For almost all earthmoving contractors, no matter how big or small, purchasing the right machinery to fill out one’s fleet is as important a skill as any and can impact the business’s bottom line as well as its future value significantly.

In many cases one of the key decisions that need to be made is do I go NEW or USED when investing in additional plant?

There are pros and cons for each. New vehicles, for example, come in pristine condition and with attractive warranties but have the price tag to match. Likewise, buying a piece of equipment in used condition can offer a huge saving due to the depreciation that’s already taken place, however there are risks in the form of problems and quirks with the gear.

Taking appropriate precautionary steps when deciding on which way to go will give you the best chance of winning the gamble the used equipment market can throw at you.

Here are our tips for getting a good deal when you make your next second-hand equipment investment:


The biggest unknown when it comes to purchasing used equipment is its history. You might be unsure whether it’s been treated well, maintained regularly, or if it’s been in an accident that has affected its primary functions.
The first thing to check is the equipment’s operating hours or kilometres and ascertain if it is nearing its usage life span.

However, a vehicle with low operating hours or kilometres that hasn’t been well maintained may not be a better buy than one with higher usage that has been looked after properly. For that reason, it is important to ask for log books and proof of service history that demonstrate the equipment has been properly maintained and is fully operational.

Another clue is in the machine’s fluids. Checking things like engine oil, transmission fluid, coolant and hydraulic fluid can be telling, particularly if there’s water or dirt in the fluids.


Get advice from those in the know – A little extra advice never hurt anyone so its always a good idea to get the opinion of someone who knows what they’re talking about. An obvious example is having a certified mechanic look over the machine to ensure you are completely aware of any potential future repairs. If there are minor issues this level of due diligence will provide greater ammunition to negotiate hard with the vendor and quite possibly save you thousands of dollars in the long run.


The biggest risk of buying used equipment is being sold up the river and receiving a dud from the seller. It is the single largest reason individuals steer away from second hand sales, they just don’t know what they are going to get.

Having an understanding of the vendor you are buying from is fairly important and the less you know the riskier the deal potentially is. Buying from a recognised supplier or machinery dealership certainly provides comfort as their reputation and previous dealings with the market are pretty easy to find out.

Purchasing with private sellers provides greater risk so try and do a little homework. Keep in mind that the vast majority of sellers will demand their payment upfront so there is always an element of trust involved so extra caution is not a bad idea.


If you generally finance your machinery then buying used equipment, particularly from private sellers adds a few complexities to the purchase.

All lenders have a restriction on the age of each asset type they are prepared to lend against, so it is something to be mindful of. There is generally a home for all assets but this may come at a cost as older equipment often incurs higher interest rates and establishment fees.

Due to the increased risks with private sales as noted above the finance companies put in place a few extra checks in their processes to ensure everyone is safe against a dodgy seller. These checks include asset inspections, supplier & bank account verification enquiries along with appropriate PPSR checks.

Using an experienced and well recognised asset finance broker such as Magnolia Lane to navigate through this process and find the correct lender suited to your specific purchase is certainly beneficial as all this due diligence is looked after saving you both time and worry.


Purchasing “sight unseen” is a dangerous caper, especially when buying from people you do not know. Purchasing equipment remotely has now become a lot easier via the internet with access to photos and service records for the equipment for example but there are many a story of this practice ending in disaster!

Nothing can replace climbing all over your proposed purchase and picking it apart in person before signing on the dotted line.


Although used equipment is openly accepted across all work sites some of the major contractors have been known to raise their eyebrows at gear that has some years on it and maybe looking a little tardy.

It is always worthwhile trying to forecast where a piece of equipment will be working and trying to determine if these sites have any rules regarding equipment specifications. Are there any safety & compliance rules that require certain features on the equipment that your used machine may not have?

As part of our role as a finance partner, we have facilitated hundreds of both used and new equipment purchases and know all the areas potentials buyers can get into trouble. If you are looking for a finance partner to speak to about your next equipment purchase Magnolia Lane Financial Services would love to speak to you. We pride ourselves on helping our clients grow and making the right equipment investment for their business. Please don’t hesitate to contact us on (02) 8287 3000 or email