready to go at a moment’s notice can help you, especially when projects are far from suppliers. The location of your project might dictate your particular need month-to-month and year-to-year.
  • Taxes: Talk to your accountant about how you can utilize the cost of buying new equipment come tax time. Some costs can be passed on to your employer, while others must be included on your own tax return. “Rental expenses can be billed back to the customer or deducted annually as a business expense. Buying a piece of equipment, however, is a capital expense that must be treated as such at tax time,” according to John Leisner at Construction Business Owner.
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