Bobcat, Takeuchi dealers capitalize on rate buydowns, extended warranties

Construction equipment dealers are taking advantage of interest-rate buydowns, extended warranties and other OEM incentives to boost sales and right-size fleets. 

Bobcat dealers, specifically, are using promotional financing to move new equipment at a time of stubbornly high interest rates, Kris Realander, sales manager at Morrisville, N.C.-based Triangle Equipment Group, told Equipment Finance News. 

“Your standard interest rate is anywhere from 5% to 8%” he said. “So, the manufacturers are buying those down to give you the 0% for 48 or 60 months, and on your average unit, that’s a lot of money. It’s like $12,000, $16,000 to buy those down. Manufacturers are definitely playing a big role in that right now to try to incentivize people to purchase.” 

Buydowns and other OEM incentives contributed to a 5.5% year-over-year increase in new construction equipment sales in the first quarter, according to IronAdvisor Insights. 

While the buydowns have been effective, Triangle would like to see more rebates because they also lure buyers, and they would help separate construction OEMs from the pack, Realander said. 

“The way the lenders are looking at it is, ‘Well, we’re buying you down to 0%,’ so you’re feeling like there’s not much left to do,” he said.

“Zero percent for 60 months in the equipment world, on the compact side, is pretty standard right now. And if you don’t have it, you’re not really getting a look.” 

— Kris Realander, sales manager, Triangle Equipment Group

Warranties extended for equipment, tech 

Meanwhile, Japanese equipment manufacturer Takeuchi is offering warranties that its dealer partners “haven’t seen before,” Matthew Isgrig, a sales representative at Landmark Equipment in Fort Worth, Texas, told EFN. 

“They’ve never had a three-year, 3,000-hour warranty ever, and I’ve been selling them a long time,” he said. “And they just started kicking that out. It used to be two-year, 2,000 hours and then two years free on the GPS.” 

With equipment becoming more tech-driven, OEMs are offering extended warranties for the associated software and hardware systems as well, Isgrig said. 

“They’re giving five years on their telematics GPS systems, which are usually about $400, $450 a year,” he said. “You’re now getting three additional years. It’s roughly $1,500, and it’s a great feature.” 

Construction telematics systems allow operators to remotely track, monitor and optimize equipment using technology. Construction dealers are seeing increased demand for telematics, Isgrig said. 

“The owner of a company, the foreman, the service manager or whatever the case, if he’s on the master file and wants to get on there and look at his machines, he can pull data for basically anything,” he said. 

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