75% of construction dealers expect higher new equipment prices in Q4

Construction equipment dealers are anticipating price hikes on new machines in the fourth quarter as OEM incentive programs scale back, but the impact could be minimal. 

Roughly 75% expect increased prices in the fourth quarter, according to heavy-equipment research firm IronAdvisor Insights.  

That’s after a Q3 in which 55% of construction dealers reported decreased orders year over year, and roughly 25% said orders stayed the same. Further, 100% of dealers reported increased or steady new equipment demand in Q3. 

Higher new equipment prices and lower orders reflect a shift in the market, with OEMs no longer sacrificing margins in favor of sales volume, IronAdvisor Director of Research Jarrett Harris said in a company video.  

“It has been a full year since we first reported OEMs stepping in the market with aggressive incentives,” he said. “It’s safe to say that the magnitude and duration of those programs far exceeded what anyone expected, but they were successful at moving units at the expense of margin.” 

Too soon to scale back? 

Many dealers are seeing pullback in incentives amid growing expectations that construction OEMs can no longer absorb tariff-related expenses, Harris said. 

Despite strong demand for construction equipment, the pullback could be premature since contractor profit margins have not kept up with equipment prices, according to the IronAdvisor report. 

“If you were to graph out the past several years of what this stuff is selling for, we’re 30% north of where we were,” a John Deere dealer stated in the report. “And the price of moving dirt or laying asphalt or concrete isn’t up that much.” 

Nonetheless, more than 60% of construction dealers project new equipment sales to increase in 2025, and nearly 20% expect them to stay the same compared with 2024. 

The construction equipment market has been buoyed by large commercial developments, with infrastructure starts projected to jump 10% in 2025 to $360 billion, according to construction data and solutions provider Dodge Construction Network. Nonresidential construction starts are projected to rise 7% YoY to $478 billion, according to Dodge.  

Fading incentives a boon for lenders 

The extent and impact of OEM incentive pullback remain to be seen, but some construction lenders are poised for an uptick in financing opportunities after being unable to compete with 0% APR and other programs. 

While construction lenders pursue other financing opportunities, they are also prepared to capitalize once aggressive incentives fade, knowing that they “won’t be here forever,” John Gougeon, president of Ann Arbor, Mich.-based UniFi Equipment Finance, told Equipment Finance News. 

“Ninety days from now, we’ll still be here,” he said. “We need to look at other opportunities or other avenues while that’s happening, and then when the time is right, they’ll come back to us, because no one is offering 0% forever. It just never works.” 

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