Overcoming False Assumptions in Used Forklift Purchases
For to many supply chain professionals, purchasing used warehouse equipment is akin to walking through a minefield, hidden dangers are all abound, seemingly unavoidable no matter where we step. Depending on who you talk to, second-hand equipment transactions can have a bad or worse reputation, on account of many harrowing misconceptions that have morphed into engrained myths over time.
For example, many folks may automatically perceive used forklifts as being unsafe or costly to maintain. This is certainly valid in some cases, but is it the norm? Not at all. Truth is, purchasing used equipment can be just as secure and fruitful as purchasing new equipment (if not more so, given the opportunity to save a fair chunk of change). As with any secondary market, negative experiences gain more attention and can lead to rampant hearsay that drowns out all the positive experiences that occur every day. To turn down the dial on the negative and amplify the positive, let’s identify and dispel the common misconceptions involved in purchasing used warehouse forklifts.
The Most Common Misconceptions about Purchasing Used Forklifts
From our experience in industrial material handling equipment sales, here are the top used forklift myths we routinely encounter, accompanied by their less dramatic truths:
- Used Forklifts are Hiding Abuse and Damage – many buyers can’t help but believe that used forklifts have universally been run into the ground, and are only being sold to stick the new owner with a looming repair or failure that the prior owner knows is imminent. In reality, most used forklift sales are financial or capital asset decisions driven by depreciation, maximum aging limits, and required technology upgrades.
- Dealerships are Always More Expensive – just like with used automobiles, forklift dealerships are widely perceived to be more expensive than private sellers. It is true that many dealers will publish a higher starting price, but this is because they have invested repairs, maintenance, reconditioning, and short-term warranty coverage into the deal that private sellers cannot provide. Quite often, buyers can negotiate the benefits desired in a deal and reach a value proposition competitive with (if not better than) private sellers.
- Used Equipment has no Factory Support – many used forklift buyers believe that factory support cannot transfer to secondary owners because this is the case with automobiles, but this isn’t necessarily true. In fact, forklift OEMs and local dealers offer many long-term coverage options including transferring remaining original warranty coverage to the new owner, adding extended warranty coverage, one-time complete reconditioning at time of used sale, and indefinite dealer-service contracts after factory coverage expires.
- Used Lifts are Always Inferior to New Lifts – this statement may be valid from a relative technological standpoint, in that new lifts generally offer newer features than older lifts. However, most buyers are not purchasing used lifts to obtain cutting-edge technology, but are instead solving performance and volume constraints in their current operations. To this end, new lifts are not always better, as used lifts offer a lower cost, readily available path to solving immediate business goals.
- Used Lifts Cannot be (Competitively) Financed – there was a time when used industrial equipment was not easily or cheaply financed, and that buying new was the only route to financing a forklift without dipping into high-rate business loans. Nowadays, used lifts can be financed, leased, rented, and co-owned using a myriad of modern financial instruments, many at or near new equipment rates. Even better, such financing options are offered by first-tier commercial lending institutions that practically all buyers can access.
- Used Lifts are More Costly to Maintain – this misconception is tricky. Many buyers have the perception that used lifts will inherently cost them more to maintain because of an unspoken assumption that previous owners took worse care of their lifts than they would have. This introduces two components – age and quality of care. It is true that older lifts cost more to maintain than newer lifts (as a function of age), but it is not inherently true that a second-hand lift costs more to maintain than a first-hand lift of the same age (as a function of quality of care).
- Used Lifts Offer No Tax Advantages – used industrial equipment has historically offered limited tax incentives, leading many buyers to favor new equipment for tax purposes. However, these days have long past, as today there are multiple beneficial avenues available under IRS Tax Deductions code Section 179. Specifically, used forklifts that are “new to the business” can earn tax deductions just like new lifts, including potential bonus deduction options.
Ways to Avoid Myth Traps when Buying Used Forklifts
Now that we’ve laid out the most common myths surrounding used forklift purchases, we’re faced with an obvious question: how can prospective buyers truly break free of these misconceptions and ensure that they are entering into a sound used forklift transaction? It all comes down to performing exhaustive due diligence that includes:
- Perform Ample Research – buyers must be educated when evaluating used forklifts, which can only start with thorough research. Look up market values, lift features, engineering criteria, seller profiles, and OEM reputations at minimum. Overall, your goal with research is to make sure that you have enough information to gauge if a used lift will provide the value you require, without being influenced by idle opinions or misrepresented facts.
- Conduct an In-Person Assessment – always perform an in-person assessment of a used forklift to gain a hands-on impression of the lift’s true condition. Even better, bring a trusted mechanic or dealer representative along to get direct expert feedback. If the seller will allow it, this visit should include some level of physical evaluation – a test drive and walk-around at the least, if not a multi-point mechanical inspection.
- Obtain Service History – buyers should always request and review a lift’s complete service history, which must include both routine maintenance and major repairs. Look for indications that service was performed on the manufacturer’s prescribed cadence (both by hours and dates), that OEM or equivalent spare parts were used, and that there were no repeat issues that may indicate a larger problem.
- Obtain Operational Information – understanding how and where a lift has been operated can provide considerable insight into how the lift will perform into the future. This insight can be obtained from operating logs (EG, the OSHA pre-shift inspection log) and from inquiring about its working environment. Such info can illuminate concerns such as if the lift was run hard over long days, exposed to aggressive weather or environmental conditions, if there were long delays between reported issues and service rounds, and of any nuisance issues that didn’t make it to the maintenance log.
- Review Original Purchase Documents – buyers should ask to review original purchase documentation specifically regarding warranty and factory configuration details. Doing so will provide you with awareness of any remaining factory warranty coverage available, as well as of any modifications made to the lift or its components since purchase. At a minimum, this will confirm the lift’s technical specifications against your expectations and needs.