When it comes time to invest in new equipment for your business, one of the first questions you’ll encounter is whether to buy new or used. Both options have their own sets of advantages and disadvantages to weigh.

Here’s an overview of the major pros and cons of buying new versus used equipment.

New Equipment

New equipment and machinery, such as those available at Lisman Forklifts, is an expensive investment, but in some cases, it’s one that will pay off.

Pros:

• Latest features and technology. New models often have improved capabilities, connectivity, efficiency, or user interfaces. This can translate to better performance and productivity over older equipment models.
• Warranties and service plans. Most new equipment comes with some type of included warranty or the option to purchase an extended service plan. This provides peace of mind and financial protection.
• Although not always the case, new equipment has usually been subjected to less wear-and-tear and improper maintenance than used items. So, it may have a lower risk of breaking down or needing repairs.

Cons:

• Higher upfront costs. New equipment is almost always more expensive to purchase than the same item used. You take on more immediate financial risk.
• Popular new products often have waiting lists or limited supplies, even months after their release. Less flexibility if you need something immediately.

Used Equipment

If buying new seems like too much of a financial outlay, it’s good to know there are plenty of options for purchasing new machinery and equipment, such as used pallet trucks or second-hand vans.

Pros:

• Significant cost savings. Used equipment sells at a fraction of the cost of new. Even used items in great shape can be 50-80% less than new.
• Value depreciation has levelled off. Unlike new items that lose value quickly, used equipment has already taken most of its depreciation hit. Its price is unlikely to drop much further.
• Environmentally friendly. By utilising quality used equipment that still has a good life left, you reduce waste and resource use in manufacturing new products to replace them.

Cons:

• No included warranty. Most used equipment is sold “as is” unless you pay more for a third-party warranty. There is a higher financial risk if repairs are needed.
• Past wear and issues unknown. It’s often impossible to know how gently or roughly used equipment was operated and maintained. Be aware of the risk of latent damage or issues.
• Fewer leading-edge features. Used equipment likely has older or outdated capabilities and technologies compared to just-released models. Less future-proof.

As you can see, there are good arguments to be made for both buying new and buying used. A lot depends on your budget, how soon you need the equipment, your appetite for risk, and how much value you place on warranties or the latest features versus saving money.

Analyse both the pros and cons before deciding between new and used for your next equipment purchase. Speak to your business accountant for a more in-depth look at the financial considerations, as there may be tax incentives to buying new rather than used. And if neither option works, look at renting what you need when you need it.