Used equipment market may be stabilizing
Webinar: Experts weigh in on strategies for success in current market
Used-equipment dealers and lenders are reassessing their strategies in light of ongoing industry challenges.
High interest rates, rental returns, inflation and delayed production of new equipment post-pandemic have contributed to steady depreciation in recent years and a surge in used inventory. However, corrected supply chains and increased lender confidence hint that the market is stabilizing.
Adding assets into the market could lead to more stability in the used-equipment sector, Joe Lundvick, senior vice president and head of asset management at Mitsubishi HC Capital America, said during today’s Equipment Finance News webinar, “Used equipment financing in 2025 as markets normalize.”
“More new-equipment buyers means that sooner or later they become used-equipment buyers, quite often, from our view,” he said. “A guy gets a new piece of equipment that he didn’t realize he could afford — or for whatever reason — and suddenly wants two or three more.”
Lenders can succeed against industry headwinds by staying on top of past-due payments, Donna Yanuzzi, executive vice president of 1st Equipment Finance, said during the webinar.
“Keep your eye on your delinquency so you’re around to do the new originations. Because I always say, the production this way up will keep you in business and low delinquency will keep you in business,” she said. “But either one of those will shut you down, so keep your eye on and manage your delinquency even more so before you’re adding more and more transactions.”
Meanwhile, dealers with high inventories should stay the course, given that brighter days are ahead — and possibly even a sales surge following the Nov. 5 presidential election, Justin Jones, corporate sales manager at Nashville, Tenn.-based Diamond Equipment, said during the webinar.
“We kind of look at the overall activity in construction and in the market, and to be honest with you … we haven’t seen a lot of slowdown in work,” he said. “If there’s not a lot of slowdown in work, that means people still have to buy. … They’ve held off for so long, and after this election is over and there’s no more excuses, they’re still going to buy.”
Incentives hurt used market
More manufacturers are offering 0% financing for new equipment to address customer concerns about high interest rates. However, that push to sell new machines is adversely affecting the used-equipment sector, Jones said.
“With these manufacturers coming out with 0% financing for extended terms, it makes it pretty tough to get rid of used stuff whenever used is inflated, and new is not much more [expensive] than a used one,” he said.
While the Federal Reserve’s federal funds rate cut last month could boost retail sales of used equipment, dealers may want to steer clear of auction and wholesale platforms because prices are so low, Jones said.
A wave of bank repossessions is also contributing to high used inventory in trucking and construction sectors, Lundvick said. For trucks, Mitsubishi HC Capital America typically starts “trudging through an asset within 60 to 75 days from the minute it gets repossessed to the day we sell it,” he said.
