From small excavators to large excavators, replacing equipment requires considering many factors, such as the cost of replacing the equipment, the downtime caused by it, and the potential benefits. The best plan for you depends on factors such as the nature of the equipment and your workflow.
Option 1: Refurbishing existing equipment
Our first plan is to help you repair your machine by replacing old parts with new ones. Refurbishment retains some parts (such as the frame) and replaces others (such as the powertrain). In the end, the machine is in like-new condition at a fraction of the cost of buying a new machine.
Equipment refurbishment can be as simple as replacing a poorly performing part or as thorough as disassembling the equipment to the frame and replacing all parts. At Hyunkook Machinery, we offer three levels of refurbishment services to meet different budgets and equipment conditions:
①. Certified Refurbishment: Certified Refurbishment is the highest level of refurbishment service, and we will disassemble the machine to the frame structure. We will replace all non-metallic parts to make the equipment look brand new. If your equipment is in good structure but has functional or performance issues, certified refurbishment may be a good choice for you.
②. Drivetrain Refurbishment: If your equipment is only experiencing drivetrain issues, certified refurbishment can replace it with a brand new drivetrain. This refurbishment service helps improve equipment performance without having to buy a brand new device.
③. Secondary Refurbishment: At this level, we thoroughly inspect your equipment to identify substandard parts. We will repair or replace these parts to restore your equipment to optimal condition.
While every machine performs differently, this option to replace equipment can extend its life.
Pros and Cons of Heavy Equipment Refurbishment
Heavy equipment refurbishment has many advantages, including:
①. Cost less than buying new equipment: The initial cost savings of refurbished equipment can be significant compared to buying a new or used machine, especially if you are on a budget.
②. Reliable components and services: Our experienced team tests refurbished equipment to ensure that it fully meets the manufacturer’s original specifications. Comprehensive refurbishment also helps ensure that components can work together smoothly for optimal performance.
③. Reduce future costs: Equipment refurbishment not only extends the life of the product, but also potentially reduces repair and operating costs, saving you money in the long run.
However, there is no perfect solution. If you rebuild your equipment, you need to consider the following disadvantages:
①. Longer downtime: Rebuilding requires your machine to stay in the workshop while it is completed, so there may be downtime in your workflow. Depending on the type of rebuild, the rebuild process can take a few weeks to a few months. One way to deal with downtime is to rent a replacement device during the rebuild to ensure that your work continues as planned.
②. Limited upgrade options: If you are not satisfied with the function of the equipment, rebuilding will not give you any new functions. You may be able to make some small upgrades, but more large-scale improvements may require purchasing new equipment. Old equipment may not be as easy to upgrade as new models.
If there are some parts in your equipment that are in good condition but not up to your standards, rebuilding is a great way to save money. It can help you extend the life of the machine while optimizing performance and avoiding high equipment costs.
Option 2: Buy a Brand New Machine
The second option is to buy a brand new machine. This is the option with the highest upfront cost, but it can give you some great benefits, such as warranties and service plans. New equipment gives you the peace of mind of previous maintenance and the widest selection of new technologies and designs, giving you a brand new experience.
Before buying new equipment, consider your future workflow. Since a new machine is the most important investment and has the longest lifespan, you want to make sure it is a machine that you can use for a long time. If you think you may replace the machine in a few years, such as upgrading to a larger machine, be prepared to sell it or consider the other two equipment replacement options.
Another factor to consider when buying a new machine is how you will maintain it. Buying a new machine can allow you to streamline costs through a Customer Value Agreement (CVA), which provides a more reliable and predictable way to control operating costs. We can provide ongoing services on a monthly or annual basis. Our CVA includes:
- Comprehensive maintenance and repair agreements for simple, comprehensive coverage
- Preventive maintenance based on manufacturer specifications and your needs
- Inspection programs to ensure continued efficient operation, including professional inspections
- Fluid analysis to identify abnormalities in oil, fuel, coolant and hydraulic fluid
- Product Link onboard analytics for real-time insights into usage and performance
If you’re unsure about whether to buy a piece of equipment, leasing can also help. Consider leasing a piece of equipment to see if you like it before you buy it.
Pros and Cons of Buying New Replacement Equipment
The advantages of new equipment are extensive:
①. Higher fuel efficiency and performance: New equipment features the latest fuel-saving designs and will not experience any wear and tear that could affect performance. You can rest assured that you’ll get the best results that meet manufacturer specifications.
②. New technology options: Construction technology is constantly evolving, and newer equipment offers redesigned features and interfaces. For example, telematics technology may not be found on older equipment. If you want to add this kind of connected functionality to your workflow, you may need to buy new or look for a newer used model. These upgrades can improve your work and give you a valuable competitive advantage.
③. Factory warranty: When you buy a new machine, you get a factory warranty that covers defects. This warranty is usually for one year after purchase, giving you more peace of mind. You can also purchase an extended warranty for more comprehensive protection.
④. Customer Value Agreement Option: A Customer Value Agreement (CVA) is a great option to control operating costs and make them more predictable.
⑤. The most durable option: Of all these equipment options, a new replacement device should have the longest lifespan, which is a good option if you want to avoid buying or repairing it again in the near future.
⑥. Clear repair history: Since you are the first owner of a new machine, you don’t have to worry about the previous owner not taking good care of it. The equipment is kept in a clean condition and should work properly as long as you maintain it.
⑦. Fewer repair needs: With brand new parts, you may not need to make any repairs for a while. If you have a low tolerance for interruptions or unexpected costs, buying new equipment can help you avoid frequent repair needs.
⑧. Potential tax advantages: To help small and medium-sized businesses grow, the federal government offers tax breaks for qualifying equipment purchases. You may be able to deduct part or all of the cost of purchasing a new device.
These advantages come with some disadvantages:
①. Initial equipment cost: The most significant disadvantage of new equipment is the cost, which is usually higher than used or refurbished equipment. However, you can usually get favorable financing options for new equipment. When determining the total cost of replacing equipment, remember to consider potential cost savings and benefits, such as increased efficiency or fewer repair needs.
②. Depreciation: Like new cars, new heavy equipment will depreciate immediately after purchase. If you plan to resell the equipment after you are done with it, depreciation will account for a larger proportion of the price than used equipment.
③. Potential delivery cycle: Not all new equipment you are interested in is available immediately. Some equipment is made to order and may take several months to be manufactured. If you need it delivered quickly, ask your sales representative at the time of purchase.
Option 3: Buying used equipment
The last option can help you get a replacement equipment without the cost of buying a brand new equipment or the time to wait for refurbishment. Buying used equipment is an excellent way to save money while getting some of the benefits of buying new equipment, such as exploring new features and saving money at tax time. If your replacement device is unexpected and you don’t have enough budget to buy a brand new device, then a used device is also a good choice.
Pros and Cons of Buying Used Replacement Devices
Used devices are ideal for buyers with limited budgets and clear performance requirements. Advantages of buying used devices include:
①. Functionality and technology are acceptable: Although you may not find the latest technology, used devices may still contain relatively advanced features. If you are upgrading an extremely old device, the difference can be significant. Even if you don’t need new technology, buying a used device can allow you to get a different device that better suits your needs.
②. Lower cost: Of course, buying a used device can save more upfront costs compared to a new device. Almost any budget can find equipment with the right age, condition, and function. In addition, used equipment has experienced the fastest depreciation period, so it retains its value better. Used equipment can also reduce your insurance premiums.
③. Quick availability: Most used equipment is available immediately. They don’t need to be manufactured or refurbished, so you may even find equipment that can be driven away the same day. If you don’t have time to waste, used equipment can get you back to work quickly.
④. Tax Benefits: Used equipment also qualifies for the federal tax deductions we mentioned earlier, allowing you to further reduce your total costs.
These convenient advantages also come with some disadvantages:
①. Shorter equipment life: The remaining life of equipment depends on many factors, but used equipment is generally not as good as new or refurbished equipment.
②. Unclear history: Not everyone takes good care of their equipment or keeps good records. Used equipment is not spotless, so its background may be questionable. If it has not yet been fully and professionally inspected, an inspection can help alleviate doubts.
③. More repairs and maintenance: Used equipment that has been in use for a long time may require more frequent repairs or more rigorous maintenance. These needs can increase costs and interrupt your work. Older, older models are generally more prone to failure. Businesses with a tight schedule may face huge costs due to unexpected downtime.
Which replacement option is right for you?
Choosing how to replace equipment can be a complex decision. Take some time to evaluate the following aspects to determine which equipment you need to replace.
- Budget
Budget may be the biggest factor affecting your equipment replacement. If your budget is limited, you may need to choose used equipment or refurbished equipment. If you have more upfront money or can work out a financing plan, new equipment has many advantages. If you run a small or medium-sized business, remember to factor in those tax deductions. - Maintenance and Service Plans
Your maintenance and service preferences may help you make your decision. While you can’t avoid scheduled maintenance, new and refurbished products can help you avoid unpredictable expenses like repairs. After purchasing new equipment, you can also choose a CVA to more accurately predict maintenance and service expenses. Staying on top of maintenance requires attention to detail and careful record keeping, and a CVA can help streamline those needs. - Required Features and Performance
Does your old equipment meet all of your needs? If your old equipment is a good fit for your operation, refurbishing may be a good option. If you think you may need something new, such as modern technology or a larger equipment size, buying new and used equipment will help you upgrade. Some technology can be added during a refurbishment, though, so talk to a technician first. - Downtime Tolerance
Consider how much downtime your workflow can withstand. If you don’t need to replace your equipment right away—like if you have other equipment that can pick up the slack, or you’re using it for an indefinite job—you can choose from any of the equipment options we’ve discussed. However, those who are pressed for time may need to choose an existing piece of equipment or rent it in the meantime. - Condition of the Equipment Being Replaced
Before you give up your old equipment, have a professional inspect it. A refurbished machine doesn’t need to be in great shape. If the frame is in good condition, it’s likely a good candidate for a refurbishment, which can save you a lot of money. - When to Replace vs. When to Repair Equipment
Repairs can quickly fix individual problems, but they don’t extend the life of your equipment. Once your machine has worn out, a repair may be just one of many. At some point, it will cost more to continue repairing your equipment than to replace it. To find that tipping point, consider the current value of the equipment, its age, and the associated repair costs.
Find Your Next Replacement at Hyunkook Machinery
Whatever option you choose, the experts at Hyunkook Machinery can make it happen. Our trained technicians are ready to perform refurbishments and repairs, and our experienced representatives can help you find the right new or used machine for your needs.