Used construction equipment values continued to fall in November despite some market improvements.
Wheel loader and wheel skid steer categories contributed to spiked inventory levels on a year-over-year basis. However, heavy- and medium-duty inventory declined month over month for a second straight month, partly because dealers are capitalizing on strong rental demand, Sandhills Global Equipment Lease and Finance Manager Jim Ryan told Equipment Finance News.
“It is interesting that you’re even seeing some dealers who never play in the rental game creating a rental division or finding a way to shift [used equipment] to some profit on the rental side,” he said.
Converting rentals into sales will be key for dealers moving forward, with rental returns still contributing to increased inventory some months, Ryan said.
Depreciation of used construction equipment was most apparent in the auction market in November, according to Sandhills Global’s monthly report on heavy-equipment trends, released Dec. 6.
Medium-duty equipment
- Used inventory rose 19.2% YoY, but fell 1.1% MoM;
- The wheel skid steer category saw the highest inventory jump, rising 29.2% YoY; and
- Auction values dropped 7.7% YoY, while asking values declined 6% YoY.
Heavy-duty equipment
- Used inventory rose 16.8% YoY, but fell 1.1% MoM;
- Used wheel loaders drove the inventory surge, rising 32% YoY; and
- Auction and asking values declined 9.4% YoY and 6.5% YoY, respectively.
Used lifts
- Inventory increased 19.6% YoY and 3.6% MoM; and
- Auction values fell 13.9% YoY, while asking values dropped 11.2% YoY.
Dealers get creative with lending partners
As high inventory challenges persist, some dealers have been working with their lending partners to form incentive packages and other discounts for used-equipment deals while catering to higher-risk borrowers, Kevin O’Connor, sales director at Northbrook, Ill.-based Beacon Funding, told EFN.
Dealers are getting “more creative with their financing product and who they are willing to kind of send transactions to, just so they can move metal a little bit more rapidly,” he said. “So, they might have found additional solutions for the ‘B’ credit profiles, some of the ‘C’ credit profiles or some of the new business profiles that they otherwise wouldn’t have.”
Independents lenders fill void in used-equipment market
Independent lenders, meanwhile, are strengthening relationships with dealers to take advantage of increased opportunities in the used-equipment space, Mark French, president at Atlanta-based Crest Capital, told EFN.
“Banks often steer clear of these used-equipment deals, creating opportunities for independent lenders who maintain close ties with dealers, especially those handling trade-ins,” he said. “Our agility and deep understanding of equipment values and lifecycles let us structure and price financing more effectively, ensuring customers get the support they need while dealers move their used inventory efficiently.”
The third annual Equipment Finance Connect at the JW Marriott Nashville in Nashville, Tenn., on May 14-15, 2025, is the only event that brings together equipment dealers and lenders to share insights, attend discussions on crucial industry topics and network with peers. Learn more about the event and register here.
