What are Common Points in Heavy Equipment Appraisals?
Understanding The Process
Appraisals are a great way for any business owner or equipment owner to learn more about their financial state by understanding the value of their equipment. If you are new to appraisals, an appraisal is the act of evaluating a specific asset such as a piece of heavy equipment in order to better understand how much that specific asset is worth. An appraisal is performed by a certified individual who has been trained how to evaluate an asset based on various factors in order to put a numerical value on a piece of equipment. Each appraisal is 100% unique, and because of that, there is no concrete formula or checklist for an appraiser to work off of, however, there are common points within heavy equipment appraisals that an appraiser will look at that contribute to the finished appraisal value of your piece of heavy equipment. So what are the common points in a heavy equipment appraisal?
Equipment Market
One of the most important things that an appraiser will take time to evaluate in the appraisal of your piece of equipment is the equipment market. The market is always changing when it comes to equipment sales, sometimes it’s a buyer’s market and sometimes it’s a seller’s market. Because the demand for heavy equipment changes, so does the actual value of your piece of equipment. This is the case in relatively every market, take the housing market for example – when the economy is good, the housing market rises and so do the price of homes! The same thing happens when it comes to buying equipment.
Equipment Age
The next thing and common point when it comes to your heavy equipment appraisal is your equipment age. The age of your equipment will always be taken into consideration while making an appraisal. In most cases, the older the piece of equipment, the less value it will hold – but that being said, if you put two pieces of the same equipment next to each other and one is ten years newer, that does not always mean that the newer piece of equipment will hold more value. It’s possible that the newer piece of equipment has many more work hours on it, has never had maintenance performed on it, or some other factor has deemed it to hold less value than the older, better kept piece of equipment.
Equipment Hours
Another factor that plays a part in the value of your equipment is how many work hours the piece of machinery has on it. Equipment hours are fairly comparable in understanding to the number of miles that a vehicle has. As you know, your vehicle records how many miles you drive with it which helps you know when it’s time to perform routine maintenance and also shows how much use the vehicle has had. In a similar fashion, equipment records hours which plays a role in the value of your piece of equipment.
Maintenance Records
Maintenance Records also are taken into consideration when it comes to the value of your piece of equipment. Just like any other material item, when a piece of equipment is well maintained and taken care of, it lasts much longer and also holds more value which needs to be taken into consideration by your appraisal.
Although each heavy equipment appraisal is unique, we hope that you have found it helpful to look at the various common points that each equipment appraisal has. If you are looking to have an equipment appraisal performed, please contact us today! Our team travels all throughout the united states in order to perform equipment appraisals and we would love to help you!
