Used equipment financing gains momentum as dealers chase margins

Used equipment financing is becoming a larger focus for equipment dealers and lenders as tariffs, inventory costs and shifting buyer behavior pressure margins on new equipment.

Dealers are increasingly seeking financing solutions tied to used equipment and trade-ins, Heidi Brooks, U.S. sales manager for commercial finance at DLL, said May 18 during a panel at Equipment Finance Connect in Houston. 

“Dealers are talking a lot about the margin being in that used equipment,” Brooks said. Tariff-related costs on new equipment are pushing dealers to rely more on used inventory for profitability, she said. 

Skip Owen, director of sales at Hills Machinery, agreed during the panel discussion. 

“Used equipment is critical for us to get a margin blend,” he said. “Typically, we can make a little bit more on our used equipment.” 

Dealers tighten inventory management 

This shift comes as dealers move away from the post-pandemic inventory cycle, during which supply shortages encouraged dealerships to stock more equipment, D.J. Jackson, senior director of business development at Oakmont Capital Services, said on the panel.

Dealers are “constantly fine-tuning” inventory and rental fleets to match customer demand and avoid aging equipment sitting on lots, Jackson said. 

“We’re seeing so much used equipment come around that may be a backup or a very niche machine that … only gets used a couple of times a month” he said. “We’re excited about seeing the planning that’s going into the inventory levels.” 

Market conditions are reinforcing that strategy. Used heavy-duty truck inventories dropped 20.3% YoY as fleets age and replacement purchases are being delayed, according to Sandhills Global market reports released May 7.

Inventory levels for used heavy-duty construction equipment fell 11.1% year over year in April, while used medium-duty construction equipment inventories declined 16.2%, according to the release. 

Leasing strategies expand 

As with the automotive industry, leasing in used equipment is becoming part of the strategy as customers prioritize affordability and predictable payments. 

Premier Equipment Solutions is offering more used equipment with lease-payment options and bundled service support rather than focusing solely on purchase prices, Chief Executive Andy Suhy said during a May 19 fireside chat at the event. 

“We want to lease all used equipment right now,” he said. “We’re doing extended warranties, we’re underwriting some of that ourselves and we’re putting in at least a [preventative maintenance] program so nothing goes out naked.” 

For lenders, leasing provides assurances about the condition of the equipment, Kirk Mann, executive vice president and general manager of transportation finance at Mitsubishi HC Capital America, said during a second fireside chat. 

“In those environments where we can structure essentially safety in terms of operating, that we know that the equipment is being operated correctly and maintain correctly, those are great environments,” he said. “It does give you perhaps the ability to lend a little more on an LTV basis than what you would do if you’re just pushing something out the door.” 

Read more from Equipment Finance Connect 2026 at equipmentfinancenews.com.